THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 

bift  of 

benofcr-lYiuss  Co. 


A  TREATISE 


ON    THE 


INCORPORATION  AND  ORGANIZATION 
OF   CORPORATIONS 


A  TREATISE 


OX    THE 


INCORPORATION  AND  ORGANIZATION 

OF 

CORPORATIONS 

CREATED  UNDER  THE  "BUSINESS  CORPORATION  ACTS" 
OF  THE  SEVERAL  STATES  AND  TERRITORIES 
OF  THE  UNITED  STATES 

Including  therein-  a  Synopsis-Digest  of  the  General   Incorporation   Acts 

oe  the  Several  Commonwealths,  with  Decisions  bearing  thereon; 

also,  Forms  for  Drawing  Charters  under  the  Laws  of  the 

several     States     and    Territories  ;    Amendments    to 

Charters  and  Dissolution  of  Corporations  ; 

General  and  Specific  Object  Clauses 

FOR    INSERTION    IN    CHARTERS,    By- 

Laws,  Minutes,  etc.,  etc. 
BY 

THOMAS   GOLD   FROST,  LL.D.,  Ph.D. 
in 

OF  THE  NEW  YORK  BAR 

Author  of  "Treatise  on  Guaranty  Insurance,"  "The  French  Constitution 
of  1793,"  "Federal  Corporation  Tax  Law,"  etc. 


FOURTH   EDITION 

ENLARGED,  AND  REVISED  TO  JANUARY  1,  1913 


BOSTON 

LITTLE,   BROWN,  AND   COMPANY 

1913 


Copyright,  1905, 1906,  1908, 1913, 
By  Little,  Brown,  and  Company^ 


AU  rights  reserved. 


If  3 


THE    UNIVERSITY    PRESS,    CAMBRIDGE,    U.S.A. 


* 


li  TO 

JOHN    B.    BROWN,  Esq. 

OF    THE    ILLINOI8    BAB 

THIS   WORK    IS    DEDICATED    BY    HIS    FRIEND,   COLLEGE    CLASSMATE 

AND    FIRST    LAW    PARTNER 

THE  AUTHOR 


PREFACE   TO   THE   FOURTH   EDITION. 

In  offering  the  Fourth  Revision  of  this  work,  the  author  wishes 
to  express  his  appreciation  of  the  kindly  reception  which  has 
been  extended  to  the  work  by  the  legal  profession  of  this  country. 
The  task  of  keeping  up  to  date  a  complete  text  book  on  the  Incor- 
poration and  Organization  of  Corporations  has  not  been  an  easy 
one.  The  increase  in  the  size  of  the  present  volume  over  that  of 
the  earlier  editions  finds  its  explanation  in  the  following  state- 
ment. A  very  considerable  addition  has  been  made  to  the  Synopsis 
Digest  of  the  Incorporation  Acts  of  the  Several  States  with  a  view 
to  not  only  revising  them  up  to  July  1st,  1912,  but  at  the  same 
time  enlarging  the  Synopsis  Digest  itself.  A  number  of  addi- 
tional miscellaneous  forms  have  been  added,  which  it  is  believed 
will  add  materially  to  the  usefulness  of  the  work. 

THE   AUTHOR. 

220  Broadway, 
New  York  City,  January  16th,  1913. 


670692 


PREFACE 

The  present  work  might  with  no  inconsiderable  degree  of  fitness 
have  been  entitled  "  A  Treatise  on  Comparative  Incorporation 
Law  in  the  Several  Commonwealths  of  the  United  States."  Such 
a  work  if  properly  prepared  should  not  fail  to  interest  the  active 
practitioner  as  well  as  the  public  at  large.  One  of  the  greatest 
difficulties  met  with  in  the  preparation  of  the  volume  here  pre- 
sented, has  been  to  successfully  condense  the  subject  matter  thereof 
without  eliminating  any  matters  of  real  importance.  If,  in  place 
of  the  customary  copious  references  so  freely  offered  in  support 
of  principles  of  corporation  law  universally  considered  to  be 
sound,  the  reader  finds  only  a  single  citation,  he  may  rest  assured 
that  careful  investigation  has  satisfied  the  author  that  it  repre- 
sents the  prevailing  doctrine  relative  to  the  particular  proposition 
in  support  of  which  it  has  been  cited.  This  method,  it  is  believed, 
will  meet  with  favor  at  the  hands  of  the  profession  for  the  follow- 
ing reasons : 

The  vast  majority  of  the  decisions  of  the  courts  of  this  country 
rendered  prior  to  1870,  in  so  far  as  they  relate  to  questions  of 
corporation  law,  are  for  the  most  part  a  veritable  legal  "junk- 
shop"  representing  either  what  is  now  "horn-book  law,"  or  else 
overruled  cases.  Many  of  these  contain  enunciation  of  principles 
of  corporation  law  the  soundness  of  which  no  one  in  these  days 
would  venture  to  dispute,  or  else  they  represent  propositions  of 
Law  which  are  no  longer  regarded  as  sound.  The  corporation 
law  of  to-day,  by  engrafting  into  its  subject  matter  accepted  prin- 
ciples of  agency  and  estoppel,  has  assumed  a  form  which  tin- 
corporation  lawyer  of  fifty  years  ago  would  find  great  difficulty  in 
recognizing. 

ix 


X  PKEFACE. 

In  the  preparation  of  this  work  utility  and  accuracy  have  been 
kept  constantly  in  mind.  The  writer  has  made  free  use  of  certain 
exceptional  facilities  that  have  been  open  to  him  through  his 
professional  connections,  including  access  to  a  large  number  of 
forms  as  well  as  a  great  deal  of  correspondence  with  state  officials 
in  the  various  commonwealths.  The  forms  for  drawing  charters 
in  the  various  states,  while  prepared  by  the  author,  have  also 
been  approved  in  every  instance  by  competent  attorneys  who 
reside  in  the  state  under  the  laws  of  which  the  draft  of  the 
charter  was  made. 

All  of  this  has  been,  it  is  hoped,  to  the  advantage  of  the  pro- 
fession and  the  public  at  large. 

THOMAS   GOLD   FROST 

76  William  Street,  New  York  Citt,  N.  Y. 
December  1,  1904. 


TABLE  OF  CONTEXTS. 


Introduction 


PART   I. 

INCORPORATION    AND    ORGANIZATION    OF 
CORPORATIONS. 

CHAPTER   I 

DRAFTING    THE    CHARTER. 

Page 

§     1.     General  Remarks  on  Corporate  Charters 9 

§     2.     Incorporators 12 

§     3.     Corporate  Name ]  } 

§     4.     Corporate  Purposes 15 

§     5.     Number  of  Corporate  Purposes  permitted .  19 

§     G.     Collateral  Attack  upon  Corporate  Purposes  and  Powers      ...  21 

§     7.     Effect  of  Inserting  Illegal  Purposes 28 

§     8.     Corporate  Powers,  Classification  of 29 

§     9.     Common  Law  Powers,  Definition  of ;  Enumeration  of   ...     .  30 

§  10.     Right  to  a  Corporate  Name ;;i 

§  1 1.     Right  of  Perpetual  Succession 31 

§  12.     Right  to  adopt  and  use  a  Corporate  Seal 32 

§  13.     Power  to  acquire,  hold,  and  dispose  of  Real  and  Personal  Property  32 

§  14.     Power  to  appoint  Corporate  Officers  and  Agents        :;:; 

§  15.     Power  to  establish  By-Laws        3;j 

§  16.     Power  to  sue  and  be  sued ;;i 

§  17.     Express  Powers,  Definition  of ;  Enumeration  of :;i 

§   18.     Power  of  Corporations  to  purchase  their  own  Stock       ....  30 
§  19.     Power  to  subscribe  for,  purchase,  and  hold  Stock  in  other  Cor- 
porations        ,-57 

§  20.     Power  to  consolidate  with  other  Corporations 38 

§  21.    Power  to  transact  all  or  any  Part  of  the  Corporate  Business  out- 
side of  the  State  of  its  Domicile 38 

§  22.     Power  toperform  Constituent  Actsoutsideof  the  Domiciliary  State  40 

§  23.     Power  to  extend  Corporate  Existence 10 

§  21.     Power  to  change  the  Corporate  Name 11 

§  25.    Power  to  increase  or  decrease  Capital  Stock 11 

§  26.     Power  to  issue  Preferred  Stock 41 

xi 


Xii  TABLE    OF    CONTENTS. 

Page 

§  27.     Power  to  change  the  Corporate  Purposes 46 

§  28.     Power  to  change  Number  of  Directors 46 

§  29.     Power  to  change  the  Corporate  Domicile  and  Principal  Place  of 

Business 47 

§  30.     Power  to  acquire  and  enforce  a  Lien  upon  Stock  to  secure  the 

Payment  of  Debts  Due  the  Corporation 47 

§  31.     Power  to  levy  Assessments  against   the   Stockholders  with  the 

Right  to  forfeit  their  Stock  for  Non-payment  thereof       ...  48 

§  32.     Power  to  authorize  Voting  by  Proxy  at  Stockholders'  Meetings  49 

§  33.  Power  to  permit  Cumulative  Voting  in  the  Election  of  Directors  49 
§  34.     Power  to  issue   Stock  as  full  paid  in  Exchange  for  Property  or 

Services 49 

§  35.  Power  to  dispose  of  Corporate  Assets  as  an  Entirety  ....  51 
§  36.     Power  to  voluntarily  dissolve  the  Corporation  without  Recourse 

to  the  Courts 52 

§  37.     Power  to  insert  in  the  Charter  Provisions  for  the  Regulation  of 

the  Internal  Affairs  of  the  Corporation 53 

§  38.     Power  to  authorize  Directors  to  adopt  By-Laws 55 

§  39.     Power  to  authorize  Appointment  of  Executive  Committee  from 

the  Board  of  Directors 56 

§  40.     Power  to  enlarge  or  diminish  Corporate  Powers 56 

§  41.     Power  to  change  Par  Value  of  Shares 57 

§  42.     Power  of  Bondholders  to  vote  at  Election  of  Directors   ....  57 

§  43.     Power  to  classify  Directors 57 

§  44.     Power  to  amend  Articles  before  Organization 58 

§  45.     Power  to  surrender  Charter  before  Organization 58 

§  46.     Power  given  to  Minority  Stockholders  to  compel  Purchase  of  their 

Holdings  upon  Consolidation 58 

§  47.     Incidental  Powers,  Definition  and  Enumeration  of 59 

§  48.     Power  to  make  Contracts 60 

§  49.     Power  to  borrow  Money 60 

§  50.     Power  to  give  and  accept  Customary  Evidences  of  Debt     ...  60 

§  51.     Power  to  mortgage  and  pledge  Real  and  Personal  Property     .     .  60 

§  52.     Power  of  Amotion 60 

§53.     The  Modern  Doctrine  of  Ultra  Vires 61 

§  54.     Corporate  Domicile 65 

§  55.     Board  of  Management 67 

§  56.     Capital  Stock 67 

§  57.     Limitations  upon  Amount  of  Capital  Stock 69 

§  58.     Par  Value  of  Capital  Stock 70 

§  59.     Amount  of  Stock  Subscriptions 70 

§  60.     Amount  of  Stock  paid  in 72 

§  61.     Amount  of  Stock  with  which  a  Corporation  may  begin  Business  73 

§  62.     Duration  of  Corporate  Existence 73 

§  63.     Date  of  Annual  Meeting 74 

§  64.     Limitation  upon  Corporate  Indebtedness 74 

§  65.     Exemption  of  Stockholders  from  Personal  Liability       ....  75 

§  66.     Adoption  of  By-Laws  by  Directors 75 

§  67.  Provisions  for  the  Regulation  of  the  Internal  Affairs  of  the  Cor- 
poration         76 


TABLE    OF    CONTENTS.  X1U 

Page 
§  68.     Miscellaneous  Provisions   relative  to  Contents  of  Articles  of  In- 
corporation        76 

5  69.     Construction  of  Charter ....       77 


CHAPTER   II. 

PROCURING    THE    CHARTER. 

Signing  the  Articles 79 

Acknowledgment  of  Execution  of  Articles 79 

Publication  of  Articles 80 

Affidavit  as  to  Stock  Subscriptions 81 

Anti-Trust  Affidavit 81 

Special  Requirements  in  Particular  States    .     . 81 

Powers   of    State    Officials   relative    to    accepting    or   rejecting 

Articles        , 82 

Right  to  Mandamus  State  Officials  for  refusing  to  file  Articles     .  84 

Organization  Tax 84 

Form  in  which  Charter  is  granted 8G 

Filing  and  recording  in  Local  County  Offices 86 

Distinction  between  de  jure  and  de  facto  Corporations    ....  87 
Right   of  Parties  other  than  the  State  to  collaterally  impeach 

Corporate  Existence        88 

Right  of   State  to  attack  Corporate  Existence  in   Direct   Pro- 
ceedings        90 

When  does  Corporate  Existence  commence  ? 92 


CHAPTER   III. 

ORGANIZATION    OF    CORPORATIONS    AFTER    INCORPORATION. 

The  Incorporators'  Organization  Meeting 95 

Organization  Meeting,  how  called 96 

Organization  Meeting,  where  held 96 

Steps  Necessary  to  complete  Organization 98 

Adoption  of  By-Laws 99 

Election  of  Directors lt>0 

Power  to  hold  Meetings  for  the  Election  of  Directors  without 

the  Domiciliary  State 104 

Voting  by  Proxy 104 

First  Directors'  Meeting        105 

Election  of  Corporate  Officers 107 

Appointment  of  Executive  Committee l'»7 

Stock  Assessments        . 108 

Certificates  required  to  be  made  by  Officers  or  Directors  after 

Organization 109 

Time  in  which  Corporation  must  organize  and  commence  Business  1<»9 

Stock  Certificates 11,J 


§ 

70. 

§ 

71. 

§ 

72. 

§ 

73. 

§ 

74. 

§ 

75. 

§ 

76. 

§ 

77. 

§ 

78. 

§ 

79. 

§ 

80. 

§ 

81. 

§ 

82. 

§ 

83. 

§ 

84. 

5 

85. 

§ 

86. 

§ 

87. 

§ 

88. 

§ 

89. 

§ 

90. 

§ 

91. 

§ 

92. 

§ 

93. 

§ 

94. 

§ 

95. 

§ 

96. 

§ 

97. 

§ 

98. 

i 

99. 

XIV  TABLE    OF    CONTENTS. 

CHAPTER   IV. 

ISSUANCE   AND   PAYMENT    OF    CAPITAL    STOCK. 

Page 

§   100.     General  Remarks  as  to  the  Issuance  and   Payment  of  Capital 

Stock  upon  the  Organization  of  a  Corporation 112 

§  101.     Manner  of  Payment  of  Capital  Stock 113 

§  102.     Payment  of  Capital  Stock  in  Services 120 

§  103.     Payment  of  Capital  Stock  in  Property 120 

§  104.     Statement  of  True  Value  Rule 122 

§  105      Statement  of  Good  Faith  Rule 123 

§  106.     Statement  of  "  Speculative  Value  Rule  " 0  125 

§  107.     Eifect  of   Appraisal  of  Property  by  Directors  under  Statutory 

Authority,  when  taken  in  Exchange  for  Stock    .....  137 
§   108.     Effect  of  Appraisal  of  Value  of  Property  by  State  Officials  when 
the  same  is   taken  by  Corporations  in  Exchange  for  their 

Capital  Stock 139 

§  109.     Meaning  of  Non-Assessable  Stock 141 

§  110.     Meaning  of  Full- Paid  Stock 142 

CHAPTER  V. 

LEGISLATIVE    CONTROL    OVER    DOMESTIC    CORPORATIONS. 

§  111.     Statement  of  Principal  Methods  by  which  Legislative  Control 

over  Domestic  Corporations  is  obtained 145 

§   112.     Amendment  of  Charters 145 

§  113.     Reserved  Right  of  the  State  to  repeal  Charters        153 

§  114.     Legislative  Control  over  Dissolution  of  Corporations    ....  154 

§  115.     Forfeiture  of  Charters 157 

§116.     The  Police  Power  of  the  State 160 

§  117.     Legislative  Investigation  into  Corporate  Affairs 164 

§  118.     Legislative  Requirement  of  Annual  Reports  from  Corporations  164 

§  119.     Inspection  of  Corporate  Books 165 

§  120.     Anti-Trust  Legislation 167 

§  121.     Regulation  of  Internal  Affairs 16S 

§  122.     Liability  of  Stockholders  for  Debts  of  the  Corporation      .     .     .  169 

§  123.     Statutory  Liability  of  Directors 174 

§  124.     Extension  of  Corporate  Existence 176 

§  125.     Taxation  of  Domestic  Corporations 177 

§  126.     Regulation  of  the  Right  of  the  Consolidation 178 

CHAPTER    VI. 

LEGISLATIVE    CONTROL   OVER   FOREIGN    CORPORATIONS. 

§  127.     Extent  of  Legislative  Power  of  the  various   Commonwealths 

over  Foreign  Corporations 180 

§  128.     Doctrine  of  State  Comity 1S4 

§  129.     What  constitutes  doing  Business  on  the  Part  of  a  Foreign  Cor- 
poration within  the  State 190 


TABLE   OF   CONTENTS.  XV 

Page 

§  130.     Penalty  for  transacting   Business  in  a  Foreign   State  without 

obtaining  a  Permit 195 

§  131.     License  Tax  on  Foreign  Corporations 198 

§  132.     Annual  License  Tax  on  Foreign  Corporations 199 

§  133.  To  what  Extent  is  the  Taxing  Power  of  the  State  with  reference 
to  Domestic  and  Foreign  Corporations  engaged  in  Interstate 
Commerce  limited  by  the  "  Commerce  Clause  "  of  the  Federal 
Constitution  ? 202 

PART  II. 

SYNOPSIS-DIGEST  OF  THE  INCORPORATION  ACTS 
OF  THE  SEVERAL  STATES  AND  TERRITORIES 
OF  THE   UNITED   STATES 211-612 

PART    III. 

FORMS   AND   PRECEDENTS. 

Specific  Object  Clauses 613-652 

General  Object  Clauses 653-654 

Clauses  regulating  Business 654-661 

Preferred  Stock  Clauses 661-662 

Forms  for  Drawing  Charters  in  all  the  States  and  Territories     .    .    .     663-744 
Foreign  Corporations 

Forms  for  procuring  Permits  to  Transact  Business  as  a  Foreign 

Corporation  in  the  Several  States  and  Territories 745-801 

Forms  for  Drafting  Amendments  to  Charters 802-810 

Dissolution  of  Corporations 811-813 

Composite  Form  of  Minutes      813-817 

Waiver  of  Notice  of  First  Meeting  of  Incorporators 816 

Proxy,  Meeting  of  Incorporators  and  Stockholders 816-817 

Transfer  of  Subscription 817 

Inspectors'  Oath  and  Certificate 817 

Minutes  of  Organization  Meeting  of  Directors 818-822 

Secretary's  Oath 8?2 

Waiver  of  Notice  of  First  Meeting  of  Directors 822 

Composite  Form  of  By-Laws 822-828 

By-Laws  of  United  States  Steel  Corporation      828-835 

Miscellaneous  Forms  and  Precedents 835-878 

Suggestions  relative  to   Drafting  of  Charters   and    Preparation   of 

Minutes  for  the  Organization  Meeting  of  Corporal  ions    ....     878-881 

Table  of  Organization  Tax  for  all  the  States  arul  Territories       883 

Table  of  Annual  Franchise  Tax  upon  Domestic  Corporations 884 

Table  of  Taxes  imposed  upon  Foreign  Corporations 885  SS(» 

General  Index 889-911 

Index  to  Synopsis-Digest  of  the  INCORPORATION   A.CTS  of  THE 

Several  States  and  Territories 

Index  to  Forms  and  Precedents •"•'  ■,-tl 


A  TREATISE 


ON   THE 


INCORPORATION   AND   ORGANIZATION 
OF   CORPORATIONS. 


INTRODUCTION. 

The  development  of  the  modern  business  corporation  act  has 
been  most  curious  and  interesting.     Previous  to  the  year  1837 
charters  could  be  procured  only  by  special  act  of  the  legislature. 
In  that  year  the  legislature  of  Connecticut  passed  the   first  busi- 
ness  corporation    act   that   went  into     force    and   effect  in   the 
United  States.     It   was  drawn  by  Theodore  Hinsdale,  of  Win- 
chester, Connecticut,  a  Yale  graduate  of  the  class  of  1821.     As 
this  act  forms  the  basic  work  of  most  of  the  business  corporation 
acts  of  to-day,  it  deserves  more  than  passing  notice.     It  was  drafted 
for  the  purpose  of  permitting  incorporation  thereunder  of  com- 
panies  for  the  purpose  of  carrying  on  a  manufacturing,  mechan- 
ical, mining,  and  quarrying  business.      The  statutory  powers  of 
corporations  incorporated  thereunder  were  enumerated  as  follows : 
To  sue  and  be  sued,  to  have  a  common  seal,  to  elect  officers,  to 
fix  their  compensation  and  duties,  to  establish  by-laws,  to  em- 
ploy agents,  mechanics,  and  laborers.     Incorporation  was  limited 
to  one  purpose,  to  be  distinctly  and  definitely  set  forth  in  the  art- 
icles of  agreement  which  were  required  to  be  signed  by  all  the 
incorporators.     A  board   of  directors   was  provided  for;    also  a 
president,  secretary,  and  treasurer.     Power  was  given  to  the  cor- 
poration to  forfeit  stock  of  stockholders  for  non-payment  of  stock 
subscriptions.     The  corporation  also  had  a  lien  upon  the  stock  of 
its  members  for  debts.     After  the  articles  were  signed  and  tin- 
corporation  organized  and  the  articles  of  association  published, 
1  1 


INCORPORATION   AND    ORGANIZATION   OF    CORPORATIONS. 

the  officers  were  required  to  make  and  file  with  the  Secretary  of 
State  (and  a  duplicate  thereof  with  the  town  clerk  of  the  town 
where  the  corporation  was  to  transact  its  business)  a  certificate 
setting  forth,  (1)  the  purpose  of  the  corporation;  (2)  the  amount 
of  its  capital  stock;  (3)  the  names  of  stockholders  and  the  num- 
ber of  shares  held  by  each.  Annual  reports  were  made  obliga- 
tory. Stockholders  were  made  liable  for  all  capital  refunded 
to  them,  and  made  personally  liable  for  the  declaration  of  illegal 
dividends. 

The  passage  as  well  as  the  operation  of  the  first  Connecticut 
act  was  watched  closely  by  the  legislative  bodies  of  the  neighbor- 
ing States,  with  the  result  that  by  1850  there  were  in  the 
neighborhood  of  a  score  of  general  business  corporation  acts  in 
force  and  effect  in  various  parts  of  the  country,  modelled  with 
some  few  exceptions  closely  after  the  Connecticut  act  above  re- 
ferred to.  The  operation  of  these  general  acts  was  so  satisfac- 
tory that  a  new  element  appeared  in  the  passage  by  various  States 
of  constitutional  amendments  forbidding  absolutely  the  creation 
of  private  corporations  for  purposes  of  profit  by  special  act  of 
the  legislature.  This  has  been  continued  until  at  the  present 
time  special  charters  cannot  be  procured  save  in  seven  of  the 
Commonwealths. 

The  next  development  is  to  be  noted  along  the  line  of  enlarge- 
ment of  corporate  purposes  and  powers.  Gradually  the  restric- 
tion of  the  earlier  incorporation  acts  limiting  the  right  and 
benefits  thereof  to  those  desiring  to  incorporate  companies  for 
manufacturing  and  mining  purposes  was  removed  so  as  to  permit 
practically  of  incorporation  for  any  lawful  purpose.  At  the  same 
time  there  came  a  demand  on  the  part  of  prospective  incorpora- 
tors for  greater  powers  than  were  permitted  at  common  law, 
—  such,  for  example,  as  the  right  to  perform  constituent  acts 
outside  of  the  domiciliary  State,  to  hold  stock  and  bonds  in  other 
corporations,  and  to  amend  their  charters  unrestrictively.  In  this 
way  there  came  to  be  found  in  many  of  the  corporation  acts  a 
large  number  of  extraordinary  powers  which  were  not  recognized 
at  common  law.  This  served  to  greatly  popularize  the  corporate 
form  of  organization  as  compared  with  individual,  partnership,  or 
joint  stock  company  enterprises.  The  result  which  followed  was 
natural.  The  several  State  legislatures  proceeded  one  after  the 
other  to  enact  statutes  compelling  incorporators  when  organizing 
2 


INTRODUCTION. 

corporations  to  pay  a  license  tax  graduated  according  to  the  cap- 
italization of  the  corporation.  In  this  way  certain  States  —  nota- 
bly New  Jersey,  New  York,  Delaware,  West  Virginia,  and  Maine  — 
have  secured  a  very  large  revenue  —  all  to  the  satisfaction  of  the 
average  tax-payer. 

It  is  characteristic  of  State  legislatures  that  they  never  fail 
to  take  advantage  of  an  opportunity  to  relieve  a  majority  of 
voters  from  the  burdens  of  taxation  at  the  expense  of  a  few. 
Doubtless  it  was  with  this  laudatory  purpose  in  mind  that  they 
next  proceeded  to  enact  statutes  requiring  corporations  to  pay  an 
annual  license  tax  based  upon  either  their  authorized  capitaliza- 
tion, the  amount  of  capital  invested  in  the  State,  or  the  amount  of 
dividends  paid  annually  to  stockholders.  The  success  of  a  few 
States  in  securing  large  revenues  from  both  organization  and 
license  taxes  resulted  in  legislative  action  in  other  States  taken 
with  a  view  to  securing  a  proper  share  of  the  incorporation  busi- 
ness, which  had  hitherto  enured  to  the  benefit  of  two  or  three 
favored  Commonwealths.  This  may  be  properly  described  as  the 
era  of  the  "  tramp  corporation."  That  is,  it  was  about  this  time 
that  there  appeared  a  well-defined  tendency  on  the  part  of  incor- 
porators to  go  outside  of  the  State  of  their  residence  for  a  charter 
under  which  they  planned  to  do  business  exclusively  in  some 
foreign  State.  The  result  has  been  that  incorporators  have  grad- 
ually accustomed  themselves  to  going  for  their  charters  to  those 
States  which  are  commonly  known  as  leading  incorporating 
States.  In  this  group  will  be  found  at  the  present  time  New 
Jersey,  New  York,  Delaware,  West  Virginia,  South  Dakota, 
Maine,  Nevada,  Arizona,  Connecticut,  District  of  Columbia, 
Virginia,  Oklahoma,  North  Carolina,  and  Alabama. 

Speaking  in  general  terms,  it  may  be  said  that  a  great  majority 
of  the  business  corporation  acts  in  force  in  this  country  to-day  are 
sadly  in  need  of  revision.  Thus,  for  example,  the  incorporation 
acts  of  Iowa,  Nebraska,  New  Hampshire,  Vermont,  Rhode  Island, 
Arizona,  Mississippi,  and  the  District  of  Columbia  are  more  or 
less  crude  in  construction,  and  lack  many  of  the  essentials  of  com- 
plete and  satisfactory  acts.  The  incorporation  laws  of  Georgia, 
Pennsylvania,  and  Maryland  are  veritable  "  legal  antiques,"  and 
would  bear  revision  without  any  injury  whatever  to  the  best 
interests  of  those  Commonwealths.  The  incorporation  acts  of 
Indiana,  Minnesota,  Tennessee,  Pennsylvania,  and  Louisiana  are 

3 


INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS. 

so  involved  as  to  lead  to  almost  certain  confusion  when  an  attempt 
is  made  to  take  advantage  of  their  provisions. 

In  regard  to  the  attitude  taken  by  the  legislatures  of  the  several 
States  in  the  framing  of  these  General  Acts,  attention  is  called  to 
some  remarks  of  the  Committee  on  Corporations  addressed  to  the 
legislature  of  Massachusetts  in  1903,  which  were  as  follows : 

"The  history  of  corporations,  as  well  as  the  logic  of  the  case, 
shows  that  there  are  possible  two  general  theories  as  to  the  State's 
duties  in  creating  corporations.  First,  the  old  theory  that  being 
creatures  of  the  State,  they  should  be  guaranteed  by  it  to  the  public 
in  all  particulars  of  responsibility  and  management;  and  the  modern, 
quite  opposite  theory  that,  in  the  absence  of  fraud  in  its  creation  or 
government,  an  ordinary  business  corporation  should  be  allowed  to  do 
anything  that  an  individual  can  do.  Under  the  old  theory  the  capi- 
tal stock  of  a  corporation  was,  in  the  law,  considered  to  be  a  guarantee 
fund  for  the  payment  of  creditors  as  well  as  affording  a  method  of 
corporate  enterprise.  There  resulted  from  this  principle  not  only  the 
fundamental  proposition  that  the  capital  stock,  being  in  the  nature 
of  a  guarantee  fund,  should  be  paid  for  at  its  par  value  in  actual 
cash,  but  all  the  other  provisions  to  protect  creditors  or  other  persons 
having  dealings  with  the  corporation,  such  as  that  the  debts  of  a 
corporation  should  not  exceed  its  capital  stock,  designed  primarily  in 
the  interest  of  creditors,  and  secondarily  in  that  of  the  stockholders, 
who  are  looked  after  as  carefully  as  if  they  were  wards  of  the  State 
when  dealing  in  corporation  matters.  Under  the  modern  theory,  the 
State  owes  no  duty  to  persons  who  may  choose  to  deal  with  corpora- 
tions to  look  after  the  solvency  of  such  artificial  bodies ;  nor  to  the 
stockholders  to  protect  them  from  the  consequences  of  going  into 
such  concerns,  the  idea  being  that  in  the  case  of  ordinary  business 
corporations  the  State's  duty  ends  in  providing  clearly  that  creditors 
and  stockholders  shall  be  at  all  times  precisely  informed  of  all  the 
facts  attending  both  the  organization  and  the  management  of  such 
corporations,  and  particularly  that  there  shall  be  full  publicity  given 
to  all  details  of  the  original  organization  thereof." 

It  may  be  of  some  practical  value  at  this  point  to  inquire  briefly 
what  are  the  advantages  of  conducting  business  under  corporate 
management  rather  than  as  an  individual  or  a  copartnership  en- 
terprise.    These  advantages  may  be  enumerated  as  follows : 

First,   Immunity  from  individual  liability  for  debts  arising  out 
of  the  conduct  of  the  business. 
4 


INTRODUCTION. 

Second,  The  securing  of  the  element  of  perpetuity  for  the  life 
of  the  enterprise  in  hand,  so  that  the  death  of  any  of  the  parties 
interested  does  not  interfere  with  the  conduct  of  the  business. 

Third,  The  good-will  and  prestige  of  the  business  is  not  then  the 
property  of  an  individual,  but  belongs  to  the  corporation. 

Fourth,  The  ease  with  which  capital  is  obtained  for  the  use  of 
the  business  through  the  sale  of  stock,  thus  doing  away  with  the 
danger  or  necessity  of  admitting  general  or  special  partners  into 
the  concern. 

Fifth,  The  facility  with  which  money  can  be  obtained  by  the 
sale  of  bonds  or  preferred  stock. 

Sixth,  The  ease  with  which  individual  interests  in  a  business 
may  be  sold  or  transferred,  without  the  necessity  of  obtaining  the 
consent  of  a  third  party  to  the  sale. 

Seventh,  The  removal  of  the  danger  of  being  ruined  through 
the  dishonesty  or  extravagance  of  a -partner. 

Eighth,  The  small  expense  connected  with  the  incorporation  of 
an  enterprise. 

Ninth,  The  wide  and  far  reaching  extension  of  the  powers  of  a 
corporation  as  compared  with  that  of  individuals  and  copartners. 

But  the  advantages  of  corporate  management  being  stated,  the 
question  then  arises  :  Where  should  the  business  man  of  to-day  go 
to  procure  a  charter  for  the  enterprise  he  may  have  in  hand  1 
With  forty-five  States,  five  Territories,  and  the  District  of  Columbia 
all  offering  facilities  for  incorporation,  the  task  of  selection  there- 
from is  by  no  means  an  easy  one.  Where  the  capitalization  is 
small  or  the  corporate  purposes  simple,  it  is  sometimes,  though 
not  always,  best  to  procure  a  charter  from  the  State  where  the 
principal  prospective  incorporators  reside  or  where  they  propose 
to  carry  on  the  company's  business.  On  the  other  hand,  if  the 
capitalization  is  to  be  sought  in  other  localities,  the  proposed  cor- 
porate business  interstate  in  character,  or  the  prospective  capital- 
ization large,  and  the  corporate  purposes  sought  for  broad  in 
character,  then  it  may  be  of  great  advantage  to  procure  a  charter 
in  some  outside  State.  Under  such  circumstances  recourse  is 
usually  had  to  what  are  recognized  as  the  leading  incorporating 
States  already  referred  to. 

But  to  go  further,  it  may  be  stated  that  a  proper  investigation 
into  the  question  as  to  where  to  look  for  a  charter  best  suited  to 
the  immediate  purposes  of  the  proposed  corporation  must  necessa- 


INCORPORATION   AND   ORGANIZATION   OF    CORPORATIONS. 

rily  entail  an  investigation  among  many  others  into  the  following 
matters : 

1.  Nature  of  the  business  corporation  act  of  the  State  wherein 
it  is  proposed  to  incorporate. 

2.  Policy  of  such  States  towards  corporations,  domestic  and 
foreign. 

3.  Publicity  required  as  to  the  condition  of  corporations  or- 
ganized under  the  laws  of  that  particular  State. 

4.  Extent  of  legislative  control  over  private  corporations. 

5.  Nature  of  corporate  powers  desired. 

6.  Initial  expense. 

7.  Amount  of  annual  franchise  tax,  if  any. 

8.  Amount  of  capitalization  permitted,  and  the  par  value  of 
shares  allowed. 

9.  Time  within  which  the  capital  stock  must  be  paid  up. 

10.  Question  as  to  whether  stockholders'  and  directors'  meet- 
ings must  be  held  within  the  State  in  which  the  charter  is  procured. 

11.  Question  as  to  whether  the  principal  office  of  the  corpora- 
tion may  be  maintained  outside  of  the  State  of  its  organization. 

12.  Ascertainment  of  the  question  as  to  whether  stock  can  be 
legally  issued  for  property  or  services  instead  of  for  cash. 

13.  Inquiry  as  to  what  extent  the  appraisal  of  the  board  of  di- 
rectors of  the  property  or  services  paid  for  by  the  issuance  of 
stock  is  conclusive  upon  the  creditors  of  the  corporation  seeking,  in 
case  of  insolvency,  to  enforce  an  alleged  liability  for  unpaid  stock. 

14.  Power  to  issue  preferred  stock. 

15.  Par  value  of  the  corporate  shares  desired. 

16.  Power  to  create  debts. 

17.  Ease  or  difficulty  with  which  the  charter  may  be  amended. 

18.  Amount  of  stockholders'  liability,  if  any. 

19.  Extent  of  directors'  liability,  if  any. 

20.  Ease  or  difficulty  with  which  the  corporation  may  be 
dissolved. 

21.  Nature  of  the  laws  of  the  various  States  with  reference  to 
the  terms  and  conditions  under  which  foreign  corporations  may 
do  business  therein. 

Each  of  the  foregoing  questions  has  its  proper  bearing  when  it 
comes  to  deciding  where  to  go  for  a  charter  for  some  particular 
business  enterprise  which  it  is  proposed  to  prosecute  under  the 
form  of  corporate  organization. 
6 


INTRODUCTION. 

A  discussion  of  each  of  these  matters  will  be  found  in  Part  I. 
of  the  present  treatise. 

Turning  now  to  the  character  of  the  business  corporation  acts 
passed  by  the  legislatures  of  the  various  States  and  Territories,  it 
will  be  apparent  to  all  that  many  of  them  are  "  wonderfully  and 
fearfully  made." 

If  one  were  to  attempt  to  characterize  and  compare  the  various 
incorporation  acts  of  the  several  States  and  Territories,  it  would 
be  found  a  task  of  great  difficulty,  for  the  reason  that  it  is  almost 
impossible  to  find  a  logical  basis  for  classification.  Any  number 
of  arbitrary  classifications  might  be  adopted,  but  these  would  be 
of  no  value  to  either  the  practitioner  or  the  public  at  large.  What- 
ever attempt  may  be  made  here  along  this  line  must  be  based 
solely  upon  the  most  general  lines  of  similarity  of  the  incorporation 
acts  of  various  States.  As  a  preliminary  to  this,  it  has  been 
noted  that  certain  States  and  Territories  are  known  and  recog- 
nized as  "leading  incorporating  States."  The  ones  to  which  ref- 
erence is  made  are  New  Jersey,  New  York,  Delaware,  West 
Virginia,  Maine,  South  Dakota,  Connecticut,  Massachusetts,  Ari- 
zona, Nevada,  District  of  Columbia,  and  Virginia.  The  great  ma- 
jority of  charters  taken  out  annually  in  this  country  are  procured 
in  the  foregoing  enumerated  States  and  Territories. 

By  many  the  New  Jersey  act  is  considered  to  be  a  model  of 
what  a  business  corporation  act  should  be.  This  fact,  coupled 
with  the  large  revenue  secured  by  the  State  of  New  Jersey 
through  this  medium,  has  resulted  in  the  passage  in  other  States 
of  statutes  modelled  more  or  less  closely  after  the  New  Jersey  act. 
This  fact  prompts  the  first  classification  that  will  be  attempted 
here,  which  will  be  termed  the  "  New  Jersey  Class."  Within  the 
limits  thereof  may  be  properly  included  not  only  New  Jersey,  but 
New  York,  Delaware,  West  Virginia,  Alabama,  Nevada,  North 
Carolina,  New  Mexico,  and  Virginia  as  well. 

Another  classification  would  embrace  a  large  number  of  West- 
ern States  and  Territories,  which  to  a  greater  or  less  extent 
have  modelled  their  corporation  acts  along  the  same  general 
lines  as  that  of  California.  This  class  may  properly  be  referred 
to  as  the  "California  Class,"  and  included  therein  will  be 
found  Colorado,  North  Dakota,  South  Dakota,  Oklahoma,  Idaho, 
Montana,  Oregon,  Washington,  Utah,  Wyoming,  Texas,  and 
Arizona. 

7 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

Another  group  will  be  known  as  the  "  Maine  Group,"  for  the 
reason  that  the  plan  has  been  therein  adopted  of  having  the  cor- 
poration organized  before  a  certificate  of  incorporation  or  organiza- 
tion is  filed  with  or  issued  by  the  State  officials.  In  this  class 
belong  Maine,  Massachusetts,  Connecticut,  Illinois,  Missouri, 
Arkansas,  and  Indian  Territory. 

Iowa  and  Nebraska  have  acts  very  closely  resembling  each 
other,  and  may  be  grouped  as  the  "  Iowa  Class."  In  another 
group,  which  we  shall  call  the  "  Pennsylvania  Class,"  are  to  be 
found  Pennsylvania,  South  Carolina,  Florida,  Mississippi,  and 
Kansas.  The  distinguishing  feature  of  this  class  is  that  the  incor- 
poration scheme  adopted  embraces  a  petition  for  incorporation  by 
the  incorporators  addressed  to  State  officials,  to  be  followed  by 
the  filing  of  a  certificate  of  incorporation  if  the  petition  is 
favorably  acted  upon. 

Another  group  may  be  known  as  the  "  Kentucky  Group,"  in 
which  belong  Kentucky,  Ohio,  New  Hampshire,  Rhode  Island,  and 
Vermont.  The  resemblance  here,  it  must  be  admitted,  is  more  fan- 
cied than  real,  and  probably  does  not  depend  upon  any  actual  in- 
tent to  copy  the  first  Kentucky  act.  In  the  "  Michigan  Class  "  are 
to  be  found  Michigan,  Wisconsin,  and  Minnesota,  all  of  which 
possess  acts  resembling  each  other  in  certain  features.  It  is 
impossible  to  place  Georgia,  Indiana,  Louisiana,  Maryland,  and 
Tennessee  in  any  specified  class.  They  all  possess  inadequate 
and  certainly  unique  business  corporation  acts,  which  are  not 
likely  to  be  copied  by  any  other  State  in  this  day  and  generation. 


PAKT   I. 

INCORPORATION   AND   ORGANIZATION   OF 
CORPORATIONS. 


CHAPTER  I. 

DRAFTING   THE   CHARTER. 

§  1.  General  Remarks  on  Corporate  Charters.  —  Incorporation 
is  a  form  of  expression  of  the  sovereign  political  power  of  the 
State  in  the  creation  of  a  juristic  person  possessing  such  limited 
powers  as  may  be  granted  to  it  by  the  legislative  branch  of  our 
State  or  national  government.  The  growth  of  the  corporate 
form  of  organization  affords  an  example  of  the  rapid  evolution 
from  a  somewhat  circumscribed  beginning  to  proportions  that 
can  only  be  described  in  this  age  of  industrial  trusts  and  com- 
binations as  colossal  in  character.  Even  the  courts  have  not 
infrequently  called  attention  to  the  modern  disposition  to  incorpo- 
rate everything.1 

Much  of  this  is  due  no  doubt  to  the  passage  by  the  various  State 
legislatures  of  what  are  commonly  known  as  "  business  corpora- 
tion acts."  The  phrase  "  business  corporation,"  in  this  connec- 
tion, is  a  broad  term,  and  includes  all  corporations  engaged  in 
business  for  profit,  as  distinguished  from  municipal  and  eleemosy- 
nary corporations.2  The  creation  of  corporations  organized  for 
profit  by  special  act  is  now  forbidden  by  constitutional  pro- 
vision in  all  but  seven  of  the  States.3  The  existence  through- 
out the  country  of  general  incorporation  acts  has  fully  reversed  • 
the  old  policy  of  granting  exclusive  privileges  of  any  kind  to 
corporations.4 

1  See  In  re  Italian  Mut  Ben.  Ass'n,  New  Hampshire,  Rhode  Island,  Sonth 
4  Pa.  Dig.  Rep.  357.  Carolina,  and  Vermont. 

2  Adams  o.  Company,  Fed.  Cases  No. 47.  *  People   ».  Company,  ISO  DL268;     2 

3  Connecticut,  Florida,  Massachusetts,  N.  E.  798. 

9 


§  1     INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS.     [PART  I. 

The  purpose  of  restricting  the  power  to  create  corporations  by 
special  act  has  been  well  set  forth  as  follows  :  "  To  inaugurate  the 
policy  of  placing  corporations  of  the  same  kind  upon  a  perfect 
equality  as  to  all  future  grants  and  powers  by  making  such  laws 
applicable  to  all  parts  of  the  State  and  thereby  securing  the  vigi- 
lance and  attention  of  its  whole  representation,  and,  finally,  of 
making  the  judicial  construction  of  their  powers  or  the  restric- 
tions imposed  upon  them  equally  applicable  to  all  corporations  of 
the  same  class."  * 

It  is  universally  recognized  in  this  country  that  legislative 
authority  is  essential  to  the  creation  of  a  corporation.2  Incor- 
porators cannot  come  together  and  agree  to  become  a  corporation 
without  conforming  to  legislative  requirements.3  It  has  been  well 
said  "  that  there  is  an  obvious  reason  for  making  such  organiza- 
tion by  written  articles  of  agreement  a  condition  precedent  to  the 
exercise  of  corporate  rights.  It  is  the  basis  upon  which  all  subse- 
quent proceedings  are  to  rest,  and  is  designed  to  take  the  place  of 
a  charter  or  act  of  incorporation  by  which  corporate  rights  and 
privileges  are  usually  granted.  If  there  were  no  such  provisions, 
there  would  be  an  absence  of  any  provision  by  which  the  right  to 
exercise  corporate  powers  could  be  definitely  fixed  and  established, 
and  there  would  be  no  means  of  ascertaining  the  rights  of  stock- 
holders and  of  persons  dealing  with  such  association."  4 

The  charter  of  a  company  together  with  the  general  laws  of  the 
State  of  its  creation,  enumerating  and  limiting  the  powers  of  all 
corporations  of  that  class,  constitutes  the  measure  of  its  powers, 
and  the  enumeration  thereof  implies  the  exclusion  of  all  other 
powers  except  such  as  are  incidentally  or  necessarily  implied.5 

The  instrument  by  which  corporations  are  created  is  known  by 
different  names  in  various  parts  of  the  country.  The  term 
"  charter  "  is  a  word  which  has  descended  to  us  from  the  common 
law  existing  in  England  long  before  the  United  States  became  a 
nation.  It  originally  referred  to  the  specific  grant  of  certain 
privileges  running  from  the  sovereign  to  a  subject.  Subsequently 
it  was  applied  in  this  country  to  a  specific  act  of  the  legislature 

1  Atkinson  v.  Company,  15  O.  St.  21  ;  4  Utley  v.  Union  Tool  Co.,  11  Gray 
see  also  Ex  parte  Pritz,  9  la.  30.  (Mass.),  139. 

2  McKim  v.  Odom,  8  Bland's  Chan-  5  G.  L.  &  H.  I.  Co.  v.  Kamper,  73  Ala. 
eery  (Md.),  407.  325;     Steiner    v.    Steiner    L.    &    L.    Co. 

3  Stowe  v.  Flagg,  72  111.  397.  (Ala.),  26  So.  494;  Salt  Co.  v.  East  Sagi- 

naw, 13  Wall.  (U.  S.)  378. 

10 


CHAP.  I.]  DRAFTING    THE    CHARTER.  £  1 

creating  a  corporation  with  distinct  and  exclusive  purposes  and 
powers.  With  the  advent  of  the  passage  of  general  business  cor- 
poration acts  in  this  country,  the  word  "  charter  "  has  been  re- 
placed by  such  terms  as  "  articles  of  incorporation,"  "  articles  of 
association,"  'k  certificate  of  incorporation,"  "  certificate  of  organi- 
zation," and  "  petition  for  incorporation."  It  goes  without  saying 
that  under  the  Business  Corporation  Acts  referred  to  there  must 
be  articles  of  some  sort  properly  executed.1 

It  has  been  said  that  the  essence  of  a  corporation  consists,  first, 
in  its  capacity  to  have  perpetual  succession  under  a  special  name 
and  in  an  artificial  form;  second,  to  take  and  grant  property  and 
contract  obligations,  sue  and  be  sued  by  its  corporate  name  as  an 
individual ;  and  third,  to  receive  and  enjoy  corporate  privileges 
and  immunities.  The  first  two  are  the  privileges  of  the  incorpo- 
rators, and  the  third  is  the  franchise  of  the  corporation.2 

As  far  back  as  1612  Lord  Coke  enumerated  the  essentials  of  a 
corporate  charter  as  follows  :  (1)  lawful  authority  for  incorpora- 
tion ;  (2)  persons  to  be  incorporated;  (3)  corporate  name;  (4) 
domicile ;  (5)  words  sufficient  in  law  enumerating  the  purposes 
and  powers  of  the  corporation.  All  of  these  essentials  and  many 
more,  which  by  statute  are  made  essentials,  are  to  be  found  in 
the  business  corporation  acts  of  to-day. 

Referring  now  briefly  to  those  matters  which  are  by  statute  in  this 
country  made  necessary  parts  of  articles  of  incorporation, the  follow- 
ing may  be  said :  with  the  exception  of  Arkansas,  Georgia,  In- 
dian Territory,  Maine,  Massachusetts, Mississippi,  New  Hampshire, 
Ohio,  Oregon,  Rhode  Island,  South  Carolina,  Tennessee,  and  Ver- 
mont, all  have  incorporation  acts  requiring  that  the  duration  of  cor- 
porate existence  shall  be  set  forth  in  the  articles  of  incorporation. 

Again,  all  but  New  Hampshire  and  Tennessee  require  a  state- 
ment as  to  the  number  and  par  value  of  shares.  More  than 
half  the  States  prescribe  that  the  names  of  the  first  or  tem- 
porary board  of  directors  shall  be  inserted  in  the  articles,  while 
most  of  the  remaining  States  require  that  the  number  of  directors 
only  shall  be  inserted.  Fully  half  the  States  authorize  the  inser- 
tion in  the  articles  of  provisions  for  the  issuance  of  preferred 
stock.     A  few  of  the  Commonwealths  require  thai   the  articles 

1  Abbott   v.    Company,    4    Neb.   416;  »  Snail  v.  City  of  Chicago,  138 HI    H.i  ; 

Lusk  v.  RiggB  (Neb.),  97  N.   W.  1<W3;     24  N.  B.  582. 
Childs  v.  Smith,  55  Barb.  (N.  V.)  45. 

11 


§  2     INCOKPORATION   AND    ORGANIZATION   OF   CORPORATIONS.     [PART  I. 

shall  contain  a  statement  as  to  the  amount  of  stock  subscriptions, 
the  amount  of  capital  stock  paid  in,  and  the  amount  of  capital 
with  which  the  corporation  will  begin  business.  Alaska,  Arizona, 
Delaware,  Louisiana,  Iowa,  Minnesota,  Nebraska,  and  Utah  require 
that  the  date  of  the  annual  meeting  shall  appear  in  the  articles. 
Alabama,  Connecticut,  Delaware,  Maryland,  Massachusetts, 
Nevada,  New  Jersey,  New  York,  North  Carolina,  South  Carolina, 
Utah,  Virginia,  West  Virginia,  and  Wisconsin  expressly  authorize 
the  insertion  in  the  articles  of  provisions  for  the  regulation  of  the 
internal  affairs  of  the  corporation.  If  it  is  desired  to  protect 
stockholders  from  personal  liability  for  corporate  debts,  there 
must  be  inserted  in  the  articles  of  incorporation  of  companies 
organized  under  the  laws  of  Arizona,  Delaware,  Iowa,  Kentucky, 
and  Utah  provision  specifically  exempting  stockholders  from  such 
liability. 

And  so  the  enumeration  might  be  continued  almost  indefinitely 
of  special  provisions  required  in  particular  States  in  connection 
with  the  incorporation  of  corporate  enterprises. 

Finally,  attention  is  called  to  the  various  steps  necessary  to 
create  a  corporation  under  the  modern  business  corporation  acts, 
qualified  in  every  respect  to  carry  out  the  purposes  for  which 
it  is  formed.  These  steps  may  be  enumerated  as  follows :  (1)  the 
drafting  of  the  articles  of  incorporation  ;  (2)  the  signing  of 
the  articles  by  the  requisite  number  of  incorporators,  and  ac- 
knowledgment of  the  same  before  an  officer  duly  authorized  to 
take  such  acknowledgments ;  (3)  filing  and  recording  the  arti- 
cles with  the  proper  State  and  county  officials  after  payment  of 
the  requisite  organization  tax  and  riling  and  recording  fees  ;  (4) 
organization  of  the  corporation  ready  for  the  transaction  of  busi- 
ness ;  (5)  securing  the  necessary  permit  from  State  officials  (if 
any  is  required)  to  transact  business  within  the  domiciliary  State.1 

§  2.  Incorporators.  —  An  incorporator  is  one  of  the  constituents 
of  a  corporation,  who  by  petition  or  by  means  of  the  execution 
of  articles  of  incorporation  invokes  the  exercise  of  the  supreme 
political  power  of  the  State  in  the  creation  of  a  corporation  for  the 
benefit  of  himself  and  associates  and  their  successors  in  interest.2 

The  words  "  corporator  "  and  "  incorporator  "  have  essentially 

1  See  Carmody  v.  Powers,  60  Mich.  26  ;  2  In  re  Lady  Bryan  Co.,  1   Saw.  349  ; 

26  N.  W.  80.  E.    &  N.  Y.  C.  R.  R.  Co.  v.    Owen,   32 

Barb.  (N.  Y.)  616. 

12 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  2 

the  same  meaning.  The  qualifications  of  incorporators  vary 
with  the  State  from  which  the  charter  is  sought.  The  usual 
number  of  incorporators  required  by  the  various  acts  varies  from 
one  to  five.  In  Iowa  and  Nebraska  one  person  may  incorporate.1 
Residential  requirements  on  the  part  of  incorporators  exist  in 
Alaska,  California,  Idaho,  Kansas,  Maryland,  New  York.  North 
Dakota,  Ohio,  Oklahoma,  Pennsylvania,  South  Dakota,  Texas. 
Utah,  and  Wisconsin.  Failure  to  state  residence  of  incorporators 
in  articles  is,  however,  not  fatal  to  corporate  existence.4 

The  general  rule  is  that  citizenship  is  not  necessary  unless 
specifically  required  by  the  statute  of  incorporators.5  It  has  been 
said  that  in  the  absence  of  statute  providing  otherwise  incorpora- 
tors must  be  stockholders.6  The  rule,  however,  appears  to  be 
otherwise  in  Oregon,  Pennsylvania,  South  Dakota,  Texas,  Tennes- 
see, and  Georgia.7  In  a  majority  of  the  States,  however,  statutes 
expressly  prescribe  that  incorporators  must  be  subscribers  for  at 
least  one  share  of  the  capital  stock  of  the  proposed  corporation. 

If  married  women  are  under  no  disabilities,  they  may  act  as 
incorporators.8  Aliens  may  be  incorporators  if  statute  does  not 
provide  otherwise.9 

Some  of  the  States  expressly  limit  the  right  to  become  incorpo- 
rators to  natural  persons.  However,  where  no  such  express  limi- 
tation exists,  there  is  no  question  but  what  the  word  "  person," 
when  used  in  the  statute  limiting  such  matters,  would  not  permit 
corporations  to  act  as  incorporators.10 

The  rule  seems  to  be  that  incorporators  must  be  of  full  age.11 
Incorporators  must  also  be  known  persons.12     The  modern  rule 

1  P.  B.  Corporation  v.  Lamson,  16  Me.  67  N.   W.  947  ;  Ramsey  v.  Tod,  95  Tex. 

224;    Ulmer  v.    Company,    98    Me.    579;  614 ;  69  S.  YV.  133;  Bvrnesiv  Beck,  10  6a. 

57  Atl.  1001.  121  ;    B.  B.  &  T.  Co.'  v.  J.  B.  T.  Co.,  101 

4  State  v.  Foulkes,  94  Ind.  493  ;  see  also  Tenn.  545  ;  48  S.   W.   228;  Wechflelherg 

Halhert  v.  Association  (Tex.  Civ.  App.),  34  p.  Bank,  64  Fed.  90. 

S.  W.  636.  8  [n    re    application    for    charter,   27 

6  M.  N.  F.  Co.  v.   Baumbach,  32  Fed.  Weekly  Notes  of  Cases  (Pa),  399;  In  re 

205  ;  A.  S.  Co.  v.  Heidenheimer,  80  Tex.  Century  Club,  27  \V.  N.  ('   (Pa.)  399. 

344;   15  S.  W.  1038.  "   Lamar  v.   Browne,  92  U.  S.   187;  23 

6  Gulliver  v.  Koelle,  100111.141  ;  Byron-  Law.  Ed.  650. 

ville  Creamery  Ass'n  v.  Ivers  (Minn.),  100  10  C.  R.  Co.  v.  P.  R.  Co.,  31   N.  .1.   Eq. 

N.  W.  387  ;  Chase  v.  Lord,  77   X    V.   11  ;  475;  Insurance  Co.  v.  N.  II.  P.  Co.,  37  La. 

Medler  v.  Company,  6  N.  Mex.  331.  An.  233. 

7  Coyote,  etc.  Co.  v.  Ruble,  8  Ore.  284  ;  "  Matter  of  Globe,  etc.  Ass'n,  135 
Densmore  Oil  Co.  v.  Densmore,  64  Pa.  St.  N.  Y.  280;  32  N  15.  122;  II.  I'.  Road  Co 
43;  Singer  Mfg.  Co.  v.  Peck.  9  S.  D.  29;  v.  Townsend,  13  Out.  Ap.  Rep   534. 

'-'  ('.  It.  K.  of  N.  J.  v.  P.  K.  K.  Co.,  81 
N.  J.  Eq.  475. 

18 


§  3     INCORPORATION   AND    ORGANIZATION   OF   CORPORATIONS.     [PART  I. 

seems  to  be  that  incorporators  are  merely  conduits  for  the  pur- 
pose of  organization  for  the  benefit  of  future  stockholders.1 
Under  this  rule  there  can  be  no  valid  legal  question  raised  at  this 
day  as  to  the  legality  of  the  use  of  what  are  commonly  known  as 
"  dummy  incorporators "  in   the    organization   of   corporations.2 

§  3.  Corporate  Name.  —  Every  corporation,  like  an  individual, 
must  have  a  name  under  which  its  business  must  be  carried  on. 
It  has  been  said  "  that  the  name  goes  to  the  very  being  of  the  cre- 
ation, the  knot  of  the  combination,  without  which  corporations 
could  not  do  their  corporate  acts,  without  which  it  is  unable  to 
implead  and  be  impleaded,  to  take  any  action  until  it  hath  gotten 
a  name."  3  The  word  "  company,"  which  is  usually  a  part  of  the 
corporate  name,  does  not  necessarily  imply  a  corporation.4  In 
Alabama,  Colorado,  Connecticut,  Delaware,  Kansas,  Kentucky, 
Missouri,  North  Carolina,  and  Virginia  statutes  exist  which  pro- 
vide that  the  corporate  name  must  end  with  some  such  word  as 
"  association,"  "  company,"  "  corporation,"  "  club,"  "  society," 
"syndicate,"  or  "limited."5 

In  a  number  of  the  States  corporations  upon  organization  are  for- 
bidden to  take  the  same  name  as  that  of  an  existing  domestic  cor- 
poration, or  one  so  similar  as  to  be  calculated  to  deceive  or  cause 
confusion.6  Some  few  of  the  States  go  still  further  and  forbid  the 
use  of  the  name  of  any  foreign  corporation  by  newly  created  do- 
mestic corporations,  provided  the  former  has  secured  a  permit  to 
do  business  in  the  State.  The  States  here  referred  to  are  Connec- 
ticut, Delaware,  Kentucky,  Massachusetts,  New  York,  Utah,  Vir- 
ginia, and  West  Virginia.  In  the  absence  of  such  statute  there  is 
ordinarily  no  restriction  on  the  right  to  take  the  corporate  name 
of  a  foreign  corporation.7 

The  corporate  name  is  the  property  of  the  corporation,  and 
equity  will  protect  the  corporation  in  any  jurisdiction  from  the 

1  Densmore  Oil  Co.  v.  Densmore,  64  4  Clarke  v.  Insurance  Co.,  7  Mo.  App. 
Pa.  St.  43.  77. 

2  Salamon  v.  Salamon  Co.  (House  of  5  On  use  of  word  "  limited  "  see  Sparks 
Lords  Cases),   45  Weekly  Rep.  193;    75  v.  Company,  3  Idaho,  306 ;  29  Pac.  134. 
Law  Times  Rep.  426.     But  see  Louisville  6  See  State  v.  McGrath,  75  Mo.  424. 
Banking  Co.  v.  Eisenman,  94  Ky.  83;    21  '  L.  V.  C.  Co.  v.   Hamblen,    23    Fed. 
S.  W.  531,  1049;  Tillyer  v.  Hero  Jar  Co.,  225;  G.   I.  R.   G.   M.  Co.  v.  G.   R.  Co., 
17  Phil.  (Pa.)  153.  128  U.  S.   598;  9  S.    Ct.  166;  People  v. 

3  Smith  v.  Plank  Road,  30  Ala.  650  ;  H.  L.  Sus.  Co.,  Ill  Mich.  405 ;  69  N.  W. 
Hazelton  Boiler  Co.  v.  Company,  137  111.  653. 

231 ;  28  N.  E.  248. 

14 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  4 

fraudulent  use  of  another  name  so  like  it  as  to  deceive  the  public 
and  rob  it  of  its  business.1  The  mere  fact  that  the  corporation 
against  whom  a  restraining  order  is  asked  for  has  secured  a 
charter  in  that  particular  State  while  the  complaining  corporation 
has  never  been  incorporated  there  or  even  procured  a  permit  to  do 
business  there,  will  not  in  most  jurisdictions  prevent  the  granting 
of  such  relief.2 

Where  statutes  exist,  such  as  have  been  referred  to,  forbidding 
the  use  of  similar  corporate  names,  while  the  attitude  of  the  Sec- 
retary of  State  in  such  cases  with  respect  to  the  issuance  of  a  cer- 
tificate of  incorporation  is  ministerial,  yet  he  has  reasonable 
discretion  in  the  matter  and  cannot  be  mandamused  when  exercis- 
ing such  discretion.3  In  protecting  the  use  of  a  corporate  name 
the  courts  proceed  on  the  theory  that  such  name  should  be  pro- 
tected in  equity  on  principles  analogous  to  those  which  prevail 
in  the  use  of  trademarks.4 

§  4.  Corporate  Purposes.  —  By  corporate  purposes  is  meant  the 
specific  declaration  in  the  articles  of  incorporation  of  the  nature 
of  the  business  which  the  corporation  is  authorized  to  carry  on. 
Such  statement  is  a  matter  which  primarily  concerns  the  stock- 
holders, and  to  a  less  degree  the  State  under  whose  authority  the 
corporation  is  created. 

In  the  granting  of  corporate  privileges  it  is  important  to  specify 
the  purposes  and  objects  because  the  courts  should  have  some 
guide  in  keeping  them  within  the  powers  granted  and  conveyed. 
Unless  they  be  specified  with  particularity  in  the  petition  or  in  the 
granting  thereof,  they  might  do  as  they  pleased  and  the  law  be 
powerless  to  restrain  them.5  The  purposes  enumerated  in  the 
articles  of  association,  read  in  connection  with  the  general  laws 
under  which  the  charter  is  procured,  is  the  measure  of  the  powers 
of  the  corporation.6 

1  Ind.  Mut.  Dep.  Co.  v.  Central  Mut.  Higgins  Soap  Co.,  144  N.  Y.  462;  39 
Dep.  Co.,  23  Ky.  L.  R.  2247;  66  S.  W.  N.  E.  490;  American  Clay  Mfg.  Co.  v. 
1032.  American  Clay  Mfg.  Co.,  198  Pa.  St.  189  ; 

2  Ind.  Mut.  Dep.  Co.  v.  Central  Mut.  47  Atl.  936;  Hazleton  Boiler  Company  v. 
Dep.  Co.,  23  Ky.  L.  K.  2247  ;  66  S.  W.  Hazleton  T.  Boiler  Co.,  142  111.  494  ;  30 
1032 ;  P.  T.  S.  D.  I.  Co.  v.  P.  T.  Co.,  123  N.  E.  339. 

Fed.  534.  5  In  re  John  II.  Dcveaux  ft  <//.,  54  6a 

3  State  ex  rel.  v.  McGrath,  92  Mo.  355.      673. 

*  P.  T.  S.  1).  1.  Co.  v.  P.  T.  Co.,  123  o  G.  B.  &  M.  B.  Co.  v.  Union  Steam- 

Fed.  534;  Grand  Lodge  v.  Graham,  96  boat  Co.,  107  |:.  s.  98;  27  I,.  E.  413;  Suit 
Iowa,  592;  65  N.  W.  837  ;  Higgins  Co.  v.     Co.  r.  Last  Saginaw,  13  Wall.  (U.  B.)    '.7s 

L5 


§  4     INCORPORATION    AND    ORGANIZATION    OP    CORPORATIONS.     [PART  I. 

It  must  be  remembered  that  articles  of  association  under  general 
acts  are  the  productions  of  private  citizens  gotten  up  in  the  interest 
of  the  parties  who  propose  to  become  incorporated,  and  who  are 
stimulated  by  their  zeal  for  personal  advantage  rather  than  for  the 
general  good.  They  are,  so  far  as  permitted  in  accordance  with 
the  law,  substitutes  for  legislative  action  in  the  place  of  the  will 
of  the  people  of  the  State  as  formerly  expressed  by  acts  of  the 
legislature.  While  it  was  true  at  one  time  that  all  grants  from 
the  State  to  corporations  were  strictly  construed,  this  principle  has 
been  subject  to  considerable  modification  of  late  years.  This  is 
owing  to  the  passage  of  general  incorporation  acts  which  were  un- 
doubtedly framed  and  passed  with  the  intent  to  liberalize  the  law 
in  respect  to  such  grants.1 

"  It  is  fundamental  that  a  corporation  can  be  created  and  exist 
only  by  statutory  authority,  and  if  a  corporation  organizes  under 
a  general  act  and  inserts  in  its  articles  of  incorporation  regula- 
tions and  provisions  additional  to  those  required  by  the  creative 
statute,  such  additional  regulations  and  privileges  are  voidable  at 
the  will  of  the  State,  nor  is  the  corporation  permitted  to  place  any 
restrictions  on  the  manner  of  exercising  its  corporate  duties  other 
than  the  statute  provides.  If  the  corporation  claims  the  right  to 
exist  for  a  certain  purpose,  it  must  show  that  it  was  organized 
under  a  statute  authorizing  the  creation  of  a  corporation  for  that 
particular  purpose."  2 

The  statutes  of  the  various  States  differ  of  course  with  respect 
to  the  character  of  the  purposes  for  which  corporations  may  be 
formed.  Some  of  them  permit  incorporation  for  any  lawful  busi- 
ness, without  any  limitations  whatsoever.  The  phrase  "  other 
lawful  business,"  found  in  so  many  of  the  statutes,  is,  according  to 
the  weight  of  authority,  held  not  to  be  subject  to  the  noscitur  a 
sociis  rule,  and  is  used  as  a  "  catch-all "  for  the  purpose  of  includ- 
ing any  kind  of  business  for  pecuniary  profit  not  otherwise  pro- 
vided for.3  In  setting  out  the  purposes,  this  must  be  done  with 
reasonable  certainty  and  definiteness.  For  example,  an  appli- 
cation for  a  charter  was  refused  in  Pennsylvania,  where  it  was 
stated    that,   in    addition    to    certain    enumerated    objects,  the 

1  Finnegan  v.   Noerenberg,    52    Minn.  3  Brown  v.  Corbin,  40    Minn.  508 ;  42 
239;  53  N.  W.  1150.  N.  W.  481 ;  Green  v.  Breard,  35  La.  An. 

2  Indiana  Bond  Co.  v.   Ogle  et  al.,  22  875  ;  Dittman  v.  Company  (N.  J.),  54  Atl 
Ind.  Ap.  593  ;  54  N.  E.  407.  570. 

16 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  4 

corporation  was  organized  for  "  such  other  purposes  as  might  be 
agreed  upon  in  the  future."  1 

In  many  of  the  States  express  mention  is  made  of  the  various 
specific  purposes  for  which  corporations  may  be  created.  As  a 
general  rule  the  incorporators  are  required  to  set  out  in  their 
articles  of  association  the  specific  purpose  or  purposes  for  which 
the  proposed  corporation  is  to  be  organized.2 

Turning  now  to  the  various  States,  we  find  the  following  statu- 
tory provisions  relative  to  the  purposes  for  which  business  cor- 
porations may  be  created.  In  Alabama  for  any  general  business 
or  lawful  enterprise.  In  Arizona  for  the  transaction  of  any  law- 
ful business.  In  Arkansas  for  the  transaction  of  any  lawful 
business.  In  Colorado  for  any  lawful  purpose.  In  California  for 
any  purpose  for  which  individuals  may  associate  themselves.  In 
Connecticut  for  the  transaction  of  any  lawful  business.  In  Dela- 
ware for  the  transaction  of  any  lawful  business  or  to  promote  or 
conduct  any  legitimate  object  or  objects.  In  the  District  of  Co- 
lumbia any  enterprise  or  business  which  may  be  lawfully  con- 
ducted by  an  individual,  except  banking,  real  estate,  and  railroads. 
In  Florida  for  the  transaction  of  any  lawful  business.  In  Georgia 
for  any  purpose  intended  for  pecuniary  profit.  In  Idaho  for  any 
purpose  for  which  individuals  may  lawfully  associate  themselves. 
In  Illinois  for  any  lawful  purpose.  In  Indiana  for  the  transac- 
tion of  any  kind  of  mining,  mercantile,  chemical,  and  manufactur- 
ing business ;  also  grain  elevator,  union  stock  yards,  and  transit 
companies.  In  Iowa  for  the  transaction  of  any  lawful  business. 
In  Kansas  for  the  transaction  of  any  kind  of  manufacturing, 
mining,  chemical,  and  mercantile  business.  In  Kentucky  for 
the  transaction  of  any  lawful  business,  or  to  promote  or  conduct 
any  legitimate  object  or  purpose.  In  Louisiana  for  the  transaction 
of  any  lawful  business,  except  stock  jobbing.  In  Maine  for  the 
transaction  of  any  lawful  business.  In  Maryland  for  the  trans- 
action of  any  kind  of  mining,  manufacturing,  chemical,  or  mer- 
cantile business ;  also  for  shipbuilding  and  industrial  purposes, 
and  for  the  transportation  of  the  products  of  any  manufacturing  or 
mining  corporation.  In  Massachusetts  for  any  lawful  purpose 
except  to  buy  or  sell  real  estate  or  to  sell  or  manufacture  intoxi- 
cating liquors.     In  Michigan  for  the  transaction  of  any  lawful 

1  In  re  Journalists'  Fund,  8  Phil.  212.  a  See  Hughes  v.  Company,  34  Md.  316. 

2  17 


§  4     INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS.     [PART  I. 

business,  but  only  a  manufacturing  and  a  mercantile  business  can 
be  carried  on  by  the  same  corporation.     In  Minnesota   for  the 
transaction  of  any  lawful  business.     In  Mississippi  for  any  lawful 
purpose.     In  Missouri   for  any  purpose  intended   for   profit   or 
gain.     In  Montaua  for  the  transaction  of  any  kind  of  manufact- 
uring, mining,  chemical,  or  mercantile  business,  or  for  any  lawful 
commercial  or  industrial  business,  or  for  carrying  on  any  branch 
of  business  designed  to  aid  in  or  protect  the  interests  of  the 
company.     In  Nebraska  for  the  transaction  of  any  lawful  busi- 
ness.    In  Nevada  for  any  branch  of  trade  or  business,  commerce, 
foreign  or  domestic.     In  New  Hampshire  for  the  transaction  of 
any  lawful  business.     In  New  Jersey  for  any  lawful  purpose  or 
purposes  whatever.     In  New  Mexico  for  mining  and  manufactur- 
ing or  other  industrial  purposes.     In  New  York  for  any  lawful 
purpose  or  purposes.     In  North  Carolina  for  engaging  in   any 
lawful  business.     In  North  Dakota  for  any  purpose  for  which  in- 
dividuals may  lawfully  associate  themselves.     In  Ohio   for   any 
purpose  for  which  individuals  may  lawfully  associate  themselves, 
except  for  carrying  on  a  professional  business.     In  Oklahoma  for 
mining,  manufacturing  or  other  industrial  purposes.     In  Oregon 
for  the  purpose  of   engaging  in  any  lawful  enterprise,  business 
pursuit,  or  occupation.     In  Pennsylvania  for  the  transaction  of 
any  lawful  business,  but  not  for  more  than  one  kind  of  business. 
In  Rhode  Island  to  carry  on  any  ordinary  business.     In  South 
Carolina  for  any  purpose  or  purposes  whatsoever  or  two  or  more 
combined.     In  South  Dakota  for  the  transaction  of  any  lawful 
business.     In  Tennessee  for  the  trade  of  the  merchants,  and  for 
mining,  boring,  manufacturing,  and  other  specified  purposes.     In 
Texas  for  manufacturing  or  mining  and  the  purchase  of  goods, 
wares,  and  merchandise  ;  also  for  buying  and  selling  agricultural 
products  and  for  other  specified  purposes.     In  Utah  for  any  pur- 
pose for  which  individuals  may  lawfully   associate  themselves. 
In  Vermont  for  carrying  on  any  object  or  business  not  repugnant 
to  public  policy  or  the  laws  of  the  State.     In  Virginia  for  any  pur- 
pose which  may  be  lawfully  conducted  by  individuals  or  by  a  body 
politic  and  corporate.     In  Washington  for  any  trade  or  business. 
In  West  Virginia  for  any  purpose  or  business  useful  to  the  public 
for  which  a  firm  or  copartnership  may  be  lawfully  formed.     In 
Wisconsin    for    any    lawful    business    or   purpose  whatever.     In 
Wyoming   for   the    transaction    of  any    kind    of    manufacturing, 
18 


CHAP.  I.]  DRAFTING    THE   CHARTER.  §  5 

mining,  mercantile,  and  chemical  business  or  any  business  designed 
to  aid  in  the  industrial  or  productive  interests  of  the  country. 

The  foregoing  enumeration  of  purposes  for  which  corporations 
may  be  created  in  the  various  Commonwealths  named  above, 
should  be  qualified  by  the  statement  that  in  most  of  them  special 
acts  are  provided  for  certain  classes  of  corporations,  such  as 
banks,  trust  companies,  insurance  companies,  etc.,  under  which 
corporations  of  that  character  must  be  incorporated.  Among  the 
few  States  in  which  corporations  may  be  created  for  any  lawful 
purpose  whatever  including  the  excepted  classes  above  referred 
to  are  Alabama,  Virginia,  and  West  Virginia. 

Finally,  attention  is  called  to  the  fact  that  in  some  few  of 
the  Commonwealths  the  statutes  require  that  the  certificate  set 
forth  the  particular  trade  to  be  carried  on.  Such  a  provision  is 
in  legal  effect  equivalent  to  requiring  that  the  purpose  or  object 
of  the  proposed  corporation  be  set  forth. 

§  5.  Number  of  Corporate  Purposes  Permitted.  —  Difficulty  fre- 
quently arises  in  determining  whether  under  the  provisions  of 
some  particular  business  corporation  act  parties  may  incorporate 
for  the  transaction  of  more  than  one  line  of  business.  In  some 
of  the  States,  notably,  Alabama,  Connecticut,  Delaware,  Maine, 
Massachusetts,  Nevada,  New  Jersey,  New  York,  North  Carolina, 
Virginia,  and  West  Virginia,  the  acts  are  so  framed  as  to  clearly 
authorize  incorporation  of  companies  for  any  number  of  purposes 
not  covered  by  special  acts.  In  all  the  remaining  States,  with  the 
exception  of  District  of  Columbia,  Indiana,  Kansas,  Louisiana, 
Michigan,  Missouri,  Ohio,  Pennsylvania,  Tennessee,  Texas,  and 
Wyoming,  the  matter  is  greatly  simplified  by  State  officials  con- 
struing the  statutes  of  their  respective  States  to  permit  the  incor- 
poration of  companies  for  the  transaction  of  any  number  of  lines 
of  business  not  regulated  by  special  statutes. 

In  Georgia,  Indiana,  Maryland,  Michigan,  Pennsylvania,  Tenn- 
essee, and  Texas  the  different  lines  of  business  are  divided  into 
classes.  Generally  speaking,  parties  are  not  permitted  to  incor- 
porate for  lines  of  business  included  in  more  than  one  of  these 
classes.1  In  Wyoming  the  law  requires  the  certificate  of  incor- 
poration to  have  but  one  general  object.  In  Ohio  only  one 
purpose  may  be  inserted.  In  Kansas  and  Missouri  the  number  of 
purposes  is  only  limited  by  the  provision  of  law  that  the  name  of 

1  The  rule  is  otherwise  in  Indiana  and  Maryland. 

19 


§  5     INCORPORATION   AND   ORGANIZATION    OP   CORPORATIONS.     [PART  I. 

the  corporation  shall  indicate  the  nature  of  the  business  to  be 
carried  on  by  it. 

Some  suggestions  along  the  line  of  determining  the  question  as 
to  the  number  of  purposes  which  may  be  inserted  in  articles  of 
incorporation  in  any  particular  States  may  be  here  presented, 
Where  the  statute  permits  corporations  to  be  formed  for  several 
purposes  named  in  the  alternative,  separated  by  the  disjunctive 
conjunction  "  or,"  it  is  held  that  a  corporation  cannot  be  organized 
thereunder  for  more  than  one  of  such  purposes,  and  that  articles 
of  incorporation  which  include  more  than  one  of  them  are  void, 
and  that  incorporation  under  them  will  be  refused.1 

Again,  it  would  appear  that  where  incorporation  for  only  one 
purpose  is  permitted,  incorporators  must  make  a  choice  of  such 
purpose  themselves  in  the  first  instance,  for  the  courts  have  quite 
generally  refused  to  make  it  for  them.2 

On  this  general  subject  the  Supreme  Court  of  Texas  in  a  recent 
case  spoke  as  follows :  "  A  charter  must  set  forth  the  purpose  for 
which  it  is  formed.  This  for  the  reason  that  if  it  had  been  in- 
tended that  a  corporation  might  be  created  for  two  or  more  of  the 
purposes  specified  in  the  statute,  it  would  have  been  proper  to 
have  stated  '  purpose  or  purposes  for  which  it  is  formed.'  The 
use  of  the  word  '  purpose  '  in  the  singular  number  tends  to  show 
that  it  was  the  intention  of  the  legislature  to  authorize  the 
creation  of  a  corporation  for  only  one  purpose.  It  may  be  true 
that  the  use  of  the  singular  number  may  not  be  the  conclusion  of 
the  question,  and  that  if  there  were  other  purposes  in  the  act 
which  either  by  express  declaration  or  clear  implication  indicate 
that  it  was  intended  to  authorize  incorporation  for  two  or  more  of 
the  designated  purposes,  whether  in  the  same  subdivision  or  not, 
we  should  so  hold.3 

Finally,  it  may  be  said  that  unless  the  statute  expressly  or 
impliedly  permits  the  insertion  of  more  than  one  purpose  in  the 
articles,  the  insertion  of  two  or  more  purposes  therein  will  clearly 
justify  State  officials  in  refusing  to  allow  the  filing  of  the  same.4 

i  State   v.  Beck,   81    Ind.  500;  In  re  8  Ramsey  v.  Tod,  95  Texas,  614;  69 

John  H.  Deveaux  et  al.,  54  Ga.  673.  S.  W.  133. 

M  Williams  v.  Company,  25  Ind.  Ap.  4  Ind.  Bond  Co.  v.  Ogle,  22  Ind.  Ap. 

351  ;  57  N.  E.  581  ;  Bayou  Cook  Nav.  &  593;    54  N.  E.  407;    Woodberry  v.  Mc- 

Fisheries   Co.    v.   Doullut    (La.),  35    So.  Clurg,  78  Miss.  831;    29  So.  514;   Kins- 

729  ;  Or.  Ry.  &  Nav.  Co.  v.  Company,  130  ton,  etc.  Co.  v.   Stroud,   132  N.  C.  413 ; 

U.  S.  1 ;  9  S.  Ct.  409 ;  State  v.  Company,  43  S.  E.  9. 
88  Wis.  512;  60  N.  W.  796. 

20 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  6 

§  6.  Collateral  Attack  upon  Corporate  Purposes  and  Powers.  — 
The  term  "  collateral  attack,"  as  used  in  corporation  law,  has 
reference  to  the  attempt  of  parties  other  than  the  State  (in  direct 
proceedings)  to  question  the  validity  of  a  corporation's  existence 
and  purposes  or  its  right  to  exercise  corporate  powers.  The  law 
reports  are  full  of  conflicting  decisions  relating  to  the  general 
subject  of  collateral  attack  upon  corporate  existence,  purposes, 
and  powers.  The  seemingly  hopeless  confusion  which  exists 
among  the  courts  on  this  subject  is  largely  due  to  a  failure  on 
their  part  to  recognize  that  the  matter  has,  by  a  gradual  process 
of  statutory  and  judicial  legislation,  become  at  the  present  time 
an  academic  one.  It  is  proposed  at  this  point  to  discuss  at 
length  not  only  the  question  of  the  right  to  collaterally  attack 
the  legality  of  corporate  purposes  as  set  forth  in  articles  of  incor- 
poration, but  as  well  to  consider  in  this  same  connection  the  right 
to  collaterally  attack  the  validity  of  corporate  existence  and  the 
right  to  exercise  corporate  powers.  This  for  the  reason  that  all 
these  questions  are  so  closely  related  to  each  other  as  to  properly 
permit  of  discussion  at  one  and  the  same  time. 

At  the  outset,  a  word  should  be  said  as  to  the  policy  that  would 
seem  to  dictate  the  establishment  of  statutory  and  judicial  rules, 
forbidding  the  impeachment  by  indirect  methods  of  a  corpora- 
tion's right  to  exist.  In  the  first  place,  such  attacks  are  rarely 
made  except  in  an  attempt  to  defeat  the  ends  of  justice,  by 
setting  up  defences  to  actions  brought  against  debtors  by  cor- 
porations, in  which  the  parties  interposing  the  same  have  generally 
no  direct  interest  whatever.  If  the  State  legislatures  had  not  by 
legislation,  and  the  courts  by  an  extended  application  of  the  doc- 
trine of  estoppel,  forbidden  such  collateral  inquiry  into  these 
matters,  it  would  have  been  impossible  in  a  great  number  of  cases 
for  litigants  to  enforce  their  just  rights  in  courts  of  law.  If  such 
a  right  were  admitted  in  one  case,  it  must  be  in  all.  Corpora- 
tions might  thus  be  called  upon  years  after  their  creation  to  es- 
tablish the  validity  of  corporate  existence,  purposes,  and  powers, 
which  public  policy  should  hold  to  be  valid  as  against  all  parties 
except  the  State.1 

Having  already  observed  that  the  question  of  the  right  to  col- 
laterally attack  corporate  existence,  purposes,  and  powers  h;is 
become  largely  an  academic  one,  it  will   now  be  proper  to  sub- 

1  Duggan    v.   Conipauy,  11    Col.  113;  17  I'ac.  105. 

21 


§  6     INCORPORATION   AND    ORGANIZATION   OF    CORPORATIONS.      [PART  I. 

stantiate  this  statement.  That  the  discussion  of  this  question 
may  proceed  along  logical  lines,  attention  is  first  called  to  the 
alleged  right  to  collaterally  attack  the  validity  of  corporate 
existence. 

In  twenty-six  of  the  States  and  Territories  collateral  inquiry 
into  the  legality  of  corporate  existence  is  expressly  forbidden  by 
statute,  the  right  to  impeach  such  existence  being  expressly  re- 
served to  the  State  alone  by  means  of  direct  proceedings  brought 
for  that  purpose.1  Thus,  in  California  it  is  provided  that  where 
a  corporation  claims  in  good  faith  to  be  a  corporation  and  doing 
business  as  such,  its  right  to  exercise  corporate  powers  shall  not 
be  inquired  into  collaterally  in  any  private  suit  to  which  such 
de  facto  corporation  may  be  a  party. 

In  Delaware  the  law  provides  "  that  no  corporation  shall  be 
permitted  to  set  up  or  rely  upon  the  want  of  legal  organization  as 
a  defence  in  any  action  against  it,  nor  shall  any  person  transact- 
ing business  with  such  corporation,  or  sued  for  injury  to  its  prop- 
erty be  permitted  to  rely  upon  such  want  of  legal  organization  as 
a  defence."  In  Georgia  the  law  provides  that  the  existence  of  a 
corporation  claiming  a  charter,  under  the  color  of  law,  cannot  be 
collaterally  attacked,  and  that  all  who  dealt  with  the  corporation 
as  such  are  estopped  from  denying  its  corporate  existence.  In 
Iowa,  Kentucky,  and  Nebraska  statutes  exist  essentially  the  same 
as  that  in  force  in  Delaware  as  cited  above.  In  Nebraska  the  law 
provides  that  evidence  that  the  corporation  is  doing  business 
under  a  certain  name  shall  be  prima  facie  proof  of  its  due  incor- 
poration or  existence  pursuant  to  law. 

In  Montana  collateral  inquiry  into  corporate  existence  is  ex- 
pressly forbidden,  until  the  fact  that  there  was  in  fact  no  such  cor- 
poration has  been  adjudged  in  a  direct  proceeding  brought  for 
that  purpose.  In  South  Carolina,  it  is  provided  that  no  irregu- 
larity shall  be  held  to  vitiate  the  corporation  until  a  direct  pro- 
ceeding to  set  aside  or  annul  the  charter  be  commenced  by  the 
proper  authorities  of  the  State,  and  all  acts  and  contracts  entered 
into  shall  have  the  same  force  and  effect  as  if  no  irregularity  existed. 

In  South  Dakota,  North  Dakota,  and  Oklahoma  the  law  provides 
that  the  due  incorporation  of  any  company  claiming  in  good  faith 
to  be  a  corporation  and  doing  business  as  such,  its  right  to  exer- 

i  See  Boyce  v.  Church,  46  Md.  359 ;  W.  &  M.  W.  R.  Co.  v.  Supervisors,  64  Cal. 
69 ;  28  Pac  496. 

22 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  6 

cise  corporate  powers  shall  not  be  inquired  into  collaterally.  In 
Tennessee  the  law  provides  that  the  validity  of  corporate  existence 
shall  not  be  collaterally  questioned.  Persons  acting  as  a  corpora- 
tion, the  law  says,  will  be  presumed  to  be  legally  incorporated  un- 
til the  contrary  is  shown,  and  no  such  franchise  shall  be  declared 
annulled  or  forfeited  except  in  a  regular  proceeding  brought  for 
that  purpose.  In  Texas  no  person  who  shall  have  assumed  an 
obligation  to  an  ostensible  corporation  as  such  shall  resist  the 
enforcement  of  such  obligation  on  the  ground  that  there  was  no 
such  corporation  until  that  fact  has  been  adjudged  in  a  direct 
proceeding  for  that  purpose. 

In  Arizona  persons  acting  as  a  corporation  under  the  provisions 
of  the  incorporation  act  in  force  in  that  Territory  are  by  law  pre- 
sumed to  be  legally  organized  until  the  contrary  is  shown,  and  no 
franchise  can  be  declared  to  be  annulled  or  forfeited  except  in  reg- 
ular proceedings  brought  for  that  purpose.  The  law  also  provides 
that  no  persons  acting  as  a  corporation  under  such  act  shall  be  per- 
mitted to  set  up  or  rely  upon  the  want  of  legal  organization  as  a 
defence  to  any  action  brought  against  them  as  a  corporation,  nor 
shall  any  person  who  shall  be  sued  under  a  contract  made  with 
such  corporation  sue  for  an  injury  done  to  its  property  or  for  a 
wrong  done  to  its  interest  be  permitted  to  rely  upon  such  want  of 
legal  organization  in  his  defence. 

Finally,  in  Mississippi  it  is  provided  that  it  shall  not  be  a  defence 
in  any  action  against  a  corporation  that  there  was  a  defect  or  in- 
formality in  its  organization. 

Again  in  twenty-nine  of  the  States  authority  is  given  to  State 
officials  to  issue  certificates  of  due  incorporation.  Of  this  number 
fourteen  are  not  included  in  the  list  of  States  forbidding  collateral 
attacks  upon  corporate  existence.  In  such  States  it  is  safe  to  say 
that  the  issue  of  such  a  certificate  is  in  itself  a  final  adjudication 
against  all  parties  except  the  State  that  a  corporation  has  a  legal 
existence  to  the  extent  that  it  cannot  be  collaterally  attacked  by 
third  parties.  Particularly  where  it  is  organized  by  the  voluntary 
action  of  the  requisite  number  of  incorporators  with  the  approval 
and  consent  of  an  officer  of  the  State  possessing  authority  in  the 
premises,  under  an  enabling  statute  permitting  corporations  of 
that  particular  description  to  be  organized  thereunder.1 

1  O'Brien    v.  Curnmin^s,    IS   Mo.  Ap. 
197  ;  Boyce  v.  Church,  4G  Aid.  359. 

23 


8  6    INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS.     [PART  I. 

The  theory  upon  which  the  rule  here  stated  is  based  seems  to  be 
that  State  officials  in  issuing  a  certificate  of  due  incorporation  act 
under  a  general  statute  passed  by  the  legislature,  and  under  the 
terms  thereof  become  agents  as  it  were  thereof  for  that  purpose. 
It  therefore  follows  that  the  act  of  such  State  officials  in  certify- 
ing as  to  due  incorporation,  is  in  effect  the  act  of  the  legislature 
which  has  the  supreme  power  of  creating  corporations.  So  it 
may  be  safely  said  that,  according  to  the  best  current  of  authority, 
where  the  statute  gives  the  State  official  authority  to  issue  a  cer- 
tificate of  due  incorporation,  such  certificate  is  evidence  thereof 
against  all  the  world  except  the  State.1 

Again  it  should  be  noted  that  in  manv  of  the  States  the  statute 
itself  gives  certain  probative  force  to  the  charter  so  issued,  by  provid- 
ing that  the  certificate  of  incorporation,  or  a  certified  copy  thereof, 
shall  be  evidence  to  a  certain  designated  extent  and  for  certain 
purposes.  Thus  in  Connecticut,  Kansas,  Minnesota,  North  Dakota, 
and  Ohio  statutes  exist  providing  that  a  certified  copy  of  the  cer- 
tificate of  incorporation  shall  be  prima  facie  evidence  of  the  legal 
existence  of  the  corporation.  In  Colorado,  Oklahoma,  Oregon, 
Texas,  West  Virginia,  and  Wyoming  statutes  provide  that  such  cer- 
tificate shall  be  evidence  of  the  existence  of  the  company.  In  Cal- 
ifornia, Colorado,  Idaho,  Illinois,  Louisiana,  Montana,  Nevada, 
North  Dakota,  South  Dakota,  Oklahoma,  Utah,  Washington,  and 
Wyoming  such  a  certificate  is  prima  facie  evidence  of  the  facts 
therein  stated.  In  New  York  the  certificate  of  incorporation  of  any 
corporation  when  duly  filed  is  presumptive  evidence  of  its  incor- 
poration. In  Arkansas  a  certified  copy  of  the  articles  is  made 
prima  facie  evidence  of  the  due  formation  and  of  the  existence 
and  capacity  of  the  corporation.     In  Colorado  it  is  made  evidence 

l  Petty  v.  Hayden,  115  Iowa,  212;  88  Jones  v.  Dana,  24  Barb.  395;  Taylor  v. 

N.  W.  339 ;  Cochran  v.  Arnold,  58  Pa.  St.  Company,  91  Me.  193 ;  39  Atl.  560  ;  Finch 

399  ;  Litchfield  Bank  v.  Church,  29  Conn.  v.    Ullman,    105    Mo.   255 ;    Saunders   v. 

137;   Napier   v.  Poe,   12  Ga.  170;   Caro-  Farmer.  62  N.  H.  572  ;  Union  Water  Co.  v. 

lina  Iron  Co.  v.  Abernathey,  94 N.  C.  545;  Kean,  52  N.  J.  Eq.  Ill ;    27  Atl.    1015  ; 

Casey  v.  Galli,  94  U.  S.  673;  24  L.  E.  168,  U.  S.  Vinegar  Co.  v.  Schlegel,  143  N.  Y. 

307 ;  Lake  Sup.  Nav.  Co.  v.  Morrison,  22  537  ;   38  N.   E.   729 ;    W.    &  P.  Ry.  Co. 

U.  C.  C.  P.  217;    Birds    Case,  1   Simon  v.   Company,  114   N.    C.  690;    19    S.  E. 

(n.  s.),  47 ;  40  Eng.  Ch.  47  ;  In  re  Barneds  646  ;  Carroll   v.  Bank,  19  Wash.  639  ;  54 

Bakery  Co.,  L.  R.  2  Ch.  674 ;  O'Brien  v.  Pac.  32 ;  Vermont,  etc.  Ry.  Co.  v.  Com- 

Cummings,  13  Mo.  Ap.  197;  N.  P.  C.I.  pany,  34  Vt.  2;  Grubb  v.  Company,   14 

Co.  v.  Company,   16  Utah,  246;  52  Pac.  Pa.  St.  305;  W.  P.  R.  Co.  v.  Young,  12 

168;    Holman  v.  State,   105  Ind.  569;   5  Md.  476. 
N.  E.  702 ;  State  v.  Carr,  5  N.   H.  367 ; 

24: 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  6 

of  the  existence  of  the  corporation.  In  Connecticut  it  is  evidence 
of  the  legal  existence  of  the  corporation,  and  it  is  there  provided 
that  it  shall  serve  all  the  purposes  of  a  charter  for  the  corporation. 
In  Delaware  it  is  made  evidence  in  any  court  of  law  or  equity. 
In  Georgia  a  certified  copy  of  the  petition  for  incorporation  and 
order  granting  the  same  is  made  evidence  of  such  incorporation 
in  any  court.  In  Kentucky  the  law  provides  that  it  may  be  used 
as  evidence  in  any  action  for  or  against  the  corporation.  In 
Maryland  it  may  be  used  as  evidence  in  all  legal  proceedings.  In 
Michigan  it  is  prima  facie  evidence  of  the  due  formation,  exist- 
ence, and  capacity  of  such  corporation.  In  Minnesota  it  is  pro- 
vided that  it  shall  be  evidence  in  all  courts  of  such  incorporation. 
In  New  Jersey  it  is  evidence  in  all  courts  and  places.  In  North 
Carolina  it  is  prima  facie  evidence  of  the  organization  and  incor- 
poration of  the  company  purporting  thereby  to  have  been  estab- 
lished. In  Pennsylvania  it  is  evidence  for  all  purposes.  In  Rhode 
Island  a  certificate  must  be  received  in  evidence  before  any  court, 
tribunal,  or  authority.  In  Tennessee  it  is  competent  evidence  in 
any  proceeding.  In  "West  Virginia  it  shall  be  received  as  evidence 
of  the  existence  of  the  corporation.  In  Wyoming  it  is  provided 
that  it  shall  be  evidence  of  the  existence  of  the  company. 

Again,  in  Massachusetts  and  Indiana  the  law  provides  that  the 
certificate  of  record  shall  be  conclusive  evidence  of  the  existence  of 
such  corporation.  In  Wisconsin  it  must  be  received  as  conclusive 
evidence  of  the  existence  of  the  corporation  or  of  the  organization 
thereof  in  all  cases  where  such  facts  are  collaterally  involved. 

Again,  in  Alabama  the  certificate  of  the  probate  judge  states 
specifically  that  the  incorporators  are  duly  organized  as  a  corpora- 
tion for  the  purposes  expressed  in  the  declaration,  having  the 
power,  capacity,  and  authority  conferred  by  law.  In  Florida  the 
law  provides  that  "  letters  patent "  shall  be  conclusive  evidence  of 
the  existence  of  the  corporation  in  all  actions  where  the  question 
of  the  existence  is  only  collaterally  involved,  and  prima  facie  evi- 
dence in  all  other  actions  and  proceedings.  In  Indiana  the  order 
of  the  court  declaring  the  existence  of  a  corporation  entered  "  ex 
parte  "  is  conclusive  as  to  the  fact  of  such  existence.  In  Missis- 
sippi the  law  provides  that  the  powers  specified  in  the  charter 
shall  by  the  approval  of  the  Governor  be  vested  in  such  corpora- 
tion, and  it  shall  go  into  operation  at  the  time  and  on  the  terms 
and  conditions  specified. 


§  6     INCORPORATION    AND   ORGANIZATION   OP   CORPORATIONS.     [PART  I. 

Again,  certain  statutes  exist  providing  that  after  certain  pre- 
liminary steps  have  been  taken  as  prescribed  by  statute  such 
incorporators  and  their  successors  and  assigns  shall  thereupon 
become  a  body  politic  and  corporate  for  certain  specified  purposes. 
These  statutes  really  provide  that  upon  the  observance  of  certain 
specified  preliminary  conditions  relative  to  the  making  and  execu- 
tion of  articles  of  incorporation,  the  incorporators,  their  suc- 
cessors and  assigns,  shall  be  a  body  politic  and  corporate  under  the 
name  and  for  the  purposes  stated  in  the  articles.  The  foregoing  is 
the  statutory  provision  as  it  exists  to-day  in  substance  in  South  Da- 
kota, North  Dakota,  and  Oklahoma.  In  Virginia  the  law  provides 
that  they  shall  be  a  body  politic  and  corporate  by  the  name  set 
forth  in  the  said  certificate  and  upon  the  terms  and  powers  set  forth 
therein,  so  far  as  not  in  conflict  with  law.  In  Pennsylvania  the 
law  provides  that  they  shall  become  a  corporation  upon  the  pur- 
poses and  terms  named  in  the  charter.  In  Maryland  they  are 
declared  to  thereby  become  a  body  politic  and  corporate  according 
to  the  objects,  purposes,  articles,  conditions,  and  provisions  in  said 
instrument  contained.  In  Maine  they  are  declared  to  be  a  corpo- 
ration, with  all  the  rights  and  powers  and  subject  to  all  the  duties, 
obligations,  and  liabilities  provided  by  law. 

In  Connecticut  a  copy  of  the  certificate  of  organization  is  prima 
facie  evidence  that  the  corporation  has  been  duly  organized  and 
is  duly  authorized  to  exercise  all  its  corporate  powers.  In  Maine 
the  certificate  of  the  Secretary  of  State  that  the  corporation  has 
been  duly  organized  is  evidence  of  the  corporate  existence  of  the 
corporation.  In  South  Carolina  a  certificate  is  issued  by  the  Sec- 
retary of  State  that  the  corporation  is  fully  authorized  to  com- 
mence business  under  its  charter  for  the  purposes  indicated  in 
the  written  declaration  of  the  incorporators. 

It  is  not  claimed  that  the  statutory  provisions  here  referred  to 
operate  so  as  to  preclude  entirely  collateral  attack  upon  corpo- 
rate existence,  purposes,  and  powers.  The  most  that  is  claimed 
for  them  where  they  do  not  make  certain  instruments  conclusive 
evidence  of  corporate  existence,  purposes,  and  powers,  is  that  they 
shift  the  burden  of  proof  and  render  the  likelihood  of  collateral 
attack  more  remote.1 

1  As  to  meaning  of  conclusive  evidence,  of  prima  facie  evidence,  see  Holmes  v.  Gil- 
see  American  Order,  etc.  v.  Merritt,  151  liland,  41  Barb.  (N.  Y.)  569;  Knapp,  etc. 
Mass.  558;  24  N.  E.  918.     As  to  meaning     Co.  v.  Strand,  4  Wash.  686;  30  Pac.  1063; 

26 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  G 

It  has  now  been  fairly  demonstrated,  it  is  hoped,  that  in  the 
majority  of  the  Commonwealths  collateral  inquiry  into  corporate 
existence  is  either  prohibited  by  statute  or  else  is  forbidden  by 
implication,  by  reason  of  the  issuance  of  certificates  of  due  in- 
corporation, under  proper  legislative  authority,  by  State  officials. 
In  the  few  remaining  States  and  Territories  the  courts  have  either 
by  a  process  of  judicial  legislation  or  by  an  extended  application 
of  the  principle  of  estoppel,  practically  made  it  impossible  to 
successfully  attack  in  collateral  proceedings  the  due  existence 
of  a  corporation.     This  on  grounds  of  enlightened  public  policy.1 

The  judicial  legislation  above  referred  to  covers  the  cases  where 
it  is  impossible  to  apply  principles  of  estoppel  either  on  account 
of  the  absence  of  any  conduct  on  the  part  of  parties  litigant  show- 
ing their  recognition  of  the  corporation's  existence,  or  else  is 
inapplicable  by  reason  of  such  parties  having  never  in  any  way 
dealt  with  the  corporation  or  recognized  its  corporate  existence.2 

Having  now  considered  at  some  length  the  question  as  to  the 
right  to  collaterally  attack  the  validity  of  corporate  existence, 
there  naturally  follows  an  inquiry  as  to  the  right  to  attack  the 
validity  of  corporate  purposes  and  powers  when  the  same  are  in- 
serted in  the  articles  of  incorporation.  It  would  seem  to  follow, 
as  a  logical  sequence,  that  if  the  rule  be  once  established  forbid- 
ding collateral  attack  upon  corporate  existence,  this  same  rule 
should  operate  as  well  to  prevent  collateral  attack  upon  corporate 
purposes  and  powers.  This  for  the  reason  that  if  a  corporation 
exists  at  all  it  must  necessarily  exist  with  such  purposes  and 
powers  as  are  inserted  in  the  articles  of  incorporation  which 
called  the  corporation  into  being. 

As  has  already  been  observed,  a  large  number  of  the  States  have 
enacted  statutes  forbidding  collateral  attack  upon  corporate  exist- 
ence. For  the  reasons  already  stated,  it  would  appear  that  these 
statutes  would  he  equally  efficacious  for  the  purpose  of  prohibiting 
collateral  attack  upon  corporate  purposes  and  powers. 

Eastern  Plank  Road  Co.  v.  Vaughan,  14  863;    Saunders  v.  Farmer,  f>2  N.  II.  572; 

N.  Y.  546;  Hates  v   Wilson,  14  Col.  140;  Hackeusack  Water  Co. v.  DeKay,  86  N.  J. 

24  Pac.  99;  Wool  v.  Company,  56  Conn.  Eq.  548;  U.   S.  Vinegar  Co.  v.  Schlegel, 

87;  13  Atl.  137;  Jewell  v.  Company,  101  143  N.  Y.  537;  38  N.    B.  729;   W.   S    P 

111.57.  Kv.  Co.  v.  Company,  114   N.  C.  690;  19 

1  See  Case v  v.  Galli,  94  U.  S.  673  ;  Dug-  S.  E.  646  ;  Reynolds  v.  Myers,  51  Vt.  144; 

gan    v.  Company,   n   CoL   118;  17  Pac.  Carroll  v  Bank,  19  Wash.  689  J  54  Pac  82. 
105   ;  McClinch   V.   Sturgis,   72    Me.  288;         a  See  Marion  Savings  Hank  v.  Dunkin, 

Finch  v.  Ullman,  105   Mo.  255;  16  S.  W.  54  Ala.  471. 

27 


§  7     INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS.     [PART  I. 

Again,  as  has  already  been  stated,  a  large  number  of  the  in- 
corporation acts  provide  that  the  certificate  of  incorporation  shall 
be  issued  by  certain  designated  State  officials.  Where  such  cer- 
tificates are  issued  under  express  or  even  implied  authority  of  the 
State,  the  rule  unquestionably  is  that  the  validity  of  corporate 
purposes  and  powers  not  per  se  illegal,  inserted  in  the  articles  of 
incorporation,  cannot  be  attacked  except  by  the  State  in  a  direct 
proceeding  brought  for  that  purpose.1 

If,  however,  the  charter  is  issued  without  the  express  or  im- 
plied approval  of  the  State  officials,  —  their  duty  being  merely  to 
certify  to  the  fact  and  to  mark  them  when  filed  as  public  documents 
in  their  respective  offices,  —  then  the  insertion  of  purposes  not 
authorized  by  the  statute,  yet  not  unlawful  per  se,  would  probably 
not  render  the  charter  valid  for  all  purposes  even  when  filed.2 

To  sum  up  briefly  the  propositions  herein  presented,  it  may  be 
said  that  collateral  inquiry  into  the  legality  of  a  corporation's  ex- 
istence, purposes,  and  powers  is  forbidden  in  this  country,  (1)  by 
statutes  expressly  forbidding  such  collateral  attack ;  (2)  by 
reason  of  authority  vested  in  state  officials  to  issue  certificates  of 
due  incorporation  which  for  the  reasons  already  stated  are  not 
open  to  collateral  attack ;  (3)  by  reason  of  statutory  provi- 
sions giving  to  certified  copies  of  articles  of  incorporation  certain 
probative  effect ;  (4)  by  an  extended  application  of  the  principle 
of  estoppel  forbidding  such  collateral  attacks ;  (5)  by  a  process 
of  judicial  legislation  denying  on  grounds  of  public  policy  the  right 
of  parties  other  than  the  State  to  attack  the  legality  of  corporate 
existence,  purposes,  and  powers. 

§  7.  Effect  of  Inserting  Illegal  Purposes.  —  There  seems  to  be  a 
sound  basis  in  law  for  permitting  collateral  attack  upon  purposes 
that  are  illegal  per  se.  This  for  the  reason  that  a  distinction 
clearly  exists  between  purposes  which  are  merely  unauthorized 

i  State  ex  rel.  Walker  v.  Talbot,  123  Mo.  399  ;  Casey  v.  Galli,  94  U.  S.  673 ;  Fortier 

69;  27  S.  W.  366;  Doty  v.  Patterson,  155  v.   Bank,   112  U.  S.  439;  5  S.   Ct.  234 

Ind.  60;  56  N.  E.  668;  T.  A.  L.   Co.  v.  Niemeyer  v.  L.  R.  J.  Ry.,  43  Ark.   Ill 
Massey  (Tenn.),  56  S.  W.  35 ;  Allbright        2  Williams    v.   Company,  25  Ind.    Ap 

v.  Association,  102  Pa.  St.  411.     See  also  351 ;  57  N.  E.  581  ;    Kinston,  etc.   Co.  v 

People  v.  Beach,  19  Hun,  259  ;  N.  Orleans,  Stroud,  132  N.  C.  413  ;  43  S.  E.  913  ;  Ram 

etc.  R.  R.  Co.  v.  Frank,  39  La.  An.  707  ;  sey  v.  Tod,  95  Tex.  614  ;  69  S.  W.  133 ;  Or 

2  So.  310;  Holmes  v.  Gilliland,  41  Barb.  Ry.  &  Nav.  Co.  v.  Or.  Ry.  Co.,  130  U.  S 

N.  Y.  569;   Eastern  Plank  Road    Co.  v.  1 ;  9  S.  Ct.  409;  State  v.  Company,  88  Wis. 

Vaughan,  14  N.  Y.  546;   C.  &  P.  Co.  v.  512 ;    60  N.  W.  796  ;  G.  L.  H.  Ins.  Co.  u. 

Secretary  of  State,   128   Mich.    621;  87  Kamper,  73  Ala.  325. 
N.  W.  901 ;  Cochran  v.  Arnold,  58  Pa.  St. 

28 


CHAP.  I.]  DRAFTING  THE  CHARTER.  §  8 

by  the  terms  of  the  general  incorporation  act,  and  those  purposes 
which  are  forbidden  by  express  statute, —  civil  or  penal.  In  the 
latter  case  it  seems  clear  that  even  the  approval  by  a  State  official 
of  such  unlawful  purposes  as  evidenced  by  the  issuance  by  them 
of  certificates  of  due  incorporation,  do  not  forbid  collateral  attack 
thereon  in  any  suit  whereby  the  corporation  seeks  to  benefit  by 
the  insertion  of  such  unlawful  purposes  in  its  articles.1 

The  rule  might  be  still  further  extended  so  as  to  apply  to  pur- 
poses which  may  be  lawful  in  a  general  way,  yet  which  may  be 
deemed  unlawful  on  account  of  the  limitations  inserted  in  the 
articles  upon  the  means  by  which  such  purposes  are  to  be  carried 
out.2  The  same  principle  would  apply  where  the  purposes  are 
clearly  contrary  to  the  public  policy  of  the  State.3  But  if  pur- 
poses are  lawful  on  their  face,  they  will,  as  against  all  but  the 
State,  be  presumed  to  be  such.4  Where  some  of  the  purposes  are 
merely  unauthorized,  while  others  are  valid  and  proper,  the 
insertion  of  the  unauthorized  purposes  will  not  vitiate  the  incorpo- 
ration.5 But  where  any  of  the  purposes  are  illegal  per  se,  the  State 
officials  would  be  clearly  justified  in  refusing  to  allow  the  articles 
to  be  filed,  though  some  of  them  are  lawful.6 

§  8.  Corporate  Powers,  Classification  of.  —  By  "  corporate 
powers  "  is  meant  the  right  or  authority  of  a  corporation  to  act 
along  certain  lines  prescribed  for  it  in  the  instrument  whereby  it 
was  created.  The  tendency  of  modern  decisions  is  to  assimilate 
the  powers  of  private  corporations  to  those  of  individuals  and 
copartnerships."  It  is  unnecessary  to  say  that  a  corporation  can- 
not assume  for  itself  powers  of  action,  irrespective  of  statute,  by 
the  mere  declaration  thereof  in  its  articles  of  incorporation.8 
Neither  can  they  be  created  by  by-law.9 

The  Supreme  Court  of  the  United  States  10  has  observed  that 

1  F.  N.  Bank  v.  Company,  59  Ohio  St.  4  U.  S.  Vinigar  Co.  v.  Foehrenk-uh, 
316  ;    52    N.  E.    834  ;     In  re    DuQuesne     148  N.  Y.  58;  42  N.  E.  403. 

College,  2   Pa.   Dint.  Ct.  Rep.  555;  Mat-  5  Skick  v.  Company,  15  Iud.  Ap.  310; 

ter  of  Agudath  Hakehiloth,  18  N.  Y.  Mis.  44  N.  E.  48. 

Rep.  717;    42   N.   Y.  Sup.  985;    State  v.  6  State  v.  Company,  88  Wis.  512  ;  60 

Company,  29  Neb.  700;  46  N.  W.  155.  N.  \V.  796. 

2  Or.  Ry.  &  Nav.  Co.  v.  Or.   Ry.    Co.,  7  Fink  v.  Company,  5  Ore.  301 . 

130  U.  S.  1  ;  9  S.  Ct.  409.  8  People  v.  Green,  1 16  Mich.  505  ;    74 

8  Scheutzen  Bund  v.  Agitations  Verein,  N.  W.  714. 

44  Mich.  313  ;  6  N.  VV.  675  ;    McGrew  v.  9  Andrews  v.  Company,  37  Me.  256. 

C.  P.  Ex.,  85  Tenu.  572  ;  4  S.  W.  38;  In  10  Thomas  v.  Company,  101  U.  S.  71. 
re  Benefit  Society,  10  Phil.   19;   People  v. 
Company,  130  111'.  268;  22  N.  E.  798. 

29 


§  9     INCORPORATION    AND    ORGANIZATION   OF    CORPORATIONS.     [PART  I. 

"  we  take  the  general  doctrine  to  be  that  the  powers  of  corpora- 
tions organized  under  general  statutes  are  such  and  such  only  as 
are  conferred  by  statute.  Conceding  the  rule  applicable  to  all 
statutes,  that  what  is  fairly  implied  is  as  much  granted  as  what 
is  expressed,  it  remains  that  the  charter  of  the  corporation  is 
the  measure  of  its  powers,  and  that  the  enumeration  of  these 
powers  implies  the  exclusion  of  all  others." 

The  foregoing  is  true  only  as  to  certain  classes  of  powers  which 
are  hereinafter  referred  to  as  "  express  powers."  The  rule  is  not 
applicable  either  to  what  are  known  as  "  common  law  papers  "  or 
to  the  "  incidental  powers  "  of  corporations.  Corporate  powers 
may  properly  be  divided  into  three  general  classes,  to  wit : 
(1)  Common  Law  Powers ;  (2)  Express  Powers ;  (3)  Incidental 
Powers.  Generally  speaking,  there  is  no  existing  rule  or  prin- 
ciple by  which  corporations  created  for  a  certain  specific  object 
or  to  carry  on  a  particular  trade  or  business  are  to  be  held  to  be 
prohibited  from  all  other  dealings  or  transactions  not  coming 
within  the  exact  scope  of  those  designated.  Undoubtedly  the  main 
business  of  a  corporation  is  to  be  confined  to  that  class  of  opera- 
tions which  properly  appertains  to  the  general  purposes  for  which 
this  charter  was  granted.  But  it  may  also  enter  into  contracts 
and  engage  in  transactions  which  are  incidental  or  auxiliary  to  the 
main  business,  or  which  may  become  necessary  or  profitable  in 
the  care  and  management  of  the  property  which  it  is  authorized 
to  hold.  The  same  is  true  as  to  certain  powers  which  are  held 
to  exist  at  common  law  even  in  the  absence  of  any  specific  refer- 
ence to  such  powers  in  the  articles  of  incorporation. 

§  9.  Common  Law  Powers,  Definition  of ;  Enumeration  of.  — 
Common  law  powers  are  those  which  the  law  bestows  upon  cor- 
porations irrespective  of  statute  or  charter  provisions,  as  being 
necessary  for  the  carrying  out  of  the  purposes  for  which  it  was 
created.1  The  common  law  gives  to  corporations  the  powers 
belonging  to  corporations  of  their  class,  unless  there  is  some- 
thing in  the  nature  of  the  corporation  or  in  the  terms  of  its 
charter,  or  in  the  act  under  which  it  was  incorporated  inconsis- 
tent with  the  exercise  of  the  powers,  or  there  is  some  general 
statute  restricting  the  same.2 

1  Falconer  v.  Campbell,  8  Fed.   Cases,  593;  Knowlesv.Beatty,  1  McLean, 41;  Leg- 

4620;  2  McLean,  195;  C.  0.  N.  G.  &  F.  gett  v.  N.  J.  M.,  etc.  Co.,  1  N.  J.  Eq.  541. 
Co.  v.  C.  D.  Co.,  60  Ohio,  96;  53  N.  E.  711 ;  2  Smith   v.   Company,   27    N.    H.    86; 

State  v.  Companv,  144  Mo.  562  ;  46  S.  W.  Sutton's  Hospital  Cases,  5  Coke's  Rep.  253. 

30 


CHAP.  I.J  DRAFTING    THE    CHARTER.  §  11 

The  common  law  powers  here  referred  to  may  be  enumerated 
as  follows :  (1)  the  right  to  the  use  of  a  corporate  name  ; 
(2)  the  right  to  perpetual  succession ;  (3)  the  right  to  acquire, 
hold,  and  dispose  of  corporate  property  ;  (4)  the  right  to  appoint 
corporate  officers  and  agents;  (5)  the  right  to  establish  by-laws 
for  the  government  of  the  corporation,  its  officers  and  members ; 
(6)  the  right  to  sue  and  be  sued. 

An  examination  of  the  various  corporate  acts  in  force  in  the 
several  States  and  Territories  will  serve  to  show  that  without 
exception  they  contain  an  enumeration  more  or  less  full  of  the 
common  law  powers  above  referred  to.  In  Indiana  the  statute 
refers  to  them  as  common  law  powers,  and  proceeds  to  enumerate 
them.1 

§  10.  Right  to  a  Corporate  Name.  —  The  right  to  the  use  of  a 
corporate  name  is  a  power  well  recognized  both  at  common  law 
and  by  statute.  Corporations  have  a  property  right  to  the  use  of 
such  name  in  the  transaction  of  their  business  which  the  courts 
will  always  protect.2  They  are  recognized  in  law  only  by  their 
corporate  name.3 

The  name  is  said  "  to  be  the  very  being  of  their  constitution  ; 
the  knot  of  their  combination  ;  without  which  they  could  not  do 
their  corporate  acts  ;  for  it  is  unable  to  implead  and  be  impleaded, 
to  take  any  action  until  it  hath  gotten  a  name."  4 

The  action  of  State  officials  in  granting  the  use  of  a  name,  it 
may  be  observed,  is  not  conclusive,  for  courts  of  equity  will  never- 
theless protect  corporations  in  the  use  of  their  name.5  State 
officials  have,  however,  the  power  to  protect  the  use  of  corpo- 
rate names  when  applications  are  made  for  charters,  even  when 
the  proposed  name  is  not  exactly  similar  to  that  of  existing 
corporations.6 

The  right  to  have  a  corporate  name  is  in  itself  a  common  law 
power  ;  but  it  is  one  which  is  not  alienable." 

§  11.    Right  of  Perpetual  Succession.  — The  "  right  of   perpetual 

succession "  under  a  designated   corporate    name  is  one  of   the 
common  law  powers  of  a  corporation.      The   words  "  perpetual 

1  Ind.  Session  Laws,  1901,  ch.  127,  §  28.  c  State  ex  rel.  v.  McGratli,  92  M<>.  :;."> .".  ; 

2  L.  D.  Co.  v.   Massachusetts,  10  Wall.     5  S.  W.  29. 

(U.  S.)  566;  see  also  ante,  §  3.  1  State  v.   Company,  40  Kan.   96;    19 

8  Curtiss  v.  Murry,  26  Cal.  633.  Pac.  349  ;  Detroit  Citizens'  Street  Kv.  Co. 

4  Smith  v.  Company,  SO  Ala.  650.  v.   Common  Council,   125   Mich.   i>7.'> :   85 

6  Grand    Lodge,  etc.    v.   Graham,  96     N.  W.  96. 

la.  592;  65  N.  W.  837. 

:;i 


§  13    INCORPORATION    AND   ORGANIZATION    OF   CORPORATIONS.    [PART  L 

succession  "  do  not  refer  to  the  duration  of  the  life  of  the  corpora- 
tion, where  this  is  specifically  limited  either  by  statute  or  by  the 
articles  of  incorporation,  but  merely  operates  to  grant  the  continu- 
ation of  corporate  life  during  the  period  so  prescribed.1  Perpetual 
succession  ordinarily  merely  conveys  the  right  of  continued  un- 
broken succession  for  the  period  of  time  limited  for  the  corporate 
existence.2 

§  12.  Right  to  adopt  and  use  a  Corporate  Seal.  —  It  is  an  in- 
separable incident  to  every  corporation  that  it  may  have  a  common 
seal,  and  make,  alter,  and  renew  the  same  at  pleasure.3  The  doc- 
trine of  the  common  law  requiring  the  use  of  a  corporate  seal  in 
the  execution  of  corporate  contracts  is  practically  obsolete,  and 
the  seal  is  now  required,  in  the  absence  of  express  statute,  only 
when  it  would  be  required  of  a  natural  person  under  similar 
circumstances.4  Ordinarily  the  exercise  of  this  power  is  dele- 
gated by  the  stockholders  to  the  directors  by  means  of  an 
appropriate  by-law.5 

§  13.  Power  to  acquire,  hold,  and  dispose  of  Real  and  Personal 
Property.  —  No  doctrine  of  the  common  law  is  more  clearly  and 
undeniably  established  than  that  which  concedes  to  corporations 
an  inherent  right  to  acquire  and  hold  title  to  real  and  personal 
property,  except  so  far  only  as  they  may  be  restricted  by  the 
objects  of  their  creation  or  the  limitations  of  their  charter. ti  The 
power  to  acquire  such  property,  when  not  restricted  by  statute,  is 
only  limited  by  the  rule  that  it  must  be  such  as  is  reasonably 
necessary  or  convenient  to  enable  it  to  accomplish  the  purposes 
for  which  it  was  created.7 

Formerly  the  amount  of  real  property  which  a  corporation 
might  purchase  and  hold  was  very  generally  limited  by  statute  in 
most  of  the  Commonwealths.  The  existence  of  such  statutes  may 
be  traced  to  the  policy  of  the  common  law  and  to  the  existence  in 
England  of  statutes  known  as  statutes  of  mortmain,  which  pro- 
hibited corporations  from  taking  and  holding  real  estate  without 
licenses  from  the  king  or  Parliament.8     However,  in  most  of  the 

1  State  v.  Payne,  129  Mo.  468 ;  31  S.  W.  «  Green  Co.  v.  Blodgett,  55  111.  Ap.  556. 
797.  5  Woodman  v.  Company,  50  Me.  549. 

2  Scanlon  v.  Crawshaw,  5  Mo.  Ap.  6  Lathrop  v.  Bank,  8  Dana  (Ky.),  114; 
337  ;  see,  however,  Fairchild  v.  Association,  Thompson  v.  Waters,  25  Mich.  214. 

71  Mo.  526.  »  Brown  t\  Hogg,  14  111.  219  ;  Richard- 

8  Ransom  v.  Bank,   13  N.  J.  Eq.  212  ;     son  v.  Association,  131  Mass.  174. 
Thomas  v.  Dakin,  22  Wend.  9.  8  Leaznre  i>.  Hillegas,  7  Ser.  &  R.  (Pa.) 

32 


CHAP.  I.]  DRAFTING  THE  CHARTER.  §  15 

States  such  restrictions  have  been  done  away  with,  and  corpora- 
tions may  now  hold  such  property,  both  real  and  personal,  as  the 
attainment  of  their  corporate  purposes  may  require.  In  any 
event,  the  general  power  of  a  corporation  to  hold  real  estate  is 
primarily  a  question  bet  wen  the  corporation  and  the  State,  and 
cannot  ordinarily  be  raised  by  third  parties.1  Where  such  statutes 
exist  the  corporation  has  of  course  no  power  to  exceed  the  statu- 
tory limit  as  against  the  State.2 

The  general  rule  is  that  corporations,  unless  forbidden  by  stat- 
ute, have  implied  power  to  take  property  by  devise.3  The  same 
rule  applies  with  respect  to  the  power  of  taking  and  holding 
property  in  trust,  provided  in  so  doing  it  acts  within  its  corporate 
powers.1  The  power  of  a  corporation  to  sell  and  convey  is  as 
broad  as  the  power  to  purchase  and  hold,  and  is  granted  on  the 
same  terms.5 

§  14.  Power  to  appoint  Corporate  Officers  and  Agents. — At 
common  law  corporations  have  the  inherent  power,  irrespective 
of  statute  or  charter  provision,  to  elect  directors  and  executive 
officers  and  to  appoint  such  agents  as  the  business  of  the  corpora- 
tion require.6 

|  15.  Power  to  establish  By-laws.  —  Every  corporation  has  the 
implied  power  to  enact  such  by-laws  as  may  be  necessary  for  the 
proper  government  of  the  corporation,  its  officers,  and  stock- 
holders.7 

Sometimes  the  statutes  prescribe  the  nature  of  the  by-laws  to  be 
adopted  and  authorize  penalties  for  violation  thereof.8 

313;    White  v.  Howard,  38   Conn.  342;  4  Vidal  v.  Girards  Executors.  2   How. 

Page  v.  Heineberg,  40  Vt.   81  ;    Rivanna  (U.  S.)  127;  Morris  v.  May,  16  Ohio,  469; 

Nav.  Co.  v.   Dawsons,  3   Grat.  (Va.)  19;  F.  L.  T.    Co.  v.  II.    F.    N.  Co.,  41    N.    V. 

Moore  v.  Moore,  4  Dana  (Ky.),  354  ;    Mai-  619;  White   v.  Rice,    112   Mich.   403;  70 

lett  v.  Simpson,  94  N.  C.   37;  Trustees)'.  N.  W.  1024;  Greene  /•.    Dennis,   6   Conn. 

Manning,  72  Md.  116  ;   19  Atl.  599;  First  304. 

M.B.   Churchy.  Dixon,    178  111.  260;  52  6  Miners'  Ditch   Co.  v.  Zellerbach,   37 

N.  E.  887.  Cal.  543  ;   People  v.  College,  38  Cal.  1 66. 

1  C.  B.  &  Q.  R.  R.  Co.  v.  Lewis,  53  c  Kearney  v.  Andrews,  10  N.J.  Eq.  70; 
la.   101  ;  4  N.  W.  842.  A.  R.  R.  Co!  v.  Kid. I,  29  Ala.  221. 

2  Market  St.  Ry.  Co.  v.  Hellman,  109  '  Wells  v.  Black,  117  Cal.  L57  ;  48  Pac. 
Cal.  571;  42  Pac.  225;  In  re  McGraw's  1090;  People  v.  Society,  -'4  Bar!..  N.  Y . 
Estate,  111  N.  Y.  66;  Andrews  v.  An-  570;  Martin  v.  Association,  2  Coldw. 
drews,  110  111.  223;  Graves  i».  Niles,  1  (Tenn.)  418;  Mechanics' Bank  t\  Smith,  19 
Walker  (Mich.),  332.  Johns.  (N.  Y.)    115;   Stager   v.  Davis,   8 

8  White   v.    Howard,   38    Conn.   342;     Tex.  Civ.  App.  23 ;   27  S.  W.  1068. 
Ravanna   Nav.  Co.  v.  Dawsons,  3  Grat.         8  Cahill  v.  Company,  2  Dong,  (Mich.) 
(Va.)  19.  128;   Mobile  v.  Yuille,  3  Ala.  187. 

3  33 


§  17    INCORPORATION    AND    ORGANIZATION    OP    CORPORATIONS.    [PART  I, 

§  16.  Power  to  sue  and  be  sued.  —  It  has  been  the  rule  of  the 
courts  from  time  immemorial  to  recognize  and  enforce  the 
power  of  corporations  to  sue  and  be  sued  under  and  by  their  cor- 
porate name  as  incident  to  such  corporate  existence.1 

§  17.  Express  Powers,  Definition  of;  Enumeration  of.  —  Ex- 
press powers  are  those  which  are  either  granted  to  all  corpora- 
tions alike  by  statute,  whether  inserted  in  the  charter  or  not, 
or  else  are  those  which  are  permitted  by  statute  to  such  corpora- 
tions as  may  see  fit  to  take  advantage  of  them,  by  reserving  such 
powers  in  the  charter  itself.  Statutes  of  the  character  first  re- 
ferred to  are  construed  by  the  courts  to  be  ipso  facto  read  into 
the  charter,  thereby  becoming  part  and  parcel  of  it.  On  the  other 
hand,  the  last-named  powers  can  only  be  availed  of  by  the  corpo- 
ration when,  as  has  been  stated,  they  are  specifically  reserved  or  set 
forth  in  the  articles  of  incorporation.  Express  powers  relate  not 
only  to  the  right  to  engage  in  a  special  line  of  business  as  set 
forth  in  the  statement  in  the  articles  of  the  object  or  purposes  for 
which  the  corporation  is  formed,  but  they  relate  as  well  to  other 
powers  which  are  here  termed  "express,"  inasmuch  as  they 
depend  upon  the  existence  of  specific  statutes  authorizing  their 
exercise  by  such  corporations  as  desire  to  avail  themselves 
thereof.  These  express  powers  may  be  divided  into  twenty-eight 
classes,  enumerated  as  follows :  (1)  power  to  purchase  its  own 
capital  stock  ;  (2)  power  to  subscribe  for,  purchase,  and  hold  stock 
in  other  corporations  ;  (3)  power  to  consolidate  with  other  cor- 
porations ;  (4)  power  to  transact  all  or  any  part  of  its  business 
outside  of  the  State  of  its  origin ;  (5)  power  to  extend  its  cor- 
porate existence ;  (6)  power  to  change  its  corporate  name  ;  (7) 
power  to  increase  or  decrease  its  capital  stock  ;  (8)  power  to 
issue  preferred  stock  ;  (9)  power  to  change  the  corporate  pur- 
poses ;  (10)  power  to  change  the  number  of  directors  ;  (11)  power 
to  change  its  domiciliary  office  or  place  for  the  transaction  of  its 
business ;  (12)  power  to  acquire  and  enforce  a  lien  upon  stock  of 
the  corporation  to  secure  the  payment  of  debts  due  the  corporation 
from  stockholders  ;  (13)  power  to  levy  assessments  against  the 
stockholders  with  the  right  to  forfeit  the  stock  for  non-payment 
thereof ;  (14)  power  to  authorize  voting  at  stockholders'  meetings 
by  proxy ;  (15)  power  to  allow  cumulative  voting  at  the  election 
of  directors  ;  (16)  power  to  issue   stock  as   full   paid  and   non- 

1  S.  W.  Co.  v.  Armstrong,   17  Me.  34. 

34 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  17 

assessable  in  exchange  for  property  or  services  ;  (17)  power  to 
sell  the  corporate  assets;  (18)  power  to  voluntarily  dissolve  the 
corporation  without  recourse  to  the  courts  ;  (19)  power  to  insert 
in  the  charter  provisions  for  the  regulation  of  the  internal  affairs 
of  the  corporation  ;  (20)  power  to  authorize  directors  to  adopt  by- 
laws ;  (21)  power  to  authorize  appointment  of  executive  com- 
mittee from  board  of  directors  ;  (22)  power  to  enlarge  or  diminish 
corporate  powers;  (23)  power  to  change  par  value  of  shares; 
(24)  power  of  bondholders  to  vote  at  elections  of  directors  ;  (25) 
power  to  classify  directors  ;  (26)  power  to  amend  articles  before 
organization  ;  (27)  power  to  surrender  charter  before  organiza- 
tion ;  (28)  power  given  to  minority  stockholders  to  compel 
purchase  of  their  holdings  upon  consolidation. 

Of  the  foregoing  enumerated  powers,  the  following  when  ex- 
pressly authorized  by  statute  are  applicable  to  all  corporations 
alike,  whether  reserved  or  enumerated  in  the  articles  of  incorpora- 
tion, to  wit:  The  power  to  consolidate  with  other  corporations;  to 
perform  constituent  acts  outside  of  the  State  of  its  origin ;  to 
extend  its  corporate  existence  ;  to  change  its  corporate  name  ;  to  in- 
crease or  decrease  its  capital  stock;  to  change  the  corporate  pur- 
poses, the  number  of  its  directors,  its  domiciliary  office  or  place 
for  the  transaction  of  its  business  ;  to  acquire  and  enforce  a 
lien  upon  stock  of  the  corporation  to  secure  the  payment  of  debts 
due  the  corporation  from  stockholders  ;  to  levy  assessments  against 
the  stockholders  with  the  right  to  forfeit  stock  for  non-payment 
thereof;  to  authorize  voting  at  stockholders'  meetings  by  proxy  ; 
to  permit  cumulative  voting  at  election  of  directors  (unless  such 
right  is  merely  made  permissible  by  statute)  ;  to  issue  stock  as  full 
paid  and  non-assessable  in  exchange  for  property  or  services  ;  to 
sell  the  corporate  assets  in  their  entirety  ;  to  voluntarily  dissolve 
the  corporation  without  recourse  to  the  courts  ;  to  authorize  the 
directors  to  adopt  by-laws  (unless  such  authority  is  by  statute  re- 
quired to  be  reserved  in  the  articles  of  incorporation)  ;  to  appoint 
an  executive  committee;  to  enlarge  or  diminish  the  corporate 
powers ;  to  change  the  par  value  of  shares ;  to  amend  articles 
before  organization;  to  surrender  charter  before  organization; 
power  given  to  minority  stockholders  to  compel  purchase  of  their 
holdings  upon  consolidation. 

Of  the  remaining  express  powers  it  is  probably  in  accord  with  the 
general  current  of   authority  in  this  country   to  say  that  to  bo 

35 


§  18    INCORPORATION  AND    ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

available  to  the  corporation  they  must  be  reserved  or  specified  in 
the  articles  of  incorporation.  The  powers  to  which  reference  is 
here  made  may  be  enumerated  as  follows :  To  subscribe  for, 
purchase,  and  hold  stock  in  other  corporations  ;  to  transact  all 
or  any  part  of  its  business  outside  of  the  State  of  its  origin ;  to 
issue  preferred  stock  ;  the  power  to  insert  in  the  charter  provisions 
for  the  regulation  of  the  internal  affairs  of  the  corporation ; 
power  of  bondholders  to  vote  at  election  of  directors ;  power  to 
classify  directors  ;  and  possibly  power  to  purchase  its  own  capital 
stock. 

§  18.  Power  of  Corporations  to  purchase  their  own  Stock.  — 
There  is  considerable  conflict  of  opinion  in  this  country  relative 
to  the  question  whether  a  corporation  may  purchase  its  own  stock 
without  express  statutory  authority  so  to  do.  One  line  of  deci- 
sions holds  to  the  view  that  such  power  exists  only  when  expressly 
conferred  by  statute  no  matter  what  the  purpose  may  be.1  Other 
courts  of  equally  high  standing  take  the  view  —  and  this  we  believe 
to  be  the  true  one  —  that  every  corporation  has  implied  power  to 
purchase  its  own  stock  provided  it  does  so  in  good  faith  and  with- 
out prejudice  to  the  rights  of  creditors.2  It  has  been  said  that, 
"  generally  speaking,  a  corporation,  when  acting  within  the  scope 
of  the  purposes  of  its  organization,  has  the  same  power  to  con- 
tract with  reference  to  such  powers  as  an  individual.  We  believe 
'  the  rule  to  be  well  settled  in  the  United  States  by  the  overwhelm- 
ing weight  of  authority  and  reason  that  a  private  corporation  may 
purchase  its  own  stock  if  the  transaction  is  fair  and  in  good  faith  ; 
if  it  is  free  from  fraud,  actual  or  constructive  ;  if  the  corporation 
is  not  insolvent  and  in  process  of  dissolution,  and  if  the  rights  of 
creditors  are  in  no  way  affected  thereby."  3 

Where  there  is  no  formal  corporate  action  taken,  authorizing 
the  purchase  of  the  company's  own  stock,  a  purchase  made  thereof, 
even  though  all  the  stockholders  separately  consented  thereto, 
would  be  invalid  as  against  creditors.4 

1  Crandall  v.  Lincoln,  52  Conn.  73 ;  Vt.  131  ;  Chapman  v.  Company,  62  N.  J. 
Currier  v.  Company,  56  N.  H.  262;  Morgan  497;  41  Atl.  690;  Belknap  v.  Adams,  49 
v.  Lewis,  46  0.  St.  1  ;  17  N.  E.  558.  La.  Ann.  1350;  22  Sou.  382  ;  Ins.  Co.  v. 

2  City   Bank  Columbus  v.   Bruce,  17  Swigert,  135  111.  162;  25  N.  E.  382;  Por- 
N.  Y.  507  ;  N.  E.  T.  Co.  v.  Abbott,  162  ter  v.  Company  (Mont.),  74  Pac.  938. 
Mass.  148;  38  N.  E.  432;  Clapp  v.  Peter-  3  Porter  v.  Company  (Mont.),  74  Pac. 
sen,  104  111.  26 ;  Hall  &  Farley  v.  Hender-  938. 

son,  126  Ala.  449;  Bank  v   Company,  18         4  DeLa  Vergne  Refrigerator  Machine 

36 


CHAP.  I.]  DRAFTING   THE    CHARTER.  §  19 

Some  of  the  States  expressly  authorize  corporations  to  purchase 
shares  of  their  own  capital  stock,  while  others  expressly  forbid  it.1 
The  rule  of  course  does  not  apply  to  those  cases  where  statutes 
exist  expressly  authorizing  the  forfeiture  of  stock  for  non-pay- 
ment of  assessments.2  The  purchase  by  a  corporation  of  its  own 
stock  does  not  extinguish  it.3  Many  of  the  States  have  statutes 
expressly  forbidding  corporations  to  vote  their  own  stock  when 
held  or  owned  by  them.  Even  in  the  absence  of  such  statute,  it  is 
probable  that  the  courts  would  enjoin  corporations  from  voting 
their  own  stock.4  By  statute  in  a  number  of  States  corporations 
are  forbidden  to  purchase  their  own  stock.5 

§  19.  Power  to  subscribe  for.  purchase,  and  hold  Stock  iu  other 
Corporations.  —  The  prevailing  rule  in  this  country  is  that  unless 
the  power  is  expressly  given  by  statute  or  by  reservation  of  such 
right  in  the  charter,  corporations  have  no  implied  power  to  sub- 
scribe for,  purchase,  or  hold  stock  in  other  corporations.6 

An  attempt  has  been  made  in  some  States  to  establish  the  rule 
that  where  the  statute  does  not  expressly  prohibit  such  act,  the 
corporation  may  purchase  stock  in  other  corporations  without  any 
express  authority  so  to  do,  provided  the  circumstances  are  such 
as  to  render  the  transaction  a  necessary  and  proper  means  for 
accomplishing  the  objects  of  its  creation.7 

If,  however,  there  is  no  statutory  prohibition  in  the  matter  and 
the  State  officials  permit  the  insertion  in  the  articles  of  the  power 
to  purchase  and  hold  stock  in  other  corporations,  the  exercise  of 
such  power  is  unquestionably  valid.8  In  the  same  connection  it 
may  be  observed  that  a  corporation  cannot  organize  subsidiary  com- 
panies unless  such  power  is  given  in  express  terms  in  the  charter 
or  by  necessary  implication  from  the  powers  thereby  conferred.9 

Co.  v.  German    Savings    Institution,  175  40  Ga.  582;  First  Nat.  Bank  v.  Nat.  Ex- 

U.  S.  38;  44  L.  E.  65.  change  Bank,  92  K.  S.    L22;  Knowles  v. 

1  Tolnian  v.  Company  (Dak.),  22  N.  \V.  Sandercock,  107  Cal.  629;  40  Pac.  1047. 
505.  i  inn  r.  Nisbet,  100  tad.  341  ;  Peshtigo 

2  Taylor  v.  Company,  6  Ohio,  83;  Co.  v.  Company,  50  [11.  App.  624;  S.  P. 
State  v.  Association,  35  O.  St.  258.  T.  Co.  v.  Company,  50  Minn.  93  ;  52  V  W. 

3  Bank  v.  Wickersham,  34  Cal.  444;  274;  Steamship  Co.  v.  Company,  28  L;l 
Clapp  v.  Peterson,  104  111.  26.  An.  173. 

4  Sec  McNeely  v.  Woodruff,  L3  N.  J.  8  N.  S.  Co.  v.  Borton  (Neb.),  93  N.  W. 
Law,  352;  Brewster  v.  Hartley,  37  Cal.  15.  225;    De  La  Vergne  Refrigerating   Ma- 

5  See  Tolman  v.  Company  (Dak.),  22  chine  Co.  v.  German  Savings  Institution, 
N.  W.  505.  175  U.  S.  38  ;  20  8.  <'t.  20. 

6  Franklin  Bank  v.  Commercial  Bank,  8  Lagrone v.  Timoerman,  46  6.0.878} 
36  0.  St.  258 ;  Central  Ry.  Co.  v.  Collins,  24  S.  E.  2'JO. 

:;: 


§  21    INCORPORATION    AND    ORGANIZATION    OP    CORPORATIONS.    [PART  I. 

In  Alaska,  District  of  Columbia,  and  Georgia  corporations  are 
forbidden  by  statute  to  hold  stock  in  other  corporations. 

§  20.  Power  to  consolidate  with  other  Corporations.  —  Corpora- 
tions cannot  consolidate  as  against  dissenting  stockholders, 
however  desirable  or  beneficial  the  consolidation  may  be,  unless 
legislative  authority  is  granted  to  that  end.1  In  the  exercise  of  the 
police  power  of  the  State  it  may  lawfully  prohibit  the  consolidation 
of  corporations.2 

Consolidation  of  corporations  to  a  greater  or  less  extent  is 
permitted  by  statute  at  the  present  time  in  the  States  of  Alabama? 
California,  Connecticut,  Delaware,  Illinois,  Kentucky,  Maine, 
Montana,  Nevada,  New  Jersey,  New  York,  North  Carolina,  Vir- 
ginia, and  West  Virginia.  An  attempt  has  been  made  to  lay  down 
the  rule  that  in  order  to  effect  a  lawful  consolidation  as  between 
two  corporations,  the  power  to  so  consolidate  must  be  conferred 
by  each  of  the  States  under  whose  laws  they  were  created.3  A 
better  rule,  however,  and  the  only  practicable  one  seems  to  be 
this  :  That  either  statutory  power  to  dispose  of  all  the  assets  of 
the  corporation,  or  in  the  absence  thereof,  the  consent  of  all  the 
stockholders  must  be  obtained  to  the  sale  of  the  assets  of  one 
corporation  to  another.  Consolidation  in  this  way  then  takes  the 
form  of  a  selling  out  and  of  accepting  money  or  shares  in  the  new 
corporation  in  return  for  the  assets  of  the  old.4 

§  21.  Power  to  transact  all  or  any  Part  of  the  Corporate  Business 
outside  of  the  state  of  its  Domicile.  —  If  there  are  no  statutory  re- 
strictions, a  corporation  has  implied  power  to  carry  on  its  business 
at  any  place  within  the  State  in  which  its  charter  is  procured.5 
The  statutory  requirement  requiring  the  corporation  to  fix  in  the 
articles  its  principal  place  of  business  does  not  prohibit  under 
ordinary  circumstances  the  transaction  of  other  business  within 
the  State.6 

Long  ago  in  Bank  of  Augusta  v.  Earle  7  Chief  Justice  Taney, 

i  Pearce  v.  Ry.  Co.,  91  How.  341  ;  Hill  Racine,  etc.  Ry.  Co.  v.  Company,  49  III. 

v.  Nisbet,  100  Ind.  341;  People  v.  Com-  331. 

pany,  121  N.  Y.  582  ;  24  N.  E.  834  ;  L.  &N.  5  Ashley   Wire    Co.   v.   Company,    60 

Ry.  Co.  v.  Kentucky,  161  U.  S.  677.  111.  App.    179;    City  Bank    v.   Beech,    I 

2  L.  &N.  Ry.  Co.  v.  Kentucky,  161  U.  S.  Blatchford,  425  ;  Stickle  v.  Company  (N. 
677.  J.  Eq.),  32  Atl.  708 ;  Underwood  v.  Wal- 

3  id_  dron,  12  Mich.  73  ;  Berthin  v.  Company, 

4  Matter  of  Prospect  Park,  etc.  Ry.  Co.,  28  La.  An.  210;  Lane  v.  Bank,  9  Heisk. 
67  N.  Y.  371 ;  Toledo,  etc.  Ry.  Co.  v.  Com-  (Tenn.)  419. 

pany,   95    Fed.   497  ;    36    C.  C.    A.    155  ;  6  Potter  v.  Bank,  5  Hill  (N.  Y.),  490. 

Lanman    v.    Company,    30    Pa.    St.    42;  7  13  Peters,  519. 

38 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §   21 

commenting  upon  the  right  of  a  corporation  to  transact  business 
beyond  the  limits  of  the  domiciliary  State,  spoke  as  follows  : 

"It  is  very  true  that  a  corporation  can  have  no  legal  existence 
out  of  the  boundaries  of  the  sovereignty  by  which  it  is  created. 
It  exists  only  in  contemplation  of  law,  and  by  force  of  the  law  ; 
and  where  that  law  ceases  to  operate,  and  is  no  longer  obligatory, 
the  corporation  can  have  no  existence.  It  must  dwell  in  the  place 
of  its  creation  and  cannot  migrate  to  another  sovereignty.  But 
although  it  must  live  and  have  its  being  in  that  state  only,  yet  it 
does  not  by  any  means  follow  that  its  existence  there  will  not  be 
recognized  in  other  places ;  and  its  residence  in  one  state  creates  no 
insuperable  objection  to  its  power  of  contracting  in  another.  It  is 
indeed  a  mere  artificial  being,  invisible  and  intangible  ;  yet  it  is  a 
person  for  certain  purposes  in  contemplation  of  law.  .  .  .  Natural 
persons  through  the  intervention  of  agents  are  continually  making 
contracts  in  countries  in  which  they  do  not  reside  ;  and  where  they 
are  not  personally  present  when  the  contract  is  made ;  and  nobody 
has  ever  doubted  the  validity  of  these  agreements.  And  whal 
greater  objection  can  there  be  to  the  capacity  of  an  artificial  person, 
by  its  agents,  to  make  a  contract  within  the  scope  of  its  limited 
powers,  in  a  sovereignty  in  which  it  does  not  reside;  provided  such 
contracts  are  permitted  to  be  made  by  them  by  the  laws  of  the 
place." x 

The  strictly  legal  existence  of  a  corporation  is  confined  to  the 
State  which  created  it,  and  it  can  exercise  its  powers  in  another 
State  only  by  permission,  express  or  implied,  of  the  legislative 
power  thereof;  but  the  mere  right  to  purchase  and  sell  property 
will  be  recognized  and  protected  in  any  State  subject  only  to  the 
limitations  that  the  exercise  of  such  right  shall  not  be  contrary  to 
the  laws  or  settled  policy  of  the  latter  State  or  prejudicial  to  its 
interests  or  those  of  its  citizens.  Unless  the  Constitution  or  stat- 
utes declare  a  contrary  rule,  the  courts  of  another  State  are  bound 
to  recognize  the  right  of  a  foreign  corporation  to  collect  debts  due 
to  it,  by  receiving  a  conveyance  of  land." 

In  order,  however,  to  avoid  complications  that  might  possibly 
arise  through  hostile  action  on  the  part  of  stockholders  or  of  foreign 
States,  statutes  have  been  enacted  in  a  number  of  the  Common- 

1  See  Hall  v.  Company,  91  Ala.  363  ;  8  2  Thompson  v.  Waters,  25  Mich.  214. 

So.  348. 

39 


§  23   INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

wealths  expressly  authorizing  the  transaction  of  business  in  foreign 
states  and  jurisdictions.1 

Under  the  progressive  incorporation  acts  in  force  in  many  of 
the  States  at  the  present  time  it  is  unquestionably  permissible  to 
organize  corporations  in  one  State  for  the  exclusive  purpose  of 
transacting  their  entire  business  in  other  States  and  Territories.2 

§  22.  Power  to  perform  Constituent  Acts  outside  of  the  Domi- 
ciliary State.  —  By  constituent  acts  is  meant  such  corporate  trans- 
actions as  are  separate  and  apart  from  its  ordinary  business 
dealings  with  third  parties  ;  such,  for  example,  as  the  organization 
of  the  corporation  in  the  first  instance,  the  adoption  of  by-laws, 
the  issuance  of  stock  certificates,  the  election  of  directors  and 
officers,  and  the  holding  of  stockholders'  meetings.3  As  a  general 
rule  such  constituent  acts  cannot  be  performed  without  the  domi- 
ciliary State.4 

The  legislature  may,  of  course,  authorize  the  performance  of 
constituent  acts  beyond  the  limits  of  the  State.  This  has  been 
done  in  a  number  of  the  Commonwealths.  It  is  probably  safe  to 
say  that  aside  from  organization  meetings  the  presence  of  stock- 
holders of  the  corporation  at  a  meeting  held  without  the  State  will 
estop  them  from  attacking  the  validity  of  the  proceedings  had  at 
such  meeting.6 

§  23.    Power  to  extend  Corporate  Existence.  —  In   twenty-seven 

1  Ashley  Wire  Co.  v.  Company,  60  111.  428 ;  Galveston,  etc.  Ry.  Co.  v.  Cowdrey, 
App.  179;  Kennebec  Co.  v.  Company,  72      11  Wall.  459;  20  Law.  Ed.  199. 

Mass.  204 ;  Aspinwall  v.  Company,  20  Ind.  4  Commonwealth  v.  Smith,  45  Pa.  St. 

492  ;  Blodgett  v.  L.  Z.  Company,  120  Fed.  59 ;  Smith  v.  Company,  64  Md.  85  ;  20  Atl. 

893.  1032;  Tuckasegee  Mining  Co.  v.  Goodhue, 

2  Sec.  Nat.  Bank  v.  Hall,  35  O.  St.  158  ;  118  N.  C.  981;  24  S.  E.  797;  Camp  v. 
M.  L.  &  S.  Co.  o.  Reinhard,  114  Mo.  218;  Byrne,  41  Mo.  525 ;  F.  T.  L.  Co.  v.  Laigle, 
21  S.  W.  488;  O.  M.  Co.  v.  Garst,  18  59  Tex.  339;  Craig  Co.  v.  Smith,  163 
R.  I.  484;  28  Atl.  973  ;  People  v.  Com-  Mass.  262  ;  39  N.  E.  1116;  Bellows  v.  Todd, 
pany,  153  111.  25;  38  N.  E.  752;  Tilley  v.  39  Iowa,  209;  Hodgson  v.  Company,  46 
Coykendall,  172  N.  Y.  87  ;  65  N.  E.  574 ;  Minn.  454 ;  49  N.  W.  197 ;  Harding  v.  Corn- 
Minn.,  etc.  Co.  v.  Denslow,  46  Minn.  171  ;  pany,  182  111.  551 ;  55  N.  E.  577;  Jones  v. 
48  N.  W.  771;  Wright  v.  Lee,  2  S.  D.  Company,  20  Col.  417  ;  38  Pac.  700 ;  Mack 
596;  51  N.  W.  706;  A.,  etc.  R.  R.  Co.  v.  v.  Company,  90  Ala.  396;  8  So.  150; 
Fletcher,  35  Kan.  236 ;  10  Pac.  596  ;  North,  Aspinwall  v.  Company,  20  Ind.  492  ;  Court- 
etc.  Stock    Co.  v.   People,    147    111.    234 ;  right  v.  Deeds,  37  Iowa,  503. 

35  N.  E.  608;  Canada  S.  Ry.  Co.  v.  Geb-  6  Handley  v.  Stutz,    139    U.   S.    417; 

hard,  109  U.  S.  527  ;  3  S.  Ct.  363  ;  Cowell  Galveston,  etc.  Ry.   Co.  v.   Cowdrey,   11 

v.  Springs  Co.,  100  U.  S.  55  ;  Hastings  v.  Wall.  459  ;  see  also  Humphreys  v.  Mooney, 

Anacortes,   etc.   Co.,   29   Wash.    224 ;   69  5  Col.  282. 
Pac.  776 ;  Irvine  Co.  v.  Bond,  74  Fed.  849. 

3  See   McCall   v.   Company,   6    Conn. 

40 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  26 

of  the  Commonwealths  perpetual  existence  is  permitted  in  the 
incorporation  of  companies  therein.  The  power  to  extend  such 
existence  is  not  of  any  material  importance  in  these  Common- 
wealths. Twenty-five  of  the  incorporation  acts  specifically  provide 
for  the  extension  of  corporate  existence.  Without  such  statutory 
authority  corporate  existence  cannot  be  extended.1 

In  some  of  the  States  extension  of  corporate  existence  must  be 
accompanied  by  the  payment  of  an  organization  tax,  as  is  the  case 
of  new  corporations.  Thus,  in  New  Jersey,  where  such  a  provi- 
sion exists,  it  has  been  held  that  such  tax  must  be  paid  even 
though  the  extension  of  the  corporate  existence  was  obtained  in 
the  guise  of  an  amendment  to  the  charter.2 

§  24.  Power  to  change  the  Corporate  Name.  —  Without  statu- 
tory authority  so  to  do  corporations  cannot  change  their  name.3 
If  the  proposed  change  of  name  confiicts  with  the  name  of  an 
existing  domestic  corporation,  State  officials  are  justified  in  refus- 
ing to  allow  the  certificate  showing  the  adoption  of  the  new  name 
to  be  filed.4 

Some  of  the  States,  as,  for  example,  New  York  and  California, 
only  permit  change  of  name  by  application  to  the  courts. 

§  25.  Power  to  increase  or  decrease  Capital  Stock.  —  A  corpo- 
ration has  no  implied  power  to  either  increase  or  decrease  the 
capital  stock.5  Such  power  must  be  conferred  in  express  terms 
by  the  incorporation  act  under  which  the  corporation  is  organized.0 

Power  to  increase  or  decrease  capital  stock  vests  in  the  stock- 
holders and  not  in  the  directors.7  Frequently  incorporation  acts 
provide  that  the  stock  shall  not  be  diminished  to  less  than  the 
amount  of  the  corporate  debts.  Such  is  the  case  in  California 
and  other  States.  Certificates  of  stock  issued  on  a  fictitious 
increase  of  stock  are  void.8 

§26.    Power  to  issue  Preferred  Stock.  —  Stockholders  enjoying 

i  See  post,  sec.  120.  ''  Sutherland   v.  Olcott,  95   N.   V.  93; 

2  National  Lead  Co.  v.  Dickinson  (N.  J.),  Crandall  v.  Lincoln,  52  Conn.  73  ;  (!.  I. .  & 
57  Atl.  138.  II.  Insurance  Co.  V.  Kamper,  7:>  Ala,  32S  . 

3  Sykes  v.  People,  132  111.  32  ;  23  N.  E.  Palmer  v.  Bank,  72  Minn  266;  75  N.  \V. 
391;  C.  D.&M.Ry.  Co.  v.  Kcisel,  43  la.  380;  Detroit  Chamber  of  Commerce  v, 
39;  Glass  Co.   v.  Company,  32  Ind   370.  State  Secretary,  L09  Mich.  691  ;  67  N.  W. 

*  In  re  U.  S.  M.  Rep.  Agency,  115  N.  Y.  897. 
170;  21  N.  E.  1034  ;  People  v.  Company,  7  C.  C.  Ry.  Co.  v.  Allerton,  18  Wall. 

II  1  Mich.  405;  ryj  N.  W.  653.  233. 

6  Ins.  Co. v.  Kamper,  73  Ala. 825;  Poll-  *  Beitman   v.   Steiucr,   98    Ala.    241; 

man  v.  Upton,  96  U.  S.  328.  13  Sou.   87. 

11 


§  26    INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS.    [PART  I. 

preferential  or  additional  rights  not  enjoyed  by  the  holders  of 
common  shares  are  called  "  preferred  stockholders."  The  issu- 
ance of  preferred  stock  is  a  mode  by  which  a  corporation  obtains 
funds  for  its  enterprise,  without  borrowing  money  or  contracting 
a  debt.1  The  question  as  to  whether  or  not  preferred  stock  may 
be  issued  by  corporations  without  express  authority  by  law  is  a 
somewhat  difficult  one  to  settle.  In  twenty-five  of  the  States  the 
question  is  settled  by  the  existence  of  statutes  expressly  authoriz- 
ing the  issuance  of  preferred  stock,  and  even  in  those  States 
where  no  such  statutes  exist  it  is,  with  some  few  exceptions,  the 
custom  of  the  State  officials  to  permit  the .  insertion  in  the  articles 
of  incorporation  of  provisions  authorizing  the  issuance  of  preferred 
stock.  The  action  of  such  officials  is  certainly  conclusive  as 
against  all  the  world  except  the  State.3 

The  true  rule  governing  the  matter  now  before  us  is,  in  the 
opinion  of  the  writer,  best  set  forth  in  the  case  of  Campbell  v. 
American  Zylonite  Company.4  In  this  case  the  articles  of  incor- 
poration divided  the  capital  stock  of  the  corporation  into  shares, 
equal  in  amount  and  value.  Some  time  after  incorporation  one  of 
the  stockholders  executed  a  blank  assignment  of  certain  stock 
owned  by  him  to  a  third  party  as  security  for  a  loan.  Subsequently 
all  the  stockholders,  except  the  owner  of  this  pledged  certificate, 
at  a  meeting  duly  called  for  that  purpose,  voted  to  surrender  to 
the  corporation,  without  consideration,  forty  per  cent  of  their 
stock,  and  authorized  the  corporation  to  reissue  this  forty  per  cent 
in  the  form  of  preferred  shares.  The  legality  of  this  act  was 
contested  by  the  holder  of  the  pledged  certificate,  and  in  passing 
upon  the  legal  question  involved,  the  court  spoke  as  follows : 

"  The  right  of  every  shareholder  to  his  proportion  of  the  profits  of 
the  corporation  was  vested,  and  in  the  absence  of  some  power  to 
change  the  relative  value  of  the  shares  conferred  by  statute  or  by 
the  articles  of  incorporation,  no  change  could  be  made  without  the 
consent  of  all  the  shareholders.  .  .  .  The  assignee  of  shares  having 
possession  of  the  certificates,  although  holding  under  unregistered 
transfers,  are  not  bound  by  contracts  between  the  registered  share- 
holders, the  corporation  and  all  the  other  shareholders  which  are  not 
within  the  express  or  implied  powers  of  corporations  or  of  their  share- 
holders.    As  between  the  assignor  and  the  assignee,  the  unregistered 

1  Chaffee  v.  Company,  55  Vt.  110.  3  See  Hamlin  r.  R.  R.  Co.,  78  Fed.  670. 

*  122  N.  Y.  455  ;  25  N.  E.  853. 

42 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §   26 

assignment  was  not  void.  It  follows  that  the  change  in  the  relative 
value  of  the  shares  which  this  corporation  and  its  registered  share- 
holders sought  to  effect  was  not  within  the  express  or  implied  powers 
conferred  upon  the  corporation  or  shareholders,  and  that  their  action 
is  not  binding  upon  the  holder  of  the  assigned  certificate  who  did  not 
consent  to  the  issuance  of  the  preferred  shares." 

In  Kent  v.  Quicksilver  Company1  the  court  addressing  itself  to 
the  question  now  before  us,  spoke  as  follows: 

"  There  arises  the  query  whether  there  was  power  iu  the  corporation 
to  distinguish  between  the  stockholders  in  it  to  form  them  into  two 
classes,  and  to  give  to  one  class  rights  in  the  corporate  property  and 
business  and  earnings  from  which  the  other  was  shut  out.  We  are 
not  prepared  to  say  that  at  the  first  the  corporation  might  not  have 
lawfully  divided  the  interest  in  its  capital  stock  into  shares  arranged 
in  classes,  preferring  one  class  to  another  in  the  right  which  they 
should  have  in  the  profits  of  the  business.  The  charter  gave  power 
to  make  such  by-laws  as  it  might  deem  proper  consistent  with  Con- 
stitution and  law.  We  know  of  nothing  in  the  Constitution  or  the 
law  that  inhibits  a  corporation  from  beginning  its  corporate  action  by 
classifying  the  shares  of  its  capital  stock,  with  peculiar  privileges  to 
one  share  over  another,  and  thus  offering  its  stock  to  the  public  for 
subscriptions  thereto.  No  rights  are  got  until  a  subscription  is  made. 
Each  subscriber  would  know  for  what  class  of  stock  he  put  down  his 
name,  and  what  right  he 'got  when  he  thus  became  a  stockholder. 
There  need  be  no  deception  or  mistake,  there  would  be  no  tread- 
ing upon  rights  previously  acquired;  no  contract,  express  or  im- 
plied, would  be  broken  or  impaired.  Shares  of  stock  are  in  the 
nature  of  choses  in  action,  and  give  the  holder  a  fixed  right  in 
the  division  of  profits  or  earnings  of  the  company  so  long  as  it  exists, 
and  of  its  effects  when  it  is  dissolved.  That  right  is  as  inviolable  as 
is  any  right  in  property,  and  can  no  more  be  taken  away  or  lessened 
against  the  will  of  the  owner  than  can  any  other  right,  unless  power 
is  reserved  in  the  first  instance,  when  it  enters  into  the  constitution 
of  the  right;  or  is  properly  derived  afterward  from  a  superior  law- 
giver. It  is  manifest  that  any  action  of  a  corporation  which  takes 
hold  of  the  shares  of  its  capital  stock  already  sold  and  in  the  hands 
of  lawful  owners,  and  divides  them  into  two  classes,  —  one  of  which 
is  thereby  given  prior  right  to  a  receipt  of  a  fixed  sum  from  the  earn- 
ings before  the  other  may  have  any  receipt  therefrom,  and  is  given 
an  equal  share  afterward  with  the  other  in  what  earnings  may 
remain, — destroys  the  equality  of  the  shares,  takes  away  a  right 

l   78  X.  V.  L67. 

I:; 


§  26    INCORPORATION   AND    ORGANIZATION   OF   CORPORATIONS.    [PART  I.. 

which  originally  existed  in  it,  and  materially  varies  the  effect  of  the 
certificate  of  stock.  It  is  said  that  when  a  corporation  can  lawfully 
buy  property  or  get  money  on  loan,  any  known  assurance  may  be 
exacted  and  given  which  does  not  fall  within  the  prohibition,  express 
or  implied,  of  some  statute.  But  the  prohibition  to  such  action  as 
this  is  found  not,  indeed,  in  a  statute  commonly  so  called,  but  in  the 
constitutional  provision  which  forbids  the  impairment  of  vested 
rights,  save  for  public  purposes  and  on  due  compensation.  The 
right  which  a  stockholder  gets  on  the  purchase  of  his  share,  and 
the  issue  to  him  of  the  certificate  therefor,  is  such  a  vested  right. 
It  is  contended  that  the  power  so  to  do  is  an  incidental  and  implied 
power  necessary  to  the  use  of  the  other  powers  of  the  corporation, 
and  is  a  legitimate  means  of  raising  money  before  securing  the 
agreed  consideration  therefor.  We  have  already  conceded  that  it  is 
legitimate  to  borrow  money  and  to  secure  the  repayment  of  it  with 
a  compensation  for  the  use  of  it.  But  that  is  when  it  is  done  in  such 
way  as  to  put  the  burden  upon  every  share  of  stock  alike,  and  to 
enable  every  share  of  stock  to  be  relieved  therefrom  alike ;  in  such 
way  as  to  preserve  the  equality  of  right  and  privilege  and  value  of  the 
shares,  and  maintain  intact  the  contract  thereto  with  the  stockholders. 
"  We  are,  therefore,  of  the  opinion  that  there  was  no  power  in  the 
corporate  body,  nor  in  a  majority  of  the  stockholders,  to  provide  by 
by-law  for  the  creation  of  a  preferred  stock,  so  as  to  bind  a  minority 
of  the  stockholders  not  assenting  thereto." 

In  what  has  been  stated  a  most  important  principle  has  been 
referred  to,  which,  it  is  believed,  is  controlling  upon  the  question  at 
hand.  This  principle  to  which  reference  is  here  made  is  that  the 
charter  proceeds  from  the  State,  and  that  nothing  can  be  legally 
done  by  the  corporation  acting  through  its  stockholders  not  au- 
thorized either  by  statute  or  by  the  charter  itself. ,  Thus  it  is 
clear  that  in  these  States  where  the  statutory  right  to  issue  pre- 
ferred stock  is  not  granted  and  the  charter  itself  only  provides 
for  common  stock,  no  preferred  stock  can  be  legally  issued  by  the 
stockholders  as  against  the  State,  except  by  amending  the  charter 
itself.     This,  too,  even  where  the  stockholders  consent.1 

This  question  is  likely  to  be  presented  in  a  troublesome  form 
where  common  stock  has  been  pledged  to  creditors  before  the  pre- 
ferred stock  was  issued.2 

From  a  careful  examination  of  the  authorities  it  may  be  said 

1  Knoxville,  etc.  Co.  v.  City  of  Knox-  2  See  generally  Lockhart  v.  Van  Als- 
ville,  98  Tenn.  1 ;  37  S.  W.  883.  tyne,  31  Mich.  76;  McGregor  v.  Insurance 

44 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  26 

that  in  order  to  constitute  an  issue  of  preferred  stock  valid  as 
against  all  the  world,  there  must  be  a  statute  authorizing  it,  or 
provision  therefor  inserted  in  the  charter.  To  make  the  issue 
valid  as  against  all  but  the  State,  the  consent  of  all  of  the  holders 
of  common  stock  to  the  issuance  of  preferred  stock  is,  doubtless, 
all  that  is  necessary.1  It  is  hardly  necessary  to  add,  in  addition  to 
the  foregoing,  that  the  total  amount  of  common  stock  added  to 
the  preferred  stock  so  issued  must  not  in  any  case  exceed  the 
total  authorized  capital  stock  of  the  corporation. 

The  rights  of  holders  of  preferred  stock  depend  upon  the  terms 
of  the  statute  or  of  the  charter  or  by-law  authorizing  it.2  Ordi- 
narily the  power  to  authorize  the  issuance  of  preferred  stock  vests 
in  the  stockholders  and  not  in  the  directors.3 

Where  a  portion  of  the  stock  of  the  corporation  is  issued  as 
preferred,  no  creditor  of  the  corporation  can  object,  provided  the 
money  paid  for  the  stock  reaches  the  treasury  of  the  corporation, 
and  the  dividends  on  the  stock  are  not  to  be  paid  except  out  of 
net  profits.4  Unless  the  statute  provides  otherwise,  preferred 
stockholders  may  be  deprived  of  the  right  which  they  would 
otherwise  have,  to  vote  their  stock  in  the  same  manner  as  com- 
mon stockholders.5  This  is  commonly  done  either  by  charter  pro- 
vision or  by  a  by-law  adopted  before  any  preferred  stock  is  issued. 

Preferred  stock  cannot  be  lawfully  issued  with  the  provision  that 
it  shall  bear  interest  absolutely.6  In  order  to  make  preferred  stock 
a  lien  upon  the  corporate  assets  statutory  authority  is  necessary.7 

Co.,  33  N.J.  Eq.  181;  Higgins  ?;.  Lansingh,  By.  Co.,  4   K.  &  J.   1;   27  L.  J.  Ch.    1; 

154  111.  301;  40  N.   E.  362;  Covington,  Corry  v.  Londonderry,  etc.  Co.,  29   Bea^ 

etc.    Co.    v.    Sargent,    1    Cinn.    Sup.    Ct.  272;  3  L.  J.  Ch.  290;  Coates  v.  Notting- 

354;  Elevator  Co.  v.  Memphis,  etc.  Co.,  ham  Water  Works  Co.,  30  Heav.  86. 

85   Tenn.    703;    5    S.    W.  52;    March  v.  x  Higgins    t\  Lansiiigh,    154    111.   301; 

Eastern  R.  R.  Co., '43  N.  II.  515;   Bates  40  N.  E.  362. 

v.  Androscoggin,  etc.   It.  R.  Co.,  49  Me.  2  Scott  v.  B.  &  O.   R.    R.  Co.,  93   Md. 

491;    Prouty    v.    Mich.,  etc.    R.    R.    Co.,  75 ;  49  Atl.  327. 

1    Hun,   655;    Kent  v.   Quicksilver    Min.  8  See  Coit  v.  Freed,  15  Utah,  426;  49 

Co.,  12  Hun,  53  ;  Jones  v.  Terre  Haute,  etc.  Pac.  533. 

•  Co.,  57   N.  Y.   196;    Hoyt  v.  Quicksilver  4  First  Nat.  Bank  of  Peoria  v.  Peoria 

Mining  Co.,  78  N.  Y.  159;  8.  c.  9  Week.  Watch  Co.,  191  111.  12s;  60  N.  E.  859. 

Digest,  187,  aff'g  17   Hun,  169;  Curry  v.  5  Lockhart   v.  Van  Alstyne,  81    Mich. 

Scott,  54    Pa.   St.  270;  Sturge-s  v.  E.  Un.  76;  Mackintosh  v.  Company,  82  Fed.  850 J 

Ry.Co.,7  Do  Gex,  M.  &  G.  158;  Matthews  Miller  v.  Rattcrman,  47  0.  St.  141. 

v.  Gt.  Northern  R.  It.  Co.,  28  L.  J.  Ch.  375  ;  8  Winscott  v.   Investment   Co.,  63  Mo. 

Green's  Brice   Ultra  Vires,  145;  Hutton  Ap.  367. 

v.  Scarhorough  Hotel  Co.,  2  Drew  &  Sim.  7  Continental  Trust  Co.  o.  Toledo,  etc. 

514;    Hook    v.    (it.    Western    By.    ('<>.,:!  Ry.  Co.,  72  Fed.  92. 
L.   R.  Ch.  262;   Henry  v.  (it.  Northern 

45 


§  28    INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS.    [PART  I. 

S  27.  Power  to  change  the  Corporate  Purposes.  —  In  the  early 
days  the  right  of  amendment,  when  the  same  related  to  altering 
the  original  purposes  of  corporations,  was  jealously  guarded  and 
limited  both  by  statute  and  by  judicial  construction.  In  later 
years  there  has  been  evinced  greater  liberality  in  this  regard,  as 
evidenced  by  granting  to  corporations  unlimited  power  of  amend- 
ment. The  only  real  difficulty  in  this  connection  arises  when 
an  attempt  is  made  to  so  completely  change  the  original  purposes 
for  which  a  corporation  was  formed  as  in  effect  to  create  a  new 
corporation.  Under  the  Pennsylvania  Incorporation  Act  gov- 
erning amendments,  it  was  held  that  this  could  not  be  done.1 

The  present  attitude  of  the  courts  on  this  subject  is  well  shown 
by  a  recent  New  Jersey  decision,  —  that  of  Meredith  v.  New  Jersey 
Zinc  &  Iron  Company.3  In  this  case  the  right  of  amendment, 
even  when  producing  fundamental  changes  in  the  corporate  pur- 
poses, was  sustained.4 

It  appears  clear  that  under  the  liberal  power  of  amendment 
existing  to-day  in  the  majority  of  the  States,  any  changes  may  be 
made,  no  matter  how  fundamental,  by  the  consent  of  all  the 
stockholders.  And  where  the  matter  is  simply  one  between  the 
corporation  and  the  State,  the  right  to  make  such  an  amendment 
cannot,  in  the  States  referred  to,  be  questioned  wheu  adopted  by 
the  requisite  number  of  stockholders. 

§  28.  Power  to  change  Number  of  Directors.  —  Only  in  those 
States  where  the  number  of  directors  is  required  to  be  fixed  in 
the  articles,  is  it  necessary  to  have  statutory  authority  to  change 
the  same.  In  other  States  the  matter  of  amendment  may  be 
regulated  by  the  by-laws.  However,  in  the  larger  number  of  the 
Commonwealths,  the  power  to  amend  the  articles  with  reference 
to  changing  the  number  of  directors  is  required  to  be  based  upon 
express  statutory  authority  so  to  do.5 

i  In  re  Pennsylvania  Bottling  Co.,  19  694;   38   N.  TV.   113;    Stickle  v.  Liberty 

Pennsylvania  County  Court  Keports,  593.  Cycle  Mfg.  Co.  (N.  J.  Eq.),  32  Atl.  708  ; 

See  also  State  v.  Taylor,  53  Iowa,  759;  6  Banet  v.  Company,  13  111.  504;    Ross  v. 

N.  TV.  39.  Company,  77  111.  134  ;  Pac.  Ry.  Co.  v.  Ren- 

3  Meredith  v.  Company,  59  N.  J.  Eq.  shaw,  18  Mo.  210  ;  Ashton  v.  Burbank,  2 
257;   44  Atl.  55.     See  also  sec.  112, post.  Dill.  (U.  S.)  435;  Del.  Ry.  Co.  v.  Thorp,  1 

4  See  also  Grand  River  College  v.  Rob-  Hurst  (Del.),  149 ;  M.  B.  Ry.  Co.  v.  Sullivan, 
ertson,  67  Mo.  App.  329  ;  Mercantile  State-  37  Ga.  240 ;  Com.  v.  Cullen,  13  Pa.  St.  133. 
ment  Co.  v.  Kneal,  51  Minn.  263  ;  53  N.  W.  5  Matter  of  Griffing  Iron  Co.,  63  N.  J. 
632;  Bowie  v.  Grand  Lodge,  99  Cal.  392 ;  Law,  168;  41  Atl.  9311;  63  N.  J.  Law, 
34  Pac.   103  ;    Day    v.  Company,   75  la.  357 ;  46  Atl.  1097. 

46 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  30 

§  29.  The  Power  to  change  the  Corporate  Domicile  and  Principal 
Place  of  Business.  —  As  will  hereafter  be  seen,  it  is  essential  to 
corporate  existence  that  the  corporation  should  have  a  home.1  It 
is  the  naming  of  the  domiciliary  office  in  the  articles  which  fixes 
the  residence  of  the  corporation  for  jurisdictional  purposes,  and 
fixes  the  usual  place  for  holding  stockholders'  and  directors'  meet- 
ings. If  it  is  desired  to  change  the  domicile,  or  if  the  location  of 
the .  corporation's  principal  place  of  business  is  to  be  transferred 
from  one  place  to  another,  an  amendment  to  the  articles  must 
be  had  under  legislative  sanction.2  It  should,  however,  be  noted 
in  this  connection,  that  the  corporation's  domicile  and  its  princi- 
pal place  of  business  are  not  necessarily  one  and  the  same  thing.3 

Again,  if,  as  is  the  case  in  some  States,  the  name  of  the  agent 
upon  whom  process  upon  the  corporation  may  be  served,  is  re- 
quired to  be  set  forth  in  the  articles,  in  order  to  lawfully  substi- 
tute a  new  agent,  an  amendment  to  the  articles  is  necessary, 
made  pursuant  to  statutory  authority  given  in  the  premises.4 

§  30.  Power  to  acquire  and  enforce  a  Lien  upon  Stock  to  se- 
cure the  Payment  of  Debts  Due  the  Corporation.  —  In  a  large 
number  of  the  States  statutes  exist  expressly  granting  to  cor- 
porations the  right  to  enforce  a  lien  upon  the  stock  of  its  members 
for  the  purpose  of  securing  the  payment  of  debts  due  from  such 
members  to  the  corporation. 

The  courts  are  not  by  any  means  in  entire  agreement  as  to 
whether  statutory  authority  to  enforce  such  a  lien  is  essential  to 
its  validity.  Some  courts,  of  excellent  repute,  maintain  the  affirm- 
ative, and  others  take  the  opposite  view.6  It  seems  fairly  certain 
that  at  common  law  such  a  right  did  not  exist.7 

The  true  view  appears  to  be  that  while  at  common  law  a  cor- 
poration had  no  lien  on  the  shares  of  its  capital  stock  for  the 
debts  due  it  from  the  stockholders,  nevertheless  such  a  lien  may 
be  acquired  either  when  given  by  statute  or  when  such  right  is 

1  S(-e  post,  sec.  54.  6  Costello  v.  Company,  69  N.  II.  40j,  48 

2  See  Stickle  v.  Liberty  Cycle  Mfg.  Atl.  640;  Foung  v.  Vough,  23  X.J.  Eq. 
Co.  (N.  J.  Eq.),  32  Atl.  708;  Kennett  325;  Moore  v.  Bank,  52  Mo.  377  ;  In  re 
v.  Company,  68  N.  H.  432;  39  Atl.  585;  Klaus.  67  Wis.  401  ;  29  N.W  582  ;  Farm- 
Harris  v.  McGregor,  29  Cal.  124.  era',  etc.   Bank    v.  Wasson,  48    [a.  336; 

3  Van  Etten  v.  Eaton,  19  .Mich.  187;  Cont. T.  R.  Co.  v.  Toledo,  etc,  Ry.  Co.,  72 
McConnell  v.  Company  (.Mont.),  74  Pac.  Fed.  92. 

194-  7  Brinkerhoff,  etc.  Co.  v.  Company,  118 

4  See  Johnson  v.  Mason  Lodge,  21  Ky.     Mo.  447;  24  8.  W.  129. 
Law  Hep.  493;  51  8.  W.  620. 

17 


§  31    INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS.    [PART  I. 

preserved  by  inserting  provisions  therefor  in  the  Articles  of  Incor- 
poration, or  by  the  passage  of  a  valid  by-law,  or  by  inserting  a 
provision  therefor  in  the  stock  certificates.1 

§  31.  Power  to  levy  Assessments  against  the  Stockholders  with 
the  Right  to  forfeit  their  Stock  for  Non-payment  thereof.  —  With 
some  few  exceptions  the  right  to  forfeit  stock  for  non-payment  of 
valid  assessments  levied  against  it  is  preserved  by  statute  in  most 
of  the  States  and  Territories.  Even  in  the  absence  of  such  statute 
the  right  to  forfeit  stock  for  non-payment  of  valid  assessments  when 
given  to  the  corporation  by  its  by-laws  will  probably  be  enforced  by 
the  courts.  In  any  event  the  common  law  remedy  would  exist, 
giving  the  corporation  the  right  to  recover  judgment  against  the 
delinquent  stockholders  for  the  amount  of  such  assessments.3 

In  all  cases  the  right  to  forfeit  stock  is  considered  to  be  merely 
a  cumulative  remedy.4  The  right  to  levy  assessments  upon 
stockholders  does  not  exist  after  payment  by  such  stockholders 
for  their  stock  in  full,  unless  the  power  to  do  so  is  conferred 
either  by  statute,  by  the  articles  of  incorporation,  or  by  the  unani- 
mous consent  of  all  the  stockholders.5  But  even  in  the  absence 
•of  express  power  to  declare  a  forfeiture  of  stock  for  non-payment, 
a  corporation  may  sue  for  amount  of  subscription  to  the  capital 
stock,  and  on  failure  to  collect  the  amount  subscribed  may  secure 
payment  by  sale  of  stock  subscribed.6 

On  the  general  subject  of  assessments  the  following  may  be  said  : 
provisions  for  the  forfeiture  of  capital  stock  for  the  non-payment 
of  assessments  must  be  just  and  reasonable  in  order  to  be  valid.7 
The  terms  of  the  statute  in  any  event  must  be  strictly  complied 
with.8  The  power  to  levy  assessments  rests  in  the  directors  by 
virtue  of  their  office  and  not  in  the  stockholders.9     Even  where 

i  Union  Bank  v.  Laird,  2  Wheaton  Neb.  642  ;  79  N.  W.  560;  Duluth  Club  v. 
(U.  S.),  390;  St.  Louis  Per.  Ins.  Co.  v.  McDonald,  74  Minn.  254;  76  N.  W.  1128; 
Goodfellow, 9  Mo.  149;  Van  Sands?;. Bank,  State  r.  Association,  23  N.  J.  Law,  195; 
26  Conn.  144 ;  Sargent  v.  Insurance  Co.,  Sullivan  Co.  Club  v.  Butler,  26  N.  Y. 
-25  Mass.  90.  See  also  Atchison  Bank  v.  Miscellaneous  Reports,  306  ;  Mayberry  v. 
Durfee,  118  Mo.  431 ;  24  S.  W.  133 ;  V.  G.  Meade,  80  Me.  27  ;  12  Atl.  635  ;  Price's 
B.  Co.  v.  Bloede,84Md.  129;  34Atl.  1127;  Appeal,  106  Pa.  St.  421;  Weeks  v.  Corn- 
Bishop  v.  Globe  Co.,  135  Mass.  132.  pany,  55  N.  Y.  Sup.  Ct.  1. 

3  San  Joaquin  v.  Beecher,  101  Cal.  70;  6  Chase  v.  Company,  5  Lea  (Tenn.),415. 
35  Pac.  349.  7  Crissey  v.  Cooke,  67  Kan.  20 ;  72  Pac. 

4  M.  F.  &  N.  Co.  v.  Hall,  121  Mass.  272  ;  54 1 . 

Raymond  v.  Caton,  24  111.  123;  Lesseps  v.  8  P.  G.  T.  R.  Co.  v.  Graham,  11  Met- 
Architects'   Co.,  4  La.  Ann.  316.  calf,  1. 

5  Enterprise    Ditch  Co.   v.  Moffitt,   58        9  Chouteau  Ins.  Co.  v.  Floyd,  74  Mo.  28a 

48 


CHAP.  I.]  DRAFTING   THE    CHARTER.  §  34 

the  statute  expressly  gives  power  to  the  stockholders  to  levy 
assessments  they  may  doubtless  delegate  this  power  to  directors.1 
Directors,  however,  cannot  lawfully  delegate  such  power  to 
ministerial  officers.2 

§  32.  Power  to  authorize  Voting  by  Proxy  at  Stockholders' 
Meetings.  —  At  common  law  the  right  of  stockholders  to  vote 
by  proxy  was  not  recognized.  The  right  in  order  to  be  available 
must  be  granted  either  by  statute,  charter,  or  appropriate  by-law.3 
Voting  by  proxy  is  not  however  per  se  unlawful.*  Therefore  the 
right  may  be  secured  to  stockholders  by  appropriate  by-law  duly 
passed  even  without  a  statute  authorizing  it.5 

§  33.  Power  to  permit  Cumulative  Voting  at  Election  of  Direc- 
tors. —  The  right  of  cumulative  voting  exists  where  a  stockholder 
has  a  number  of  votes  equal  to  the  number  of  shares  held  by  him 
multiplied  by  the  number  of  directors  to  be  chosen,  and  is  allowed 
to  cast  or  distribute  them  as  he  sees  fit.  The  purpose  thereof  is 
to  secure  minority  representation  on  the  board  of  directors.  To 
authorize  cumulative  voting  the  right  must  be  preserved  either  by 
constitutional,  statutory,  or  charter  provision  or  by  the  passage  of 
a  by-law  looking  to  that  end.6 

If  the  right  is  conferred  absolutely  by  constitutional  or  statu- 
tory provision,  it  cannot  be  taken  away  by  means  of  a  by-law 
or  resolution  denying  such  right  to  stockholders.7 

In  twenty-one  of  the  Commonwealths  the  right  to  cumulate 
votes  is  secured  to  stockholders  either  by  constitutional  enact- 
ment or  by  statutory  provision. 

§  34.  Power  to  issue  Stock  as  full  paid  in  Exchange  for  Property 
or  Services.  —  In  the  quaint  wording  of  an  English  case,  "  stock 
must  be  paid  for,  in  the  absence  of  constitutional  or  statutory 
provision  providing  otherwise,  "  in  meal  or  in  malt;"  that  is.  in 
money  or  in  money's  worth.9  Forty  of  the  States  have  enacted 
laws  authorizing  the  payment  of  stock  not  only  in  cash  bui    in 

1  Rives  v.  Company,  30  Ala.  92.  "  Pierce  v.  Commonwealth,  104  Pa.  St. 

2  In  re  County  Palatine  L.  &  D.  Co.,  150;  Sclimi.lt  v.  Mitchell,  101  Ky.  570; 
L.  R.  9  Ch.  691."  41  S.  W.  929;   State  V.  Stockier,  4;')  <).  St. 

8  Harvey  v.  Company,  118  N.  C.  693;  304;   13  N.  E.  279  ;  State  v.  Greer,  78  Mo. 

24  S.  E.  489  ;  People  v.  Crossley,  69  111.  188;  Baker's  Appeal,  109  Pa.  St.  n » i 

1 95 ;  McKee  v.  Company  (la.),  98 N.W. 609.  7  Tomlin  v.    Hank,    52   Mo,   App.    430j 

4  M.  &  O.  Railroad  Co.  v.  Nicholas,  98  Commonwealth  v.  Fetter,  L90  Pa  £ 

Ala.  92  ;  12  Sou.  723.  43  Atl.  220. 

'•>  State  v.  Tudor,    5    Day  (Conn.),  329;  '■>  Drummond'a  Case,  L.  II.   1  Ch.  772. 
Commonwealth  v.   Detwiler,    131   Pa.   St. 
614;   18  Atl.  990. 

4  49 


§  34   INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS.    [PART  I. 

services  or  property.  Some  of  the  States  —  for  example,  Ala- 
bama and  Virginia — have  somewhat  elaborate  provisions  on  the 
subject. 

Thus,  in  Alabama,  stock  may  be  issued  in  exchange  for  all 
such  real  and  personal  property  as  may  be  necessary  or  conven- 
ient for  the  efficient  construction,  operation,  and  maintenance  of 
its  works  or  plants,  lines,  shops,  factories,  or  other  buildings,  or 
for  the  conduct  and  management  of  its  business  or  as  its  purposes 
may  require.1 

In  Virginia  the  new  Incorporation  Act  authorizes  subscriptions 
to  the  capital  stock  to  be  paid  for  in  money,  land,  or  other  prop- 
erty, real  or  personal,  leases,  options,  mines,  minerals,  mineral 
rights,  patent  rights,  rights  of  water  or  easements,  contracts, 
labor,  or  services.3 

Even  in  those  few  Commonwealths  where  no  statutes  exist 
authorizing  the  payment  of  stock  in  property  or  services,  the 
courts  will  presume  that  corporations  have  inherent  power  to  pur- 
chase property  and  labor  and  pay  for  the  same  in  stock  instead 
of  money,  provided  the  transaction  whereby  the  stock  is  to  be 
issued  in  exchange  for  such  property  or  services  is  made  in  good 
faith  and  no  fraud  is  perpetrated  upon  stockholders  or  creditors.4 
The  statute  to  prohibit  absolutely  the  payment  of  subscriptions 
to  the  capital  stock  in  property  or  services  must  be  clearly  re- 
strictive in  character.5  The  only  effect  apparently  of  the  absence 
in  particular  Commonwealths  of  any  provision,  constitutional  or 
statutory,  authorizing  the  payment  of  stock  in  property  or  ser- 
vices, is  to  induce  the  courts  to  adopt  what  is  known  as  the  "  true 
value  rule " 6  rather  than  the  "  good  faith  rule." '  But  in  the 
Commonwealths  referred  to,  the  character  of  the  property,  labor, 
or  services  accepted  in  exchange  for  stock  must  be  strictly 
such  as  the  corporation  under  its  charter  has  the  power  to  ac- 
quire, and  when  property  is  so  taken  it  must  be  fairly  represented 
to  the  corporation  and  for  a  just,  lawful,  and  needed  equivalent 
for  the  money  subscribed.8 

1  See  Alabama  Session  Laws,   1903,  p.     Smith,  30  N.  Y.  116;  Shannon  v   Steven- 
395,  sec.  7,  subdiv.  c.  son,  173  Pa.  St.  419  ;  34  Atl.  218. 

B  See  Session  Laws  of  Virginia,    1903,         5  See  Knox  v.  Company,  86  Ala.  180;  5 
chap.  270.  So.  57S. 

4  Liebke  v.  Knapp,  79  Mo.  22  ;  Beach  v.         6  See  post,  sec.  104. 

See  post,  sec.  105. 


«  Liebke  v.  Knapp,  79  Mo.  22  ;  Powell 


50 


CHAP.  I.]  DRAFTING   THE    CHARTER.  §  35 

§  3o.  Power  to  dispose  of  Corporate  Assets  as  an  Entirety. — 
In  ten  of  the  Commonwealths  express  power  is  conferred  upon 
corporations  to  dispose  of  their  entire  corporate  assets  by  obtain- 
ing the  consent  of  a  certain  percentage  of  the  stockholders  to  such 
disposition.  Much  controversy  has  arisen  as  to  whether  or  not 
express  statutory  power  is  necessary  in  order  to  authorize  transfer 
by  a  corporation  of  the  entire  corporate  assets.  At  common  law 
neither  the  directors  nor  a  majority  of  the  stockholders  had  power 
to  sell  or  otherwise  transfer  all  of  the  property  of  an  acting  and 
prosperous  corporation  able  to  achieve  the  objects  of  its  creation 
as  against  the  dissent  of  a  single  stockholder.1 

The  view  is  taken  by  the  New  Jersey  court  in  Coler  v.  Com- 
pany3 that  the  sale  of  the  corporate  assets  as  an  entirety  is  equiv- 
alent to  a  dissolution,  and  therefore  can  only  be  done  through 
the  courts  under  statutory  authority.  Many  courts,  however,  take 
the  view  that  it  can  be  done  where  it  is  not  in  fraud  of  the  rights 
of  creditors  or  in  violation  of  charter  or  statutory  restrictions, 
and  this,  too,  by  a  majority  of  the  stockholders  against  the  dis- 
sent of  a  minority  where  the  exigencies  of  the  business  seem  to> 
require  it.4  Thus,  it  has  been  asserted  that  "  it  is  a  well  settled 
rule  that  a  strictly  private  corporation  has  the  same  right  to  dis- 
pose of  its  property  that  an  individual  has,  and  that  when  insol- 
vent or  in  a  failing  condition  it  may  sell  all  thereof  without 
the  consent  of  all  of  the  stockholders.  It  is  the  general  rule, 
however,  that  neither  the  directors  nor  a  majority  of  the 
stockholders  of  a  corporation  have  power  at  common  law  to 
sell  or  otherwise  transfer  all  its  property  while  the  corporation 
is  a  going,  prosperous  concern  against  the  dissent  of  any  share- 
holder." 5 

It  may  be  added  in  this  connection  that  the  right  to  exist  as  a 

v.  Murray,  3  N.   Y.  App.  Div.  273 ;    38  Co.  v.  M.  O.  P.  Co.,  89  Fed.  529 ;  Metcalf 

N.  Y.  Sup.  233;  Id.   157   N.   Y  717;  53  v.  A.  S.  F.  Co.,  122  Fed.   11.'-;  Traer  v. 

N.  E.  1 130  ;  Kimball  v.  Company,  69  N.  II.  Company  (la.),  99  N.  W.  290. 
485;  45  Atl.  253;   Montgomery  t'.   Com-  8  64  N.  J.  Eq.  117  ;  53  Atl.  680. 

pany,  48  N.  Y.  App.  Div.   12;  62  N.  Y.         4  Treadwelli>.  Company,  7  Gray  (Mass.), 

Sup.  606;  Id.    168  N.  Y.  657;  61  N.  E.  393;  Martin  v.  Zellerbach,  38  Cal.  300; 

1131.  Miners'  Ditcli  Co.  v.  Zellerbach,  37  Cal. 

1  Forrester  v.  Company,  21  Mont.  544  ;  543;  Featherstonhangh  v.  Company,  L.  R. 

55  Pac.  229;  Idem,  74  Pac.  1088;   People  l  Eq.  318;  Bartholomew  v.  Company,  69 

v.    Ballard,  134  X.  Y.  269;  32  N.   E.   54  ;  Conn.  521  ;  38  Atl.  45. 
California  Bank  v.  Kennedy,    167    U.   S.  6  Traer   v.  Compauy  (la.),  99  N.  W. 

862;  4'j  L.  E.  198;  B.  &  M.  C.  C.&S.  M.  290. 

51 


§  36    INCORPORATION   AND   ORGANIZATION   OP   CORPORATIONS.    [PART  I. 

corporation  is  not  alienable.1  The  sale  of  all  the  corporate  prop- 
erty does  not  operate  to  dissolve  the  corporation.2 

S  36.  Power  to  voluntarily  dissolve  the  Corporation  without 
Recourse  to  the  Courts. —  The  dissolution  of  a  corporation  is  a 
peculiar  function  that  rests  primarily  in  the  legislature,  and  is 
conferred  upon  courts  or  upon  the  corporation  itself,  only  by 
explicit  legislative  authority.3  Stockholders,  in  the  absence  of 
statutory  provision,  cannot  extinguish  the  corporate  charter  or 
dissolve  the  corporation,  nor  can  a  court  of  equity  accomplish  a 
similar  result  at  their  instance.4  In  all  the  States  some  provision 
is  made  for  dissolution  of  corporations.  For  example,  in  Alabama, 
Connecticut,  New  Jersey,  North  Carolina,  Virginia,  and  West 
Virginia  the  incorporators  have  the  right  to  surrender  the  charter 
before  organization.  In  twenty-seven  of  the  Commonwealths 
corporations  may  be  dissolved  under  statutory  authority  without 
recourse  to  the  courts. 

The  doctrine  that  dissolution  can  only  be  effected  by  the  joint 
act  of  the  State  and  corporation  is  set  forth  in  a  Massachusetts 
case  as  follows : 6  "Charters  are  in  many  respects  compacts  be- 
tween government  and  corporators.  And  as  the  former  cannot 
deprive  the  latter  of  their  franchises  in  violation  of  the  compact, 
so  the  latter  cannot  put  an  end  to  the  compact  without  the  con- 
sent of  the  former.  It  is  equally  obligatory  on  both  parties. 
The  surrender  of  the  charter  can  only  be  made  by  the  formal  act 
of  the  corporation ;  and  will  be  of  no  avail  until  accepted  by  the 
government.  There  must  be  the  same  agreement  of  the  parties 
to  dissolve,  that  there  was  to  form  the  compact.  It  is  the  accept- 
ance which  gives  efficacy  to  the  surrender.  Dissolution  of  a 
corporation,  it  is  said,  extinguishes  all  its  debts.  The  power  to 
dissolve  itself  by  its  own  act  would  be  a  dangerous  power,  and  one 
which  cannot  be  supposed  to  exist." 7 

In  this  connection  it  may  be  observed  that  the  stockholders 

1  Detroit  Citizens'  Street  Ry.  Co.  v,  8  Olds  v.  Company  (Mass.),  70  N.  E. 
Common  Council,  125  Mich.  673 ;  85  N.  W.     1022. 

96  ;   Pearce  v.  R.  R.,  21    How.  441  ;    16  4  Benedict  v.   Company,  49  N.  J.  Eq. 

L.  E.    184;    State  v.   Company,  40  Kan.  235;  23  Atl.  485. 

96;  19  Pac.  349.  6  Boston   Glass    Manufactory    Co.    v. 

2  Miners'  Ditch  Co.  v.  Zellerbach,  37  Langdon,  24  Pick.  49. 

Cal.  543 ;  Sullivan  v.  Company,  39  Cal.  7  See  also  Davis  v.  Company,  87  Ala. 

459.  633;  6  Sou.  140. 

52 


CHAP.  I.]  DRAFTING   THE    CHARTER.  §  37 

alone  have  power  to  surrender  the  charter.1  It  will  be  re- 
membered, of  course,  that  the  expiration  of  the  time  limited  by 
the  charter  as  a  corporation's  term  of  existence  is  held  in  most 
jurisdictions  to  result  in  the  dissolution  of  such  a  corporation.2 
But  neither  insolvency  nor  sale  of  all  of  the  corporate  property, 
nor  cessation  of  business  operates  to  dissolve  the  corporation.3 

But  in  the  absence  of  any  provision  in  the  charter  limiting  cor- 
porate existence,  the  corporation  is  entitled  to  perpetual  life.4  If 
the  articles  provide  for  a  longer  period  of  corporate  existence  than 
the  law  allows,  the  excess  is  void.5  In  many  of  the  States  statutes 
exist  providing  that  the  corporation  shall  continue  in  existence 
for  periods  ranging  from  three  to  five  years  after  the  expiration 
of  the  time  limited  for  its  existence  for  the  purpose  of  winding  up 
its  affairs.6 

A  majority  of  the  States  delegate  to  the  courts  the  power  to 
dissolve  the  corporation  on  application  of  stockholders  or  credi- 
tors." The  fact  that  certain  States  make  the  directors  trustees 
for  creditors  on  dissolution  does  not  necessarily  take  away  the 
jurisdiction  of  courts  of  equity  to  appoint  a  receiver.8  Many 
States  have  statutes  providing  that  upon  the  expiration  of  the  time 
limited  by  their  charter  as  the  duration  of  their  corporate  exist- 
ence, they  shall  nevertheless  be  continued  for  a  certain  period  of 
time  in  order  to  permit  of  the  winding  up  of  the  corporate  affairs. 
Without  such  statutory  provisions  suits  cannot  be  maintained 
against  the  corporation  after  such  period  has  expired.9 

§  37.  Power  to  insert  in  the  Charter  Provisions  for  the  Regula- 
tion of  the  Internal  Affairs  of  the  Corporation.  —  The  incorpora- 
tion acts  of  eighteen  of  the  States  contain  provisions  relative 
to  the  contents  of  certificates  of  incorporation,  authorizing  the 
insertion  therein  of  provisions  for  the  regulation  of  the  business 
of  the  corporation,  or  for  the  purpose  of  defining  or  limiting  the 
powers  of  the  corporation,  its  officers,  directors,  and  stockholders. 

1  Jones  v.  Bank,  10  Col.  464;  17  Pac.  •  Foster  i\  Bank,  16  Mass.  24.");  Naah- 
272;  Barton  v.  Association,  114  Ind.  226  ;  ville  Hank  v.  Petway,  3  Hum.  (Teun.)  522. 
l»l  x.  I-:.  486.  7  See  Miner  v.  Company,  93  Mich.  97  ; 

2  Mason  v.  Company,  25  Fed.  882.  53   N.  W.  218  ;   Wheeler  v.  Company,  143 
:i  Davis  v.  Company, 87  Ala.  633  ;  6  So.     111.  197  ;  32  N.  E.  420. 

140.  8  City  Pottery  Co.  v.  Yates,  37  N.  J. 

4   F.  L.  S.  Co.  v.  Clowes,  3  N.  Y.  470.  Eq.  543. 

•  People  v.  Cheeseman,  7  Col.  376 ;  3  °  Nelson  ?>.  Hubbard,  %   Ala.  238;  11 

Par.  716.  Sou.  428. 

53 


§  37   INCORPORATION   AND    ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

Unless  the  law  expressly  permits  the  insertion  of  such  provisions 
in  the  certificate  of  incorporation,  State  officials  are  justified  in 
refusing  to  accept  and  file  certificates  containing  such  provisions. 
This  generally  on  the  ground  that  in  the  absence  of  statutory 
provision  so  authorizing,  they  are  properly  the  subject  of  by-laws 
and  not  proper  for  insertion  in  the  certificate  of  incorporation.1 

Leaving  out  of  consideration  the  fact  of  acceptance  by  State 
officials,  and  approval  by  them  of  certificates  of  incorporation 
containing  such  provisions  as  are  here  referred  to,  when  there  is  no 
statute  authorizing  the  same,  the  following  may  be  said :  The 
general  test  as  to  whether  provisions  not  called  for  by  the  statutes 
are  valid  when  inserted  in  certificates  of  incorporation  must  be 
determined  from  their  character.  If  they  are  not  powers,  but  are 
merely  in  the  nature  of  by-laws,  they  are  invalid  as  not  being 
called  for  by  the  statute.  If  they  are  powers,  but  not  authorized 
by  statute,  to  permit  such  insertion  in  the  certificate  of  incorpora- 
tion would  be  equivalent  to  saying  that  the  legislature  had  clothed 
the  incorporators  with  a  number  of  their  legislative  functions.2 
On  this  general  subject  the  opinion  of  the  Supreme  Court  of  Ala- 
bama in  a  leading  case  in  that  State  is  instructive :  "  It  is  appar- 
ent," observes  the  court,  "  that  the  creation  of  corporations  under 
general  law  rather  than  by  special  act  was  not  intended  to  work 
any  essential  change  in  their  nature  and  character.  Whether 
deriving  existence  from  a  special  law,  or  from  incorporation  under 
the  general  law,  the  corporation  is  an  artificial  being  of  legisla- 
tive creation,  having  no  other  powers  or  properties  than  such 
as  the  law  confers,  or  which  may  be  incidental  to  their  very  ex- 
istence. The  mode  of  incorporation  the  statutes  have  carefully 
prescribed.  The  persons  proposing  to  be  incorporated  must  file 
and  cause  to  be  recorded  in  a  designated  public  office  a  declaration 
in  writing,  stating  the  name  of  the  corporation,  the  objects  for 
which  it  is  formed,  the  amount  of  the  capital  stock,  the  number 
of  shares  into  which  it  is  divided,  the  names  of  the  stockholders, 
and  the  number  of  shares  each  may  hold.  The  office  and  the 
effect  of  the  declaration  the  statutes  do  not  leave  in  doubt  — 

1  In  re  Application  for  charter,  10  Phil.  N.   Y.    546;    G.    L.   D.    Co.    v.    Perkins 

Rep.  130;  Van  Pelt  v.  Gardner,  54  Neb.  (Texas),  26  S.  W.  256;  Albright  v.  Asso- 

701;  75  N.  W.  874;  Bent  v.  Underdown,  60  ciation,  102  Pa.  St.  411  ;  Shoun  v.  Arm- 

N.  E.  307  ;  156  Ind.  516 ;  Heck  v.  McEwen,  strong  (Term.),  59  S.  W.  790. 

12  Lea,  97;  T.  A.  L.  Co.  v.  Massey,  56  2  People  ex  rel.  v.  C.  G.  T.  Co.,  130  111. 

.S.  W.  35;  E.  P.  R.  Co.  v.  Vaughan,  14  268;  22  N.  E.  798. 

54 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  38 

when  recorded,  the  persons  signing  it  and  their  successors  become 
a  body  corporate  by  the  name  stated  therein  and  with  the  powers 
conferred  by  law.  It  is  an  acceptance  by  the  corporation,  under 
the  name  designated,  for  the  objects  expressed,  of  the  corporate 
powers  and  capacity  the  law  confers,  and  a  statement  of  the  prin- 
cipal constituents  of  the  corporation,  —  the  amount  of  the  capital 
stock,  the  names  of  the  stockholders,  and  the  quantity  of  interest 
each  has  in  the  capital  stock.  There  is  no  authority  of  law  for 
introducing  more  into  it,  and  if  more  be  introduced,  it  is  mere 
surplusage,  not  adding  to  or  detracting  from  the  force  of  the 
declaration.  A  controlling  purpose,  as  we  suppose,  in  authorizing 
or  in  compelling  the  creation  of  corporations  under  general  laws, 
is  to  secure  uniformity  and  equality  of  corporate  powers,  func- 
tions, and  privileges  ;  that  all  corporations  of  the  same  class, 
formed  for  like  purposes,  should  possess  the  same  capacities 
and  properties,  and  exercise  and  enjoy  the  same  franchises  and 
privileges.  Unless  it  was  intended  to  work  a  radical  change  in 
the  nature  and  character  of  these  artificial  beings,  the  mere  crea- 
tures of  the  law,  and  to  subvert  the  whole  theory  which  has  pre- 
vailed in  reference  to  them,  it  cannot  have  been  contemplated 
that  they  should  for  themselves  create  powers  and  privileges  by 
declaration  or  reservation,  whether  the  declaration  or  reservation 
is  expressed  in  the  articles  of  incorporation  or  in  the  by-laws 
ordered  by  the  corporators  for  their  government.  Such  declara- 
tions or  reservations  would  soon  become  more  liberal  and  diverse 
than  was  the  liberality  and  diversity  of  the  grants  of  corporate 
powers  by  special  legislative  enactment,  the  evil  it  was  intended 
to  remove.  Of  every  corporation  formed  under  the  general  law, 
the  law  itself  becomes  the  charter,  defines  and  enumerates  the 
powers  which  are  to  be  exercised,  the  nature  and  extent  of  cor- 
porate franchises  and  privileges.  The  declaration  of  incorpora- 
tion, the  by-laws  adopted  for  corporate  government,  do  not  form 
the  charter,  or  define  or  enumerate  the  corporate  powers.  These 
are  the  acts  of  the  corporators.  The  charter  is  the  grant  from 
the  sovereign  power  of  the  State,  and  by  that  source  only  can  be 
varied  or  enlarged."  * 

§  38.  Power  to  authorize  Directors  to  adopt  By-Laws.  —  In  a 
number  of  the  States  statutes  exist  authorizing  the  directors  to 
adopt  by-laws  under  certain  conditions.     The  conditions  here  re- 

1  G.  L.  &  II.  Ins.  Co.  v.  Kampcr,  73  Ala.  325. 

55 


§  40   INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

ferred  to  are  usually  either  that  the  right  referred  to  should  be 
expressly  inserted  in  the  certificate  of  incorporation,  or,  in  lieu 
thereof,  that  the  stockholders  expressly  delegate  this  power  to 
the  directors.  Unless  the  statute  or  charter  provides  otherwise, 
the  by-laws  must  be  adopted  by  the  stockholders.1  However, 
where  the  right  to  adopt  by-laws  is  expressly  limited  to  the  direc- 
tors, it  is  exclusive. 

§  39.  Power  to  authorize  Appointment  of  Executive  Committee 
from  the  Board  of  Directors.  —  In  Connecticut,  Delaware,  Massa- 
chusetts, Nevada,  New  Jersey,  Virginia,  and  West  Virginia  stat- 
utes exist  expressly  authorizing  directors  to  appoint  an  executive 
committee  from  their  own  number  to  whom  may  be  delegated,  to 
such  extent  as  shall  be  provided  in  the  by-laws,  any  of  the  powers 
of  the  board  of  directors.  There  has  as  yet  been  no  fair  test  in 
the  courts  as  to  the  validity  of  such  statutes  where  an  attempt  has 
been  made  by  the  directors  to  practically  delegate  all  their  powers  to 
an  executive  committee.  A  reasonable  view  of  the  matter  would 
seem  to  be  that  where  the  statute  clearly  conveys  such  power  it  is 
valid  when  exercised  by  an  executive  committee  duly  appointed 
from  the  full  board  of  directors  pursuant  to  the  statute  in  such 
case  made  and  provided.3 

The  power  of  the  board  of  directors  is  not  a  delegated  authority, 
and  when  the  transaction  of  the  business  of  the  company  will  be 
facilitated  by  the  appointment  of  ah  executive  committee  such 
appointment  may  unquestionably  be  made.4 

§  40.  Power  to  enlarge  or  diminish  Corporate  Powers.  — The  right 
here  referred  to  becomes  one  of  importance  only  in  those  States 
wherein  it  is  permitted  to  insert  specific  corporate  powers  in  the 
articles  of  incorporation.  The  powers  here  referred  to  are  such, 
for  example,  as  the  right  of  the  corporation  to  acquire  its  own 
stock  ;  to  hold  stock  and  bonds  in  other  corporations ;  to  delegate 
to  directors  power  to  adopt  by-laws,  etc.  It  will  be  found  that 
wherever  such  a  right  exists  the  power  to  amend  will  be  found 
sufficiently  broad  to  permit  of  the  enlargement  or  diminishing  of 

l  See  Norton,  etc.  Co.  v.  Wysong,  51  28  N.  E.  467 ;  Black,  etc.  Co.  v.  Hol- 
Ind.  4;  Salem  Bank  v.  Bank,  17  Mass.  way,  85  Wis.  344 ;  55  N.  W.  418  ;  Andres 
1 ;  Watson  v.  Company,  56  Mo.  App.  145;  v.  Fry,  113  Cal.  124  ;  45  Pac.  534  ;  Bank 
State  v.  Curtis,  9  Nev.  325.  v.  Walton  Iron  Co.,  30  Bull.  (Ohio)  382. 

3  S.  E.  L.  Co.  v.  Bank,  127  N.  Y.  517  ;  4  Leavitt  v.  Company,  3  Utah,  265;  1 

Pac.  356. 

56 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  43 

corporate  powers  by  complying  with  the  terms  of  the  statute 
relative  to  such  amendments.1 

§  41.  Power  to  change  Par  Value  of  Shares.  —  Where  the  charter 
fixes  the  number  and  par  value  thereof,  a  corporation  cannot  in- 
crease or  diminish  the  par  value  of  its  shares  without  legislative 
sanction.2  If  however  the  certificate  of  incorporation  says  nothing 
as  to  the  number  and  par  value  of  shares,  they  may  doubtless  be 
changed  by  the  stockholders  of  the  corporation  without  legislative 
sanction.3 

The  legal  effect  of  a  change  in  the  number  of  shares  without 
any  corresponding  increase  or  decrease  in  the  par  value  thereof, 
is  to  increase  or  decrease  the  capital  stock,  and  this  can  only  be 
done  by  permission  of  the  legislature.4 

In  thirty-six  of  the  States  the  par  value  of  the  capital  stock  may 
be  any  amount,  while  in  the  remainder  such  par  value  is  limited 
from  amounts  ranging  from  one  dollar  to  one  hundred  dollars  per 
share.  In  some  few  of  the  States  it  will  be  noted  that  the  pro- 
visions of  the  statutes  limiting  amendments  fail  to  authorize 
changes  in  the  par  value  of  the  shares  of  capital  stock. 

§  42.  Power  of  Bondholders  to  vote  at  Election  of  Directors.  — 
Very  few  of  the  States  have  enacted  statutes  giving  to  bondholders 
the  right  to  participate  in  the  election  of  directors.  Virginia 
and  Delaware  are  the  exceptions  to  the  general  rule.  Most  of  the 
States  provide  that  the  board  of  directors  shall  be  elected  by 
the  stockholders,  and  thus  by  implication  forbid  the  giving  of  the 
right  to  bondholders  to  vote  at  such  election.7  However,  if  neither 
by  constitutional  or  statutory  provision  bondholders  are  barred 
from  participating  in  the  election  of  directors,  such  right  may  be 
bestowed  upon  them  either  by  provision  therefor  in  the  charter  or 
by  proper  by-law  duly  adopted.8 

§  43.  Power  to  classify  Directors.  —  Ordinarily  the  tenure  of  di- 
rectors is  fixed  by  statute,  and  where  so  fixed  these  provisions  are  of 
course  controlling.     If  the  statute  requires  directors  to  be  elected 

i  Peoria,  etc.   Co.    v.  Preston,  35    la.  3  S.&K.  Ry.Co.  v.  dishing,  45  Me.  534. 

115  ;  P.,  etc.  P.  R.  C>>.  v.  (irillin,  21  Barb.  4  Droitwich  Patent  Salt  Co.  v.  Curzon, 

454  ;  Pac.  R.  Co.  v.  Hughes,  22  Mo.  291.  L.  R.  3  Ex.  35. 

2  Droitwich  Patent  Sail  Co.  v.  Curzon,  7  Durkee  v.   People,   155   111-  354;  40 

L.  It.  3  Ex.  35  ;  Tscbumi  v.  Hills,  6  Kan.  N.  E.  626. 

App.  549  ;  51   Pac.  619  ;  S.  M.  D.  Cor.  v.  s  gtate  „.  McDaniel,  22  0.  St.  354. 
Ropes,  6  Pick.  (Mass.)  23. 

57 


§  46    INCORPORATION    AND    ORGANIZATION    OP    CORPORATIONS.    [PART  I. 

annually,  this  by  implication  prohibits  the  classification  of  direc- 
tors for  terms  in  excess  of  the  statutory  limit.1  In  a  large  num- 
ber of  the  States  statutes  exist  expressly  authorizing  classification 
of  directors. 

If  the  statute  does  not  require  annual  election  of  directors,  there 
would  appear  to  be  nothing  illegal  in  a  corporation's  classifying  its 
directors  in  any  manner  it  sees  fit  so  to  do,  provided  (in  the  ab- 
sence of  statutory  regulations)  directors  hold  their  office  at  the 
pleasure  of  the  corporation. 

§  44.  Power  to  amend  Articles  before  Organization.  —  As 
has  already  been  seen,  the  power  to  amend,  if  it  exists  at  all, 
must  be  derived  from  the  legislature.  Very  few  of  the  Common- 
wealths have  granted  to  incorporators  the  right  to  amend  articles 
of  incorporation  before  organization.  Statutes,  however,  to  that 
effect  exist  in  Alabama,  Connecticut,  New  York,  New  Jersey, 
North  Carolina,  and  Virginia. 

§  45.  Power  to  surrender  Charter  before  Organization.  —  It  is 
often  an  advantage  to  a  corporation  which  does  not  care  to  avail 
itself  of  the  right  to  actively  engage  in  business,  to  surrender  its 
charter  to  the  State  before  organization,  without  going  through 
the  expensive  and  usually  complicated  proceedings  incident  to 
dissolution.  Such  right  is  expressly  given  in  Connecticut,  New 
Jersey,  North  Carolina,  Virginia,  and  West  Virginia.3 

§  46.  Power  given  to  Minority  Stockholders  to  compel  Purchase 
of  their  Holdings  upon  Consolidation.  —  In  the  States  of  Alabama, 
Connecticut,  Massachusetts,  Delaware,  and  New  York  statutory 
protection  is  afforded  to  minority  stockholders  in  case  the  cor- 
poration has  consolidated  with  another.  The  Connecticut  statute 
may  be  briefly  summarized  as  an  example  of  such  statutes.4 

The  act  provides  that  any  stockholder  in  any  corporation  con- 
solidating, who  at  the  time  of  such  consolidation  objects  thereto 
in  writing,  may,  within  ten  days  after  the  agreement  of  consolida- 
tion has  been  filed  for  record  in  the  office  of  the  Secretary  of 
State,  demand  in  writing  from  the  consolidated  corporation  pay- 
ment of  his  stock ;  and  such  corporation  shall  within  three 
months  thereafter  pay  him  the  value  of  his  stock  at  the  date  of 

i  State  v.  McCullough,  3  Nev.  202.  428 ;  Law  v.  Rich,  47  W.  Va.  634  ;  35  S.  E. 

3  Mumma  v.  Company,  8  Pet.    LI.   S.  858. 

281 ;  Taylor  v.  Holmes,  14  Fed.  Rep.  498;  4  Sec.    79,   chap.    194,   of  the   Session 

Houston  v.  Jefferson  College,  63  Pa.  St.  Laws  of  1903. 

58 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  47 

such  consolidation.  In  case  of  disagreement  as  to  the  value 
thereof,  such  value  shall  be  ascertained  by  three  disinterested 
persons,  to  be  chosen,  one  by  the  stockholder,  one  by  the  directors 
of  the  consolidated  corporation,  and  the  third  by  the  two  thus 
selected ;  and  in  case  their  award  is  not  paid  within  thirty  days 
from  this  date  it  shall  become  a  debt  of  said  consolidated  corpora- 
tion and  may  be  collected  as  such.  Upon  receiving  payment  of 
the  amount  awarded,  such  stockholder  shall  transfer  his  stock  to 
the  consolidated  corporation,  which  shall  dispose  of  it  on  the  best 
terms  attainable.1 

§  47.  Incidental  Powers,  Definition  and  Enumeration  of.  —  An 
incidental  power  is  one  that  is  directly  necessary  or  proper  to  the 
execution  of  an  express  power,  and  not  one  that  has  a  slight  or 
remote  relation  to  it.2  The  term  expresses  those  powers  which 
flow  necessarily  out  of  the  exercise  of  the  express  powers  con- 
ferred by  statute  or  by  charter.3 

The  exercise  of  a  power  that  might  be  beneficial  to  the  prin- 
cipal business  of  the  corporation  is  not  necessarily  incident  to  it.4 
The  principal  incidental  powers  may  be  enumerated  as  follows  : 
(1)  power  to  make  contracts ;  (2)  power  to  borrow  money  ;  (3) 
power  to  give  and  accept  customary  evidences  of  debt ;  (4)  power 
to  mortgage  or  pledge  real  and  personal  property ;  (5)  power 
of  amotion. 

The  implied  powers  which  a  corporation  has  in  order  to  carry 
into  effect  those  expressly  granted,  and  to  accomplish  the  pur- 
poses of  its  creation,  are  not  limited  to  such  as  are  indispensable 
for  these  purposes,  but  comprise  all  that  are  necessary  in  the 
sense  of  appropriate,  convenient,  and  suitable,  including  the  right 
of  reasonable  choice  of  means  to  be  employed.  Acts  of  a  cor- 
poration which  if  standing  alone  or  engaged  in  as  a  business 
would  be  beyond  its  implied  powers,  are  not  necessarily  ultra  vires 
when  they  are  incidental  to  or  form  part  of  an  entire  transaction 
which  in  its  general  scope,  is  within  the  corporate  purpose.  The 
validity  of  such  a  transaction  is  to  be  determined  from  its  general 

1  See  Lanman  v.  Company,  30  Pa.  St.  798;  People  v.  Company,  175  111.  125  ;  51 
42;  Mowrey  v.    Company,    17  Fed.  Cas.     N.  E.  664. 

No.  9891;   4  Bissell,  78;  Pittsburg,  etc.  3  See  U.  M.  Co.  v.   Bank,  2  Col.   248; 

By.  Co.  i'.  Garrett,  50  O.  St.  405  ;  34  N.  E.  Wright  v.  Hughes,  1 19  Ind.  324  ;  21  N.  F. 

493.  907. 

2  Hood  v.  Company,  42  Conn.  112;  ■  Nicollet  Nat.  Bank  v.  Company,  71 
People  v.  Company,  130  111.  268  ;  22  N.  E.  Minn.  413  ;  74  N.  W.  160. 

59 


§  52   INCORPORATION   AND   ORGANIZATION    OF   CORPORATIONS.    [PART  I. 

character  considered  as  a  whole  rather  than  by  segregation  into 
individual  parts  and  each  regarded  as  distinct  from  the  other.1 

§  48.  Power  to  make  Contracts.  —  A  corporation  is  a  creature 
of  law,  and  may  do  any  act  or  thing  under  contract  the  same  as 
natural  persons  might  do,  subject  to  the  rights  conferred  on  it  by 
the  law  of  its  creation  or  by  its  charter.2  Where  chartered  in 
one  State  for  any  purpose,  it  may  lawfully  make  a  contract  in 
furtherance  of  that  purpose  in  any  other  State  where  not  pro-* 
hibited  by  the  laws  thereof.3 

§  49.  Power  to  borrow  Money.  —  The  power  to  borrow  money 
in  carrying  out  the  purposes  of  the  corporation's  organization  is 
one  of  the  incidental  corporate  powers.4  In  this  connection  it 
may  be  said  that  the  power  to  borrow  money  has  been  held  to 
imply  the  power  to  issue  bonds.5  However  that  may  be,  in  addi- 
tion to  an  enumeration  in  the  statute  of  the  power  to  borrow 
money,  a  majority  of  the  business  corporation  acts  expressly 
confer  the  right  upon  corporations  to  issue  bonds. 

§  50.  Power  to  give  and  accept  Customary  Evidences  of  Debt.  — - 
This  incidental  power  includes  the  right  of  corporations  to  make 
notes  or  bills  of  exchange,  to  accept  drafts  and  notes,  and  to  draw 
checks.7 

§  51.  Power  to  mortgage  and  pledge  Real  and  Personal  Property 
—  Every  corporation  has  the  incidental  power  to  mortgage  and 
pledge  its  real  and  personal  property  in  order  to  procure  and 
secure  necessary  loans  to  be  made  to  the  corporation.8  It  is 
sometimes  said  that  a  corporation  has  power  to  pledge  both  its 
issued  and  unissued  shares.9 

§  52.  Power  of  Amotion.  —  The  power  of  amotion  has  refer- 
ence to  the  removal  of  officers  and  directors.     The  term  "  dis- 

1  C.  0.  N.  G.  F.  Co.  v.  Company,  60  7  Moss  v.  Averell,  10  N.  Y.  449  ;  Lucas 
Ohio,  96;  53  N.  E.  711;  Porter  v.  Company  v.  Pitney,  27  N.  J.  Law,  221  ;  Smead  v. 
(Mont.),  74  Pac.  938.  Company,   11    Lud.   104;  Strauss  v.  Com- 

2  Hand  v.  Company,  143  Pa.  St.  408;  pany,  52  O.  St.  59;  Morris  v.  Cheney,  51 
22  Atl.  709  ;  People  v.  Company,  70  N.  Y.  111.  451. 

569  ;  MacGinniss  v.  Company  (Mont.),  75  8  State  v.  Company,  61    Kan.  547  ;   60 

Pac.  89.  Pac.  337  ;    Farmers'   Bank  v.   Company, 

8  Hall  v.  Company,   91   Ala.   363;    8  108  Ky.  447 ;  56  S.  W.  719 ;  Savings  Trust 

Sou.  348.  Co.  v.  Company,  112  Fed.  693. 

4  See  Ward  v.  Johnson,  95  111.  215;  9  See  U.  Savings  Ass'n  v.  Seligman, 
Wright  v.  Hughes,  119  Ind.  324;  21  N.  E.  92  Mo.  635  ;  15  S.  W.  630;  Burgess  v. 
907.  Seligman,   107  U.  S.  20;  2  S.  Ct.  10. 

5  Commonwealth  v.    Smith,  10   Allen 
(Mass.),  448;  Smith  v.  Law,  21  N.  Y.  296. 

60 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  53 

franchisement "  has  reference  solely  to  the  deprivation  of  the 
right  to  vote  as  against  stockholders.1  The  right  is  delegated  by 
statute  to  the  stockholders  in  fifteen  of  the  Commonwealths.  In 
the  absence  of  such  statute  there  is  no  power  in  the  stockholders 
to  remove  directors  before  the  expiration  of  their  allotted  terms, 
except  for  cause,  provided  such  terms  are  fixed  by  statute.3 

It  seems  to  have  been  the  rule  of  the  common  law  that  every 
corporation  had  an  implied  power  to  remove  directors  for  cause 
when  their  terms  of  office  were  not  prescribed  by  statute.4  In 
Xew  York  it  has  been  held  that  the  power  to  remove  directors 
may  be  covered  by  by-law.5 

The  main  grounds  which  justify  amotion  where  no  statute 
exists  limiting  the  same,  are  the  conviction  of  crime  on  the  part  of 
directors,  misconduct  in  office,  and  violation  of  statutory  provi- 
sions.6 If  the  charter  or  statute  provides  steps  which  must  be 
taken  to  remove  directors,  such  statute  must  be  strictly  followed." 
In  the  exercise  of  this  power  the  stockholders  meet,  charges  must 
be  preferred,  and  the  director  removed  by  a  majority  vote.8 
Equity  will  not  interfere  in  such  matters  in  the  absence  of  usurpa- 
tion or  gross  negligence.9 

§  53.  The  Modern  Doctrine  of  Ultra  Vires. — To  define  in  a 
general  way  the  ancient  doctrine  of  ultra  vires  is  to  say  that  a 
contract  of  a  corporation  which  is  unauthorized  by  or  in  violation 
of  its  charter,  or  entirely  outside  of  the  scope  of  the  express 
purposes  of  its  creation  or  beyond  the  powers  granted  to  it  by  the 
charter  or  by  statute,  is  void  in  the  sense  of  being  no  contract  at 
all,  because  of  a  total  want  of  power  to  enter  into  it;  that  such 
contract  will  not  be  enforced  by  any  species  of  action  in  a  court  of 
justice  ;  that  being  void  ab  initio,  it  cannot  be  made  good  by 
ratification  or  by  any  succession  of  renewals,  and  that  no  perform- 
ance on  either  side  can  give  validity  to  the  unlawful  contract,  or 
form  a  foundation  of  any  right  of  action  upon  it.10 

1  White  v.  Brownell,  4  Abb.  Pr.  n.  s.  8  Rex  v.  Taylor,  3  Salk.  231  ;  R.  E.  G. 

162.  v.  Smith,  10  Wood,  74;  DeLacey  v.  Com- 

;  Nathan   v.  Tompkins,  82  Ala.  437;  pany,   1    Hawks  (N.  C),  274;    Pordy  v. 

2  So.  747.  Ass'n  (Mo.  Ap.),  74  S.  W.  486. 

4  Fawcette  v.  Charles,  13  Wend.  473.  8  Baker  D-  Backus,  32  111.  79;  Park  v. 

6  Douglass  v.  Company,  118  N.  Y.  484;  Grant   Locomotive   Works,  40  N.  J.    Eq. 

23  N.  K.806.  114;   19  Atl.  62;    Id.  45    N.    .1.    Eq.   241, 

6  Rex  v.  Richardson,  1  Burr.  517.  362;  3  Atl.  162. 

7  State  v.  Trustees,  etc.,  5  Ind.  77.  i"  See  Thompson  on  Corporations,  vol. 

v.  §  r>96s  ;  for  history  of  doctrine  of  ultra 

Gl 


§  53    INCORPORATION   AND    ORGANIZATION   OF    CORPORATIONS.    [PART  I. 

The  necessities  of  modern  business  and  the  arrival  by  the  courts 
at  a  better  conception  of  the  true  relations  governing  the  matter, 
have  brought  about  radical  changes  in  the  doctrine  as  here 
stated.  What  we  propose  to  do  in  this  connection  is  to  set  forth 
what  may  be  termed  "  the  modern  doctrine  of  ultra  vires. "  Pre- 
liminary to  this  a  statement  should  be  made  showing  how  the 
doctrine  of  ultra  vires  originated,  and  how  it  came  to  be  applied 
from  time  to  time. 

In  the  early  days  corporations  were  created  mainly  for  public 
purposes,  and  it  was  in  connection  with  quasi-public  corporations 
that  the  doctrine  of  ultra  vires  first  originated.  In  view  of  this 
fact,  as  has  been  well  stated,  there  was  no  reason  why  the  doc- 
trine should  ever  have  been  applied  to  private  corporations  not 
formed  for  public  purposes.1 

The  grounds  of  the  old  doctrine  are  stated  by  Judge  Gray  as 
follows  : 2  "  That  the  charter  of  a  corporation  which  contains  its 
grant  of  powers  is  a  public  statute,  which  all  persons  are  bound 
to  take  notice  of  and  be  governed  by ;  that  the  restraints  thereby 
established  on  the  alienation  of  the  franchises  of  the  property  of 
the  corporation  are  founded  on  considerations  of  public  policy, 
which  neither  the  corporation  nor  any  other  persons  can  be 
allowed  to  evade  or  disregard."  In  a  later  case,  when  sitting 
on  the  United  States  Supreme  Court  bench,  the  same  judge  ob- 
served : 3  "  The  reason  a  corporation  is  not  liable  on  a  contract 
ultra  vires  are  the  interests  of  the  public  that  the  corporation 
shall  not  transcend  the  powers  granted;  the  interests  of  the 
stockholders  that  the  capital  stock  shall  not  be  subjected  to  the 
risk  of  enterprises  not  contemplated  by  the  charter,  and  therefore 
not  authorized  by  .the  stockholders  in  subscribing  for  the  stock  ; 
the  obligation  of  every  one  entering  into  a  contract  with  a  corpora- 
tion to  take  notice  of  the  legal  limits  of  its  powers." 

Turning  now  to  this  statement,  attention  should  be  called  to 
those  reasons  which  have  aided  a  great  majority  of  the  courts  in 
evolving  a  new  doctrine  of  ultra  vires  better  suited  to  the  condi- 
tions of  the  present  time.  In  the  first  place,  except  in  the  case 
of  what   is   known   as   "  quasi-public-private    corporations,"    the 

vires  see  B.  G.  L.  Co.  v.  Claffy,  151  N.  Y.  2  Richardson  v.  Sibley,  11  Allen,  65. 

24;  45  N.  E.  390.  3  Pittsburgh,  etc.  Co.  v.  Keokuk,  etc 

1  See  Heunesey  v.  Muhleman,  40  N.  Y.  Bridge  Co.,  131  U.  S.  37  ;  9  S.  Ct   770 
Ap.  Div.  175  ;  57  N.  Y.  S.  854. 

G2 


CHAP,  I.J  DRAFTING    THE    CHARTER.  §  53 

public  has  no  direct  interest  whatever  in  the  nature  of  the  powers 
vested  in  them.  Corporations  are  no  longer  created  by  special 
act,  except  in  a  few  cases,  and  it  would  be  a  poor  rule  which 
would  require  a  stranger  to  take  notice  of  the  contents  of  char- 
ters not  public  and  difficult  to  obtain.  In  modern  times  the 
placing  in  articles  of  incorporation  of  a  large  number  of  purposes, 
in  some  cases  giving  the  corporation  almost  unlimited  scope  along 
business  lines,  has  practically  removed  the  objections  spoken  of 
above,  to  the  effect  that  capital  shall  not  be  subjected  to  the  risk 
of  enterprises  not  contemplated  by  the  charter. 

Turning  now  to  the  changes  already  referred  to,  as  having  taken 
place  in  the  doctrine  of  ultra  vires,  they  may  be  stated  in  the 
form  of  the  following  propositions :  (1)  "  The  claim  that  a  con- 
tract is  void,  because  under  the  charter  beyond  the  power  of  a 
corporation  is  seldom  recognized  as  a  defence  to  an  agreement 
otherwise  objectionable,  and  never  where  it  would  defeat  the  ends 
of  justice  or  become  a  shield  against  wrong ;  "  1  (2)  the  doctrine  of 
ultra  vires  is  not  usually  applied  where  the  party  setting  it  up  has 
received  a  benefit  from  the  unlawful  act  relied  upon  as  a  defence  ; 2 
(3)  where  the  most  that  can  be  said  of  a  corporate  act  is  that  it 
is  an  abuse  of  power,  the  State  alone  can  act ; 3  (-f )  the  doctrine 
that  persons  dealing  with  corporations  are  bound  to  take  notice  of 
their  power  is  now  practically  done  away  with  by  the  application 
of  the  doctrine  of  estoppel  in  the  case  of  completed  contracts. 

Again,  it  should  be  carefully  noted  that  by  the  fullest  applica- 
tion of  the  doctrine  of  estoppel  where  attempts  have  been  made  to 
set  aside  contracts  on  the  ground  that  they  were  ultra  vires  of  the 
corporate  powers,  the  courts  have  practically  revolutionized  the 
doctrine  as  it  once  existed  in  this  country.  The  doctrine  of  es- 
toppel here  referred  to  is  of  the  character  referred  to  by  Lord 
Denman  in  Pickard  v.  Sears,4  where  he  says  that  where  one  by 
his  words  or  conduct  wilfully  causes  another  to  believe  in  the  ex- 
istence of  a  certain  state  of  things,  and  induces  him  to  act  on  that 
belief  so  as  to  alter  his  own  previous  position,  the  former  is  pre- 
cluded from  averring  against  the  latter  a  different  state  of  things 
as  existing  at  the  same  time.     By  an  extended  application  of  the 

1  Int.  Trust  Co.  v.  Company,  70  N.  H.  ;!  Rector  v.  Hartford   Deposit  Co.,  190 

lis;    40  Atl.    1054;    B.   R.  V."  0.  Co.   v.     111.380;  60  N.  E.  528. 
Banley,  15  Utah,  506;  50  Pa.  St.  611.  4  6  Ad.  &  El.  469. 

-  Norton  v.  Bank,  61  N.H.589;  Smith 
v.  Bank,  72  N.  II.  4. 

G3 


§  53    INCORPORATION    AND    ORGANIZATION    OF   CORPORATIONS.    [PART  I. 

doctrine  laid  down  by  Lord  Denrnan,  the  courts  hold  that  where 
there  has  been  no  express  violation  of  the  law  the  corporation  is 
estopped  by  its  own  contract  or  conduct  from  setting  up,  as  a  de- 
fence to  an  action  to  enforce  such  contract,  that  it  was  not  in  the 
power  of  the  corporation  to  make  it.  So  too  the  courts  hold  that 
where  a  private  corporation  enters  into  a  contract  in  excess  of  its 
granted  powers  and  has  received  the  benefits  of  the  contract  which 
the  other  parties  acted  upon,  the  corporation  is  estopped  to  repudiate 
the  contract  on  the  ground  that  it  was  ultra  vires.  Repeatedly  the 
courts  have  held  that  where  a  contract  with  a  corporation  — 
the  making  of  which  is  beyond  its  chartered  powers  —  has  been 
fully  executed  by  both  parties  to  the  contract,  neither  of  them 
can  assert  its  invalidity  as  a  cause  of  action  as  against  the  other. 

Again,  it  may  be  stated  that  where  a  corporation  has  acted  in 
excess  of  its  granted  powers  or  in  the  face  of  express  or  implied 
statutory  prohibition  it  is  clear  that  there  can  be  no  objection 
raised  on  that  ground  between  it  and  a  private  party,  for  this  can 
only  be  raised  by  the  State  in  a  direct  proceeding- to  forfeit  the 
franchises  of  the  corporation.1  Again,  it  may  be  stated  that  the 
doctrine  of  estoppel,  as  well  as  the  doctrines  of  ratification  and 
confirmation  by  acquiescence,  apply  under  modern  rules  to  ultra 
vires  contracts.2 

An  Ohio  court  has  divided  unauthorized  acts  of  a  corporation 
into  two  classes  :  (1)  where  it  has  no  power  to  do  what  it  promises 
or  to  receive  what  is  promised  ;  (2)  where  it  has  no  power  to  do 
what  it  promises  but  may  receive  what  is  promised.  In  each  class, 
it  was  said,  if  action  is  brought,  one  of  three  states  of  fact  will 
appear  :  (a)  where  it  has  performed  its  promise,  but  the  other 
party  has  not ;  (6)  where  the  other  party  has  performed,  but  it 
has  not ;  (c)  where  neither  party  has  done  all  that  was  promised. 
In  case  1  a  the  corporation  cannot  recover  ;  the  contract  has  no 
existence.  In  case  2  a  the  corporation  may  recover  for  perform- 
ance if  it  has  eliminated  the  ultra  vires  element  and  there  is  no 
want  of  mutuality.  In  cases  1  b  and  2  b  what  remains  to  be  done 
is  ultra  vires,  and  neither  party  can  recover.     In  cases  1  c  and 

1  Union  Nat.  Bank  v.  Matthews,  98  Works  Co.,  44  Fed.  146  ;  Linkauf  v.  Lom- 
U.  S.  621 ;  Pullman  v.  Upton,  96  U.  S.328.  bard,  137  N.  Y.  417  ;  33  N.  E.  472  ;  Nims 

2  See  Water  Works  Co.  v.  Low,  46  N.  Y.  v.  School,  160  Mass.  177;  35  N.E.  776; 
Sup.  633 ;  Woodruff  v.  Erie  R.  R.  Co.,  93  J.  B.  Farrell  Company  v.  Wolf,  96  Wis. 
N.  Y.  609  ;  Miller  v.  Am.  Mut.  Acci.  Ins.  10  ;  70  N.  W.  289  ;  Smith  v.  Bank  of  New 
Co.,  92  Tenn.  167;  Wood  v.  Corry  Water  England,  72  N.  H.  4. 

G4 


CHAP.  I.]  DRAFTING   THE    CHARTER.  §  54 

2  c  neither  party  can  recover  because  the  contract  is  ultra  vires. 
"Recovery  cannot  be  helped  by  promises  of  the  officers.  Pure 
assertion  of  law  cannot  give  rise  to  estoppel.  Nor  is  recovery 
aided  by  the  fact  that  a  consideration  was  conveyed  to  an  indi- 
vidual as  trustee  for  the  corporation.1 

§  54.  Corporate  Domicile. — Corporations,  like  individuals,  must 
have  a  place  of  abode.2  As  far  back  as  Lord  Coke's  time  a  place 
of  abode  was  held  to  be  of  the  essence  of  a  corporation.3  Unless 
provided  otherwise  by  statute,  the  rule  at  the  present  time  is  that 
corporations  to  have  any  legal  existence  must  have  a  home  within 
the  boundaries  of  the  State  which  creates  it. 

In  the  words  of  Justice  McAdam  in  Kruse  v.  Dusenbury,4  "A 
corporation  cannot  become  a  tramp.  It  must  have  a  domicile  — 
not  in  theory,  but  in  fact — within  the  sovereignty  which  created 
it.  ...  A  corporation  in  the  nature  of  things  must  have  some 
office  or  place  of  business  in  the  State  where  it  was  incorporated, 
so  that  creditors  may  know  where  to  find  it,  that  they  may  present 
and  if  necessary  prosecute  their  just  demands.  The  statute  con- 
templates that  such  place  of  business  shall  exist  not  only  in  name, 
but  in  fact ;  for,  if  the  corporation  has  no  place  of  business  in  the 
state  where  it  was  incorporated,  it  does  not  affect  the  charter, 
but  it  cannot  have  branch  offices  elsewhere.  Like  a  live  tree,  it 
cannot  consist  of  branches  only,  but  must  take  root  in  its  native 
soil  before  it  can  extend  its  branches  into  other  States." 

Most  of  the  States  have  statutes  expressly  requiring  the  main- 
tenance of  a  domiciliary  office  within  the  State  of  the  corporation's 
origin,  and  failure  to  comply  with  this  requirement  renders  the 
charter  of  such  corporation  liable  to  forfeiture  upon  proper  action 
taken  by  the  State.5 

Thus  in  Minnesota  a  charter  was  forfeited  for  the  failure  on  the 
part  of  the  corporation  to  maintain  a  domiciliary  office  therein. 
In  this  case,6  the  court  observed,  "  that  independently  of  statute, 
it  is  incumbent  upon  a  private  corporation  to  keep  its  principal 
place  of  business,  its  books  and  records,  and  its  principal  offices  in 

1  Vos  v.  Association,  9  Bull.  (Ohio)  194.  Tex.  80;  State  v.  Company,  45  Wis.  579  ; 

-  In  re  Spring  Valley  Water  Co.,  17  Simmons  v.  Company,  113   N.  C.   147  ;    is 

Cal.  132.  S.   E.   117;  State  v.  Company,  58    Minn. 

8  See  Sutton's  Hospital  Cases,  5  Coke's  330;  59  N.  W.  1048;   State  D.  Company, 

Rep.  253.  59  Kan.  151  ;   52  Pac.  422. 

*  19  Wk.  Di.  (N.  V.)  201.  6  State  v.  P.  &  N.  L.  Co.,  58  Minn.  330 ; 

5  See  N.  &  S.  R.  Co.  v.  People,  147  111.  59  N.  W.  1048. 
234  ;  85  N.  E.  608 ;   State  v.  Company,  24 

5  65 


§  54   INCORPORATION   AND    ORGANIZATION   OF   CORPORATIONS.    [PART  1. 

the  State  where  it  is  incorporated,  to  an  extent  necessary  to  the 
fullest  jurisdiction  and  visitorial  power  of  the  State  and  its  courts 
and  the  efficient  exercise  thereof  in  all  proper  cases,  and  that  a 
forfeiture  may  be  adjudged  for  a  violation  of  this  common  law 
obligation."  x 

The  authorities  have  on  more  than  one  occasion  brought 
actions  to  forfeit  charters  of  corporations  for  failure  to  main- 
tain domiciliary  offices  therein.2 

In  the  words  of  one  court,  a  corporation  "must  have  some 
fixed  office  or  place  of  business  in  the  State  where  it  is  incor- 
porated, so  that  creditors  may  know  where  to  find  it."3  Again, 
the  object  of  naming  the  domicile  is  to  fix  the  place  for  the 
holding  of  stockholders'  and  directors'  meetings,  and  to  fix  a 
location  for  the  books  of  the  corporation  where  the  stockholders 
and  creditors  may  demand  an  inspection  thereof,  if  this  right 
is  given  to  them  by  statute.4  Another  purpose  is  to  fix  the 
venue  of  actions  brought  against  a  corporation  where  the  law 
requires  that  suits  shall  be  brought  in  the  county  where  the 
defendant  resides.  In  those  States  which  have  statutes  expressly 
authorizing  a  corporation  to  transact  all  of  its  business  out- 
side of  the  domiciliary  State,  this  provision  for  a  domiciliary 
office  is  of  the  utmost  importance. 

A  corporation  cannot  have  two  domiciles  at  the  same  time.5 
The  domicile,  residence,  and  citizenship  of  a  corporation  are  in 
the  State  from  which  the  charter  was  procured.6  The  place  of 
residence  is  in  the  county  where  the  principal  office  is  located.7 

The  principal  office  of  a  corporation  and  the  place  for  the 
transaction  of  its  business  are  not  one  and  the  same  thing.  A 
corporation  may  have  its  office  in  one  locality  and  transact  its 
business  in  another.8 

1  See  also  State  ex  rel.  v.  Company,  45  3  Kruse   v.  Dusenbury,  19  Wk.   Dig. 

Wis.  579;   Stickle  v.   Liberty  Cycle"  Co.  (N.Y.)201. 
(N.  J.),  32  Atl.  708.  *  State  v.  Ry.  Co.,  45  Wis.  580. 

2  See  N.  &  S.  R.  Co.  v.  People,  147  111.         5  Bridge  Co.  v.  Woolley,  78  Ky.  525. 
234 ;  35  N.  E.  608 ;  State  v.  Company,  24  6  American,   etc.    Co.  v.  Johnston,  60 

Texas,  80;    State  v.  Company,  45   Wis.  Fed.  503 ;  Chafee  v.  Bank,  71  Me.  514. 
579;    Simmons   v.   Company,    113  N.   C.  7  McSherry  v.  Company,  97  Cal.  637; 

147;  18  S.  E.  117;  22  L.  R.A.  677;  State  32  Pac.  711. 

v.   Company,   58   Minn.   330;    59  N.   W.  8  Van  Etten  v.  Eaton,   19    Mich.  187; 

1048;    State  v.  Company,  59  Kan.    151;  Kennett   v.   Company,  68  N.  H.  432;   39 

52  Pac.  422 ;  Montgomery  v.  Forbes,  148  Atl.  585  ;  Meredith  v.  Company,  59  N.  J. 

Mass.  249 ;   19  N.  E.  342.  Eq.  257  ;  44  Atl.  55  ;  Harris  v.  McGregor, 


29  Cal.  124. 


66 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  56 

§  55.  Board  of  Management.  —  A  corporation  without  a  re- 
sponsible management  is  like  a  boat  without  oars,  a  ship  with- 
out sails.  It  must  have  certain  recognized  and  duly  appointed 
agents  to  represent  the  stockholders  in  the  management  of  the 
company.  These  agents  are  generally  known  as  a  board  of 
directors,  or  less  commonly  as  a  board  of  trustees.  Twenty  of 
the  States  require  the  names  of  the  first  board  of  directors  to 
be  inserted  in  the  certificate  of  incorporation,  while  of  the  re- 
mainder nine  require  merely  the  number  of  directors  to  be 
stated  therein.  Twenty-two  of  the  States  prescribe  residen- 
tial requirements  for  directors,  while  others  require  that  all 
directors  shall  be  stockholders.  The  number  of  directors 
required  by  the  various  business  corporation  acts  vary  from 
an  unlimited  maximum  to  a  minimum  of  one. 

Where  the  statute  requires  the  number  of  directors  to  be  set 
forth  in  the  articles,  the  incorporators  cannot  name  a  number 
less  than  the  minimum  required  by  law.1  The  power  to  have 
and  elect  directors  is  inherent  in  every  corporation,  irrespec- 
tive of  statute.  In  fact,  it  is  an  essential  feature  of  corporate 
existence.3 

In  the  absence  of  express  provision  in  the  charter  or  by-laws 
the  management  of  the  business  of  the  corporation  is  vested  in 
the  Board  of  Directors  and  not  in  the  stockholders.4  Failure 
to  name  directors  in  the  articles  when  the  same  is  required 
by  statute  will  justify  State  officials  in  refusing  to  file  arti- 
cles.5 Merely  providing  for  executive  officers  in  the  articles 
is  insufficient.6  The  original  directors  named  in  the  certifi- 
cate of  incorporation  under  direction  of  the  incorporation  act 
are  directors  de  jure,  clothed  with  all  the  powers  of  the 
corporation,  and  may  exercise  the  same  powers  as  though 
elected  by  the  stockholders.7 

§  56.  Capital  Stock.  —  Capital  stock  is  the  fund  of  money  or 
other  property  fixed  as  the  basis  for  conducting  the  business  of 
the  corporation,  and  contributed  by  the  corporators  to  the  capi- 

1  In  re  Germania  Sangerbund,  12  Perm.  5  Eakwright  v.  Company,  13  Ind.  404; 

Co.  Ct.  Rep.  89.                                           -  In  re  Association,  19   Penn.  Co.  Ct.  Rep. 

3  TerwilliKer  v.  Company,  59  111.  249 ;  25  ;  People  v.  Sclfredge,  52  Cal.  831. 

Reed  v.  Company,  50  Ind.  342;  Hurlbnt  v.  6  Bates   v.    Wilson,    14    Col.    140;    24 

Marshall,  62  Wis.  590 ;  22  N.  W.  852.  Pac.  99. 

*  Dana  v.  Bank,  5  W.  &  S.  (Pa.)  247.  7  Hamilton  Trust  Co.  v.  Clemens,  163 

N.  Y.  423 ;  57  N.  E.  614. 

67 


§  56    INCORPORATION    AND    ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

tal,  and  is  usually  represented  by  shares  issued  to  subscribers 
to  the  stock  on  the  initiation  of  the  enterprise.1  Capital  stock 
from  another  aspect  is  the  security  for  creditors  of  the  corpora- 
tions, and  entitles  the  owners  thereof  to  participate  in  the  man- 
agement of  corporate  business  and  share  in  its  profits  and  in  its 
surplus  after  payment  of  corporate  debts.2  Shares  of  stock,  on 
the  other  hand,  are  simply  the  muniments  and  evidence  of  the 
holder's  title  to  a  given  share  in  the  property  and  franchises  of 
the  corporation  in  which  he  is  a  member.3  Frequently  the  words 
"capital"  and  "capital  stock"  are  used  interchangeably  to 
express  the  property  and  assets  of  the  corporation. 

It  is  not  altogether  clear  whether  express  authority  to  issue 
shares  of  capital  stock  is  necessary,  yet  it  has  been  repeatedly 
held  that  in  order  to  increase  or  reduce  the  capital  stock  of 
a  corporation,  legislative  authority  is  necessary.  The  prevail- 
ing view  seems  to  be  in  favor  of  the  necessity  of  legislative 
authority.4 

In  the  absence  of  statutory  or  charter  requirements  neither 
subscription  for  capital  stock  nor  payment  thereof  is  necessary 
to  corporate  existence.5  If  the  charter  of  a  corporation  does  not 
fix  the  amount  of  its  capital  stock ,  it  must  be  fixed  by  the  stock- 
holders, or,  with  their  consent,  by  the  directors.6  Stock  can  be 
issued  only  by  direction  of  the  corporation.7 

In  many  of  the  Commonwealths  the  minimum  amount  of 
capital  stock  which  a  corporation  may  have  is  fixed  by  statute. 
Very  few  of  the  States  limit  the  maximum  amount  of  capitaliza- 
tion.8 To  determine  the  amount  of  capital  stock  that  a  corpora- 
tion has,  preferred  stock  must  always  be  included  therein.9  It 
is  not  always  an  easy  question  to  determine  who  are  and  who 


i  Christensen  v.  Eno,  106  N.  Y.  97 ;  12  Company,  74  Texas,  421  ;  2  S.  W.  101 ; 

N.  E.  648.  Stowe  v.  Flagg,  72  HI.  397. 

2  Janney  v.  Bank,  98  Ala.  515  ;  13  So.         6  So.  K.  Ry.  Co.  v.  Cushing,  45   Me. 
761.  524;  State   v.   Bank,    95    Tenn.   221;  31 

3  Mechanics'    Bank    v.   Company,    13  S.  W.  993. 

N.  Y.  599.  7  H.  D.  P.  Ass'n  v.   Stevens,  34  Neb. 


4  Cooke  v.  Marshall,  191  Pa.  St.  315 
43  Atl.    314;    196    Pa.  St.  200;  46  Atl 


447  ;     Detroit    Chamber    of    Commerce    41  Ind.   151  ;  Williams  v.  Hewitt,  47  La. 


v.  Gardner,   109  Mich.   691;    67   N.   W 
897. 

6  McGintyu.  Company,  155  Mass.  183 
.29  N.   E.  510;  Jefferson   Nat.   Bank  v 

68 


528 ;  52  N.  W.  568 ;  Hendrix  v.  Academy 
of  Music,  73  Ga.   437  ;  State  v.  Company, 


Ann.  1076  ;  17  So.  496. 

8  See  Hughes  v.  Company,  34  Md.  316. 

9  State  v.  Company,  16  S.  C.  524. 


CHAP.  I.]  DRAFTING   THE    CHARTER.  §  57 

are  not  stockholders.  The  question  must  usually  be  determined 
by  the  particular  facts  of  each  case.1 

Sometimes  the  incorporation  act  requires  the  articles  to  state 
the  time  when  and  the  manner  in  which  stock  shall  be  paid  for. 
It  is  sufficient  in  this  connection  to  say,  for  example,  that  the 
stock  shall  be  paid  for  in  cash,  and  that  no  certificate  of  stock 
shall  issue  until  such  payment  is  made.2  The  statement  may 
be  broadened  if  desired  by  setting  forth  in  the  articles  that  the 
stock  shall  be  paid  for  in  property,  at  such  times  and  of  such 
a  character  and  with  such  notice  to  the  subscribers  as  the 
directors  shall  deem  for  the  best  interests  of  the  corporation.3 

Where  the  statute  requires  the  amount  of  the  capital  stock  to 
be  stated,  it  has  been  held  sufficient  to  simply  state  the  number 
of  shares  and  the  par  value  of  the  same.4 

§  57.  Limitations  upon  Amount  of  Capital  Stock.  —  As  has 
already  been  observed,  the  great  majority  of  the  incorpora- 
tion acts  provide  that  the  amount  of  capital  stock  which  the 
corporation  is  to  have  shall  be  fixed  in  the  articles  of  incor- 
poration. This  is  the  usual  and  often  the  only  limitation  on 
the  amount  of  capital  stock  which  any  particular  corporation 
is  authorized  to  have.  However,  in  fourteen  of  the  Common- 
wealths the  minimum  capital  stock  of  all  corporations  is  fixed 
by  statute,  while  in  three  of  them  the  maximum  capitalization 
is  also  prescribed. 

In  this  connection  the  words  of  the  court  in  Barry  v.  Mer- 
chants Exchange  Co.6  are  peculiarly  instructive.  In  that  case 
Chancellor  Sanford  observed :  "  That  the  capital  stock  of  a 
corporation  is  the  aggregate  amount  of  the  funds  of  the  cor- 
porators which  are  combined  together  under  a  charter,  for  the 
attainment  of  some  common  object  of  public  convenience  or 
private  utility.  This  amount  is  fixed  in  the  act  of  incorpora- 
tion. It  is  thus  limited,  in  reference  to  the  convenience  of  the 
intended  corporators,  and  for  the  information  and  security  of 
the  public  at  large.  To  the  corporators  it  prescribes  the  amount 
and  the  subdivisions  of  their  respective  contributions  to  the  com- 

1  See  O'Brien  v.  Fulkerson,  75  Mich,  *  Buffalo,  etc.  Ry.  Co.  v.  Hatch,  20 
554;  42  N.  W.  979.                                               N.  Y.  157. 

2  N.  O.  Ry.  Co.  v.  Frank,  39  La.  Ann.  «  i  San.  Chan.  (N.  Y.)  280. 
707  ;  2  So.  310. 

3  See  Baltimore,  etc.  Telephone  Co.  v. 
Company,  37  La.  Ann.  883. 

69 


§  59    INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS.    [PART  I. 

mon  fund ;  the  voice  which  each  shall  have  in  the  control  and 
management;  and  the  apportionment  of  the  profits  of  the  enter- 
prise. To  the  community  it  announces  the  extent  of  the  means 
contributed  and  forming  the  basis  of  the  dealings  of  the  corpo- 
rate body,  and  enables  every  man  to  judge  of  its  ability  to  meet 
its  engagements  and  perform  what  it  undertakes.  And  when  the 
statute  requires  the  stock  to  be  paid  in  before  the  corporation 
can  transact  business,  security  to  those  contracting  with  it  is 
thereby  superadded  to  the  information  of  its  resources.  These 
objects  for  the  public  benefit  are  such  as  the  legislature  had  in 
view  in  limiting  the  amount  of  capital  stock,  and  requiring  a 
specified  sum  or  proportion  to  be  paid  in.  One  other  considera- 
tion dictates  the  amount  thus  fixed.  This  is  the  probable  and 
reasonable  extent  of  the  means  requisite  to  the  accomplishment 
of  the  end  proposed,  qualified  in  many  cases  by  the  unwilling- 
ness of  the  legislature  to  create  these  artificial  beings  with  an 
undue  amount  of  capital." 

§  58.  Par  Value  of  Capital  Stock.  —  In  thirty-six  of  the 
States  the  par  value  of  the  shares  of  the  capital  stock  may 
be  any  amount.  In  the  remainder  the  par  value  is  limited 
by  statute.  Where  the  corporation  act  does  not  require  that 
the  number  and  par  value  of  shares  be  set  forth,  the  presumption 
is  that  the  legislature  intended  that  this  should  be  fixed  by  the 
stockholders  of  the  corporation  at  the  organization  meeting.1 
The  matter  may  be  entrusted  by  the  stockholders  to  the  directors 
if  desired.3 

The  question  sometimes  arises  as  to  whether  changing  the  par 
value  of  shares  without  increasing  or  decreasing  the  capital 
stock  constitutes  such  a  "variation"  therein  as  to  come  within 
the  statutory  prohibition  forbidding  such  variation  without  leg- 
islative authority.  The  prevailing  rule  seems  to  be  that  such 
variation  may  be  made  only  by  conforming  to  the  statute  (if  any 
exists)  authorizing  amendments  to  the  charter  in  this  regard.4 

§  59.     Amount   of   Stock    Subscriptions.  —  Unless    made    SO   by 

statute,  no  subscription,  in  whole  or  in  part,  of  the  capital  stock 
of  a  corporation  is  necessary,  either  to  the  validity  of  a  corpora- 

1  S.  &  K.   R.   Co.  v.  Cushing,  45  Me.  3  Commonwealth  v.  Company,  52  Pa. 

524;    State  v.  Bank,    95   Tenn.   221;  31     St.  506. 

g   w.  993.  *  C.  C.  Ry.  Co.  v.  Allerton,    18    Wall. 

233 ;  Seignouret  v.  Company,  24  Fed.  332. 

70 


CHAP.   I.]  DRAFTING   THE   CHARTER.  §  59 

tiorfs  existence  or  to  its  right  to  transact  business.1  The  rule, 
however,  that  exists  in  this  country  to-day  is  doubtless  opposed 
to  the  common  law  rule  on  the  subject.2  The  States  of  Wash- 
ington, Illinois,  and  Missouri  require  subscriptions  to  the  full 
amount  of  the  authorized  capital  stock.3 

Fourteen  of  the  Commonwealths  require  the  amount  of  stock 
subscribed  for  by  each  incorporator  to  be  set  forth  in  the  arti- 
cles, while  others  require  the  amount  of  stock  with  which  the 
corporation  will  commence  business  to  be  stated.  A  few  pre- 
scribe that  the  amount  of  stock  actually  subscribed  shall  be  set 
forth.4  Sometimes  provisions  are  found  requiring  the  residences 
of  subscribers  to  the  capital  stock  to  appear  in  the  articles.5 

Any  person  capable  of  contracting  may  subscribe  for  stock  or 
become  a  stockholder.  This  includes  aliens,  married  women, 
and  corporations.6  Subscriptions  for  stock  must  be  made 
through  commissioners  where  the  law  so  provides.7  But  even 
where  such  subscriptions  are  made  through  parties  other  than 
commissioners  contrary  to  the  statute,  such  subscriptions  may 
be  afterwards  ratified  by  the  proper  party.8 

Occasionally  attempts  are  made  to  limit  by  charter  provisions 
the  amount  of  stock  which  may  be  owned  by  any  one  stockholder. 
Such  provisions  are  generally  held  void,  as  not  called  for  by  the 
governing  statute.9  An  important  question  that  arises  in  con- 
nection with  the  general  subject  of  stock  subscriptions,  amount 
of  stock  paid  in,  and  amount  of  capital  with  which  the  corpora- 
tion may  begin  business,  has  reference  to  the  effects  which  follow 
a  failure  on  the  part  of  the  corporation  to  comply  with  such 
statutory  requirements.  In  general,  it  may  be  said  that  the 
penalties  which  follow  a  failure  to  comply  with  such  provisions 
are  generally  along  the  following  lines : 

First,  they  afford  a  basis  for  an  action  to  be  brought  by  the  State 

1  Livesey  v.  Company,  5  Neb.  50;  Cal.  201  ;  L.  O.  A.  Ry.  Co.  v.  Mason,  16 
Johnson  v.  Kessler,  76   la.  411  ;  41   N.  W.     N.  T.  451. 

57;    S.  F.  N.  Hank  v.  Almy,   117  Mass.  6  See  Steinmetz  v.  Company,  57   Ind. 

476;  Minor  v.  Bank,  l  Peters  (U.S.),  46;  457. 

7  L.  E.  47  ;  Schenectady,  etc.  Plank  Road  6  Dublin,  etc.  Ry.  Co.  v.  Black,  L.  R.  8 

Co.  v.  Thatcher,  111  N.  Y.  102.  Exch.  181  ;  Cork,  etc.  Ry.   Co.   v.   Caze- 

2  Schloss  v.  Company,  87  Ala.  411  ;  6  nove,  L.  R.  10  Ad.  &  El.  935. 

So.  360.  7  Shurtz  v.  Company,  9  Mich.  269. 

a  Denny  Hotel  Co.  v.  Schram,  6  Wash.  8  Walker  v.  Company,  ">1  Misc.  (N.  Y.) 

134;  32  Pac.  1002.  245. 

4  See   Buffalo,  etc.   Ry.  Co.   v.  Hatch,  9  O'Brien    v.   Cummings,    13  Mo.  Ap. 

20  N.  Y.    157;    People  v.  Chambers,  42  197. 

71 


§  60    INCORPORATION   AND   ORGANIZATION    OP   CORPORATIONS.    [PART  I. 

looking  to  the  forfeiture  of  the  Gharter.  Secondly,  they  some- 
times result  in  rendering  the  incorporators  liable  as  co-partners, 
the  courts  holding  that  by  failing  to  comply  with  the  statute 
they  have  forfeited  their  right  to  immunity  from  individual 
liability  for  what  would  otherwise  be  distinctively  corporate 
debts.  Thirdly,  in  some  jurisdictions  a  penalty  is  prescribed 
by  statute  making  directors  and  officers  liable  for  all  debts  con- 
tracted before  the  statutory  requirements  above  referred  to  have 
been  complied  with. 

It  goes  without  saying  that  corporations  cannot  legally  issue 
stock  in  excess  of  their  authorized  capitalization.1  However, 
this  does  not  mean  that  bona  fide  purchasers  of  such  shares  are 
without  remedy,  for  ordinarily  in  such  cases  both  the  corpora- 
tion and  its  officers  are  liable.2 

§  60.  Amount  of  stock  paid  in.  —  It  has  already  been  ob- 
served that  neither  the  subscription  to  nor  the  payment  of  the 
whole  amount  of  capital  stock  authorized  by  the  charter  is  a 
condition  precedent  to  the  legal  existence  of  the  corporation 
unless  it  is  made  so  by  a  governing  statute.  Ordinarily,  it 
merely  goes  to  the  right  to  transact  business,  without  subjecting 
the  directors  or  the  corporate  officers  and  agents  to  personal 
liability.3  However,  in  some  few  of  the  States  the  corporation 
acts  provide  that  before  the  corporation  may  commence  busi- 
ness a  certain  percentage  of  the  capital  stock  shall  be  paid  in. 
Where  the  articles  fail  to  so  set  forth  the  amount  of  stock  paid 
in  as  required  by  statutes,  this  does  not  affect  ipso  facto  the 
legality  of  the  corporation's  existence,  but  it  is  a  matter  which 
can  only  be  taken  advantage  of  by  the  State  in  quo  warranto 
proceedings.5 

Statutory  payments  must  be  made  in  the  manner  and  time 
provided  by  statute,  and  they  must  be  paid  in  in  good  faith.6 

1  Mechanics'  Bank  v.  Company,  13  Music,  73  Ga.437  ;  K.C.  H.  Co.  v.  Hunt,  57 
N.  Y.  599 ;  Scovill  v.  Thayer,  105  U.  S.  Mo.  126 ;  Tradesmen  Publishing  Co.  v. 
143.  Company,  95  Tenn.  634;  32  S.  W.  1097; 

2  N.  Y.  N.  H.  R.  Co.  v.  Schuyler,  34  Ag.  Bank  v.  Burr,  24  Me.  256 ;  Y.  R. 
N.  Y.  30  ;  Moores  v.  Bank,  111  U.  S.  156  ;  L.  N.  Co.  v.  Company,  72  Fed.  62. 

4  S.  Ct.  345.  6  McLaren    v.    Pennington,    1     Paige 

3  D.  S.,  etc.  Co.  v.  Attorney-General,  (N.  Y.),102;  People  v.  Chambers,  42  Cal. 
21  Can.  Sup.  Ct.  72 ;  S.  P.  R.  Co.  v.  201  ;  State  v.  Company,  3  Hump.  (Tenn.) 
Thatcher,  11  N.  Y.  102.  305  ;  People  v.  City  Bank,  7  Col.  226  ;  3 

«  E.  P.  R.  Co.  v.  Vaughan,  14  N.  Y.  Pac.  214  ;  People  v.  Bank,  129  111.  618  ;  22 
546.      See  also  Hendrix  v.  Academy  of     N.  E.  288  ;  Hammond  v.  Strauss,  53  Md.  1. 

72 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  02 

Failure  to  state,  in  the  affidavit  relative  to  the  amount  of  stock 
paid  in,  that  such  payments  had  been  made  in  good  faith  to  the 
directors  is  not  fatal,  as  the  bona  fides  of  the  transaction  will  be 
implied.1 

§  61.  Amount  of  Stock  ■with  which  a  Corporation  may  begin 
Business.  —  Some  few  of  the  States  require  that  the  amount  of 
capital  with  which  a  corporation  will  begin  business  shall  be 
set  forth  in  the  articles.  In  some  cases,  as  in  New  Jersey  and 
New  York,  the  minimum  amount  is  prescribed  by  statute.  The 
failure,  however,  to  actually  pay  in  the  prescribed  amount  of 
capital  stated  in  the  articles  will  not  operate  to  destroy  the 
corporate  existence.2 

§  62.  Duration  of  Corporate  Existence.  —  At  one  time  there 
was  a  tendency  on  the  part  of  the  States  to  limit  the  duration  of 
corporate  existence  of  corporations  to  a  definite  period  in  the 
supposed  interest  of  the  public.3  At  the  present  time  in 
twenty-six  of  the  Commonwealths  perpetual  charters  may  be 
procured  under  the  business  corporation  acts  in  force  therein. 
In  the  remaining  States  the  periods  vary  from  one  hundred 
years  to  twenty.  Even  in  these  States  provision  is  made  for 
extension  of  corporate  existence  by  complying  with  the  statute 
in  such  case  made  and  provided.5 

The  phrase  "  perpetual  succession  "  has  been  held  not  to  be 
equivalent  to  perpetual  existence.6  The  naming  of  a  period  of 
corporate  existence  in  the  charter  in  excess  of  that  permitted  by 
law  will  not  render  the  charter  void,  but  the  corporate  existence 
will  not  be  continued  beyond  the  statutory  period." 

It  is  scarcely  necessary  to  say  that  the  continuance  of  active 
corporate  existence  during  the  entire  period  limited  by  the 
charter  is  not  binding  upon  the  corporation.8  A  difficult  ques- 
tion often  arises  when  the  corporation  attempts  to  continue  its 
active  business  as  a  corporation  and  to  perform  its  corporate 

1  Buffalo,   etc.   Ky.  Co.   v.   Hatch,   20  5  See  post,  sec.  120. 

N.  Y.  157.  G  Fairchild  v.  Association,  71  Mo.  526  ; 

2  Staunton  Copper  Mining  Co.  v.  State  ex  rel.  Walker  v.  Payne,  129  Mo. 
Thurmond,  7  Mo.  Ap.  587;  Hammond  v.    468;  31  S.  W.  797. 

Strauss,  53  Md.  1 ;  State  v.  Webb,  97  Ala.  7   People  v.  Clieeseman,  7  Col.  376  ;  3 

ill ;  12  So.  377.  Pac.  716;  Hughes  v.  Company,  34  Md. 

3  Smith  v.  Company,  58  N.  J.  Eq.  331  ;  316.  See  also  Buffalo,  etc.  Ky.  Co.  V. 
43  Atl.  567  ;  State  ex  rel.  Walker  v.  Payne,  Hatch,  20  N.  V.  157. 

129  Mo.  468;  31  S.  W.  797.  s  Cronln  v.  Company  ei  «/.,  29  Wk.  L 

Bui  (Ohio)  52. 

73 


§  64    INCORPORATION   AND   ORGANIZATION   OP   CORPORATIONS.    [PART  I. 

functions  after  the  expiration  of  its  charter.  Ordinarily  this 
is  a  matter  which  concerns  the  State  alone.1  Under  such  cir- 
cumstances, in  order  to  protect  third  parties,  the  courts  recognize 
such  corporations  as  corporations  de  facto  on  the  ground  that 
there  is  clearly  authority  for  their  attempting  to  act  as  cor- 
porations.2 Many  courts  of  high  authority  have  held  that  a 
corporation  is  dissolved  and  ceases  to  exist  when  its  charter 
expires.3  In  many  States  there  are  statutes  permitting  corpo- 
rations to  exist  as  such  for  certain  purposes  after  the  expiration 
of  their  charter.  The  purpose  of  such  statutes  is  to  grant  to 
the  corporation  time  to  close  up  its  corporate  affairs.  It  has 
been  held  that  the  object  of  such  statutes  is  not  to  limit 
but  to  enlarge  corporate  privileges  so  that  the  corporation 
may  continue  active  business  throughout  the  whole  charter 
period.5 

§  63.  Date  of  Annual  Meeting.  —  In  Alaska,  Arizona,  Dela- 
ware, Iowa,  Minnesota,  Nebraska,  and  Utah  the  corporation  acts 
require  that  the  date  of  the  annual  meeting  of  the  corporation 
be  inserted  in  the  articles.  Such  provisions  are  to  be  regarded 
as  directory  rather  than  mandatory,  and  their  legal  effect  is  es- 
sentially the  same  as  if  such  provision  was  merely  made  in  a 
valid  by-law  of  the  corporation.  In  Arkansas,  Louisiana,  and 
Tennessee  the  date  of  the  organization  meeting  must  appear  in 
the  certificate  of  incorporation.6  Even  when  the  statute  requires 
that  the  directors  shall  be  chosen  at  the  annual  meeting,  this 
has  no  reference  to  the  election  of  the  first  board  at  the  organi- 
zation meeting.7 

§  64.  Limitation  upon  Corporate  Indebtedness.  —  In  the  absence 
of  constitutional  or  statutory  provision,  there  are  no  limita- 
tions imposed  upon  corporations  with  respect  to  the  amount  of 
indebtedness  which  they  may  incur.8  The  whole  extent  of  cor- 
porate credit  is  measured  and  controlled  by  its  capital.  The 
laws  of  trade  have  placed  more  efficient  barriers  than  the  State 

1  Bushnell  v.  Company,  138  111.  67 ;  27  5  Berwick  v.  Company,  39  Mich.  701. 
N.  E.  596.  6  Hughes    v.    Parker,  20  N.    H.    58 ; 

2  Miller  v.  Company,  31  W.  Va.  836;  Beardsley  v.  Johnson,  121  N.  Y.  224;  24 
8  S.  E.  600.  N.  E.  380. 

3  Bradley  v.  Reppell,  133  Mo.  545 ;  ''  B.  A.  M.  Co.  v.  Moring,  15  Gray 
32  S.  W.  645;  Sturges  v.  Vanderbilt,  73  (Mass.),  211. 

N.  Y.  384.  8  Barry  v.    Company,    1    San.   Chan. 

(N.  Y.)  280,310. 

74 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  66 

legislatures  to  the  power  of  corporate  borrowing.  In  Alaska, 
Arizona,  Florida,  Iowa,  Minnesota,  and  Nebraska,  the  incor- 
poration acts  require  that  the  maximum  amount  of  indebtedness 
which  the  corporation  may  incur  shall  be  set  forth  in  the  articles 
of  incorporation. 

In  twenty-two  of  the  Commonwealths  statutes,  either  expressly 
or  by  implication,  prescribe  the  amount  of  indebtedness  which 
corporations  may  incur.1 

When  the  phrase  "implied  limitation  upon  corporate  indebted- 
ness "  is  used,  reference  is  had  to  that  not  uncommon  form  of 
limitation  where  directors  or  stockholders  are  made  liable  for 
corporate  debts  in  case  the  corporate  indebtedness  exceeds  a 
certain  definite  amount.2 

§  65.  Exemption  of  Stockholders  from  Personal  Liability.  — 
While  there  is  no  common-law  liability  imposed  upon  stock- 
holders for  corporate  debts,  nevertheless  parties  may  lawfully 
contract  to  any  extent  they  see  fit  as  to  their  own  personal  lia- 
bility for  such  indebtedness.3 

In  order  that  stockholders  may  avoid  personal  liability  for 
corporate  debts  it  is  necessary  in  Arizona,  Delaware,  Iowa, 
Kentucky,  Louisiana,  Mississippi,  Nebraska,  and  Utah,  to 
insert  provisions  in  the  certificates  of  incorporation  expressly 
exempting  stockholders  from  such  liability. 

§  60.  Adoption  of  By-Laws  by  Directors.  —  In  a  large  number 
of  the  States  and  Territories  the  incorporation  acts  expressly 
provide  for  delegation  of  power  to  directors  to  make,  alter,  or 
repeal  by-laws.4  In  many  of  the  States  in  order  that  the  cor- 
poration may  have  this  power  it  is  necessary  to  insert  provision 
therefor  in  the  charter.5  Unless  the  power  to  make,  alter,  or 
repeal  by-laws  is  thus  delegated  to  the  board  of  directors,  it  can 
only  be  exercised  by  the  stockholders.6 

1  See  Commonwealth  v.  Company,  129  3  London,  etc.  Bank  v.  Parrott,  125 
Pa.  St.  405;  18  Atl.414;0.  H.  Mfg.  Co.  v.  Cal.  472  ;  58  Pac.  164;  Lillard  v.  Com- 
Canney,  54  N.  H.  295;  Thornton  v.  Bal-  pany,  14  Tex.  Civ.  Ap.  67;  36  S.  W.  792 ; 
com,  85  la.  198;  52  X.  W.  190;  Heuer  v.  Tidioute  Sav.  Bank  v.  Libbey,  101  Wis. 
Carmichael,  82  la.  288  ;  47  N.  W.  1034.  193  ;  77  N.  W.  182. 

2  See  Tallmadge  v.  Company,  4  Barb.  4  See  Part  III.,  Table  12,  page  582. 
(X.  r.)382;  Allison  v.  Company,  87  Tenn.  6  Caliill    v.  Company,  2  Dong.  (Mich.) 
60;  9  S.  W.  226;  Sweney  v.  Talcott,  85  128;  Heintzelman v.  Association, 38 Minn, 
la.  103;  52  N.  YV.  106  :  Cunther  v.  Com-  138;  36  N.  W.  100;  Hank  of  Holly  Springs 
pany,  107  Ky.  44;  52  S.  W.  931.  v.  Pinson,  58  Miss   421. 

0  Morton  Gravel  Road  v.  Wysong,  51 

75 


§  68   INCORPORATION  AND   ORGANIZATION   OF    CORPORATIONS.    [PART  I. 

§  67.  Provisions  for  the  Regulation  of  the  Internal  Affairs  of  the 
Corporation.  —  In  a  number  of  the  States  statutory  authority  is 
to  be  found  for  inserting  in  the  articles  of  incorporation  any 
provisions  that  may  be  desired  relative  to  the  regulation  of  the 
business,  and  for  the  conduct  of  the  affairs  of  the  corporation, 
creating,  defining,  and  limiting  the  powers  of  the  corporation, 
the  officers,  and  the  stockholders.  Under  such  authority  the 
clauses  which  are  usually  inserted  are  the  following:  giving  the 
directors  power  to  sell  all  the  business  of  the  corporation  as- 
an  entirety;  the  power  to  sell  entire  corporate  property  at  the 
request  of  a  majority  of  the  stockholders;  giving  the  right  to 
directors  to  make  and  alter  by-laws;  giving  the  power  to  direc- 
tors to  borrow  money  upon  bond  and  mortgage  without  authority 
therefor  being  first  given  by  the  stockholders ;  power  to  appoint 
additional  vice-presidents  and  assistant  secretaries  and  treas- 
urers ;  to  declare  dividends ;  to  reserve  and  fix  working  capital ; 
to  appoint  an  executive  committee  from  the  board  of  directors; 
giving  stockholders  power  to  remove  directors ;  giving  power 
to  create  a  lien  upon  stock  for  indebtedness  due  company  from 
stockholders;  provision  for  the  examination  of  books  by  the 
stockholders,  and  in  connection  therewith  power  to  insert 
private  publicity  clause ;  to  provide  for  cumulative  voting  and 
limiting  the  power  to  vote ;  reservation  of  power  to  change 
provisions  in  the  articles  of  incorporation;  power  to  create 
preferred  stock. 

§  68.  Miscellaneous  Provisions  Relative  to  Contents  of  Articles 
of  incorporation.  —  It  would  be  impossible  to  enumerate  all  the 
peculiar  provisions  under  the  several  business  corporation 
acts  which  exist  *  in  the  various  States.  Among  those  not 
already  referred  to  are  the  following :  Statement  of  the  amount 
of  stock  subscribed  for  by  the  incorporators ;  a  list  of  all 
parties  who  have  subscribed  for  stock  as  preliminary  to 
incorporation.1 

In  setting  forth  the  subscribers  to  the  capital  stock  it  is 
sufficient    to   use   above   the    first   name    the    words    "names," 


Ind.  4;   N.  M.  T.  S.  Co.  v.  Bishop,  103  1  Chester  Glass  Co.  v.  Dewey,  16  Mass. 

Wis.    492 ;  79  N.   W.  785  ;   In  re  A.  A.  94  ;  C.  V.  &  P.  C«§.  v.  Secretary  of  State, 

Griffiug  Iron  Co.,  63  N.  J.  Law,  168,  357  ;  128  Mich.  62 ;  87  N.  W.  901 ;  J.  N.  Bank 

41  Atl.  931  ;  46  Atl.  1097.  v.   Company,    74    Tex.   421 ;    12    S.    W. 


110. 


76 


CHAP.  I.]  DRAFTING   THE    CHARTER.  §  69 

"residences,"  "shares,1'  and  then  immediately  follow  the 
same  with  the  names  of  the  subscribers  to  the  capital  stock.1 
Among  other  provisions  arc  those  requiring  the  naming  of  an 
agent  upon  whom  service  of  process  upon  the  corporation  may 
be  served ; 2  another,  a  statement  of  the  manner  of  conducting 
the  business  of  the  corporation.3  A  number  of  the  States 
require  the  names  and  residences  of  the  incorporators  to  be 
set  forth  in  the  articles.4  Sometimes  it  is  necessary  to  secure 
the  approval  of  the  Attorney-General  to  the  form  and  contents  of 
the  articles.5 

§69.  Construction  of  Charter. —  Under  the  liberal  provisions 
of  the  modern  incorporation  acts,  the  articles  drawn  thereunder 
necessarily  assume,  by  the  sole  action  of  the  incorporators, 
numerous  powers,  many  of  which  have  been  heretofore  of  a 
public  character,  affecting  the  interests  of  the  public  very 
largely  and  very  seriously.  The  Supreme  Court  of  the  United 
States  has  taken  the  view  that,  for  the  reasons  just  given,  these 
articles  do  not  commend  themselves  to  the  judicial  mind  as  a 
class  of  instruments  requiring  or  justifying  any  very  liberal  con- 
struction. That  court  has  said  in  this  connection,  that  where 
the  question  is  whether  they  conform  to  the  authority  given  by 
statute  in  regard  to  corporate  organization,  it  is  always  to  be 
determined  upon  a  just  construction  of  the  power  granted  to 
them  with  a  due  regard  for  all  other  laws  of  the  State  upon  that 
subject.6 

In  construing  charters  the  following  rules  seem  to  govern  the 
courts:  First,  the  intention  of  the  legislature  must  be  given  due 
weight."  Second,  due  consideration  must  be  given  to  the  policy 
of  the  State  with  reference  to  such  matters  as  evidenced  by  the 
character  of  legislation.  Third,  all  ambiguities  in  the  terms  of 
the  articles  of  incorporation  must  be  construed  against  the 
corporation  in  favor  of  the  public.8  Fourth,  words  should  be 
given  their  ordinary  meaning.9     Fifth,   the  construction  given 

1  Vawter  v.  Franklin  College,  53  Ind.  6  Or.  Ry.  Co.  v.  Or.  Ry.  Co.,  130  TJ.  S. 
88.  1  ;  9  8.  Ct.  409. 

2  Johnson  v.  Masons'  Lodge,  21  Ky.  7  Union  Nat.  Bank  v.  Matthews,  98 
L.  R.  493;  51  S.  W.  620.  U.  S.  621. 

3  State  v.  Association,  29  O.  St.  399.  8  A.  L.  &  T.  Co.  v.  Company,   157  111. 
*  Steinmetz  v.  Company,  57  Ind.  457  ;     641  ;  42  N.  E.  153. 

State  v.  Foulkes,  94  Ind.  493.  '•»  Riker  v.  Leo,  133  N.  Y.  519  ;  30  N.  E. 

6  See   Field    v.    Cooks,    16   La.   Ann.     598. 
153. 

77 


§  69   INCORPORATION   AND   ORGANIZATION   OP   CORPORATIONS.    [PART  I. 

the  charter  must  always  be  reasonable.1  Sixth,  where  the 
language  of  the  certificate  as  to  corporate  purposes  and  powers 
permits  of  two  constructions,  that  the  more  favorable  to  the 
State  is  to  be  adopted.2 

i  Black  v.  Company,  22  N.  J.  Eq.  130 ;         2  Bridge  Co.  v.  Ferry  Co.,  29  Conn, 
Wheeler,  etc.  Co.  v.  Company,  14  Wash.     221. 
630;   45  Pac.  316;   Nat.   Bank   v.   Com- 
pany, 41  0.  St.  1. 


78 


CHAP.  II.]  PROCURING    THE    CHARTER.  $    71 


CHAPTER   II. 
PROCURING  THE   CHARTER. 

§  70.  Signing  the  Articles.  —  With  but  few  exceptions  the 
business  corporation  acts  of  the  various  Commonwealths  provide 
that  the  articles  shall  be  signed  by  the  incorporators.1  It  is  not 
requisite  to  the  validity  of  such  articles  that  they  be  signed 
within  the  State  from  which  the  charter  is  procured.2  The  arti- 
cles may  be  drawn  on  separate  sheets,  the  last  one  of  which  only 
need  be  signed  by  the  incorporators.3  If  the  incorporator  is 
unable  to  write  he  may  sign  the  articles  by  his  mark.4  The  full 
name  need  not  be  signed.5 

If  seals  are  required  by  statute  they  must  be  used.6  The  use 
of  a  power  of  attorney  to  sign  articles  would  probably  not  be 
sanctioned  where  the  statute  calls  for  additional  matters  which 
are  necessarily  personal  in  their  nature.7 

§  71.  Acknowledgment  of  Execution  of  Articles.  —  With  some 
few  exceptions,  the  incorporation  acts  of  all  the  States  require 
that  the  articles  of  incorporation  shall  be  acknowledged  by  the 
incorporators,  before  some  officer  authorized  by  law  to  take 
acknowledgments  of  deeds.  There  must  in  all  cases  be  a  proper 
number  of  acknowledgments.8  Where  the  statutes  designate 
some  particular  officer  to  take  the  acknowledgment,  the  charter 
is  voidable  if  taken  before  any  other  official.9  A  failure,  on  the 
part  of  the  officer  taking  the  acknowledgment,  to  certify  that  the 

i  State  v.  Critchett,  37  Minn.  13;  32  No.  5816;  Warner  v.  Callender,  20  O.  St. 

X.  W.  787  ;  People  v.  Company,  97   Cal.  190. 

276;   32  Pac.  236;  Hughes  v.  Company,  7  In   re  Charter  Acknowledgment,   28 

34  Md.  316;  W.  B.  &  L.  Ass'u  v.  Colo-  Pa.  Co.  Ct.  Rep.  187. 

man,  89  Pa.  St.  428.  8  People  v.  Company,  97  Cal.  276  ;   32 

?  Humphreys  v.  Moonev,  5  Col.  282.  Pac.  236;  Hughes   v.  Company,   34  Md. 

8  See  L.  O.  A.  &  N.  Ry.  Co.  v.  Mason,  316;    Doyle  v.   Mizner,  42  Mich.  332;  3 

16  N.  Y.  451.  N.  W.  968  ;  Kaiser  v.  Bank,  56  la.  104 ;  8 

*  Trustee,  etc.  v.  Campbell,  46  La.  Ann.  N.  W.  772;   State  v.  Critchett,  37  Minn. 

1543;  21  So.  184.  13  ;  32  N.  W.  787. 

6  State  v.  Beck,  81  Ind.  500.  9  Shields  v.  Company,  94   Tenn.    123, 

8  Griffen    v.    Company,    Fed.    Cases,  28  S.  W.  668  ;  State  v.  Lee,  21  O.  St.  662  ; 

Simmings  v.  Association,  26  O.  St.  483. 

79 


§  72    INCORPORATION   AND  ORGANIZATION   OP   CORPORATIONS.   [PART  I. 

incorporators  were  personally  known  to  him  will  not  invalidate 
the  incorporation  proceedings.1 

Even  where  the  statutes  require  the  organization  meetings  to 
be  held  within  the  domiciliary  State,  it  is  not  necessary  that  the 
articles  be  signed  and  acknowledged  therein.2 

The  omission  of  immaterial  parts  of  the  acknowledgment  does 
not  operate  to  render  the  incorporators  liable  as  partners.3  In 
order  to  entitle  articles  to  be  filed  with  the  proper  State  official, 
they  must  be  signed  and  acknowledged  in  all  respects  as  required 
by  law.4 

§  72.  Publication  of  Articles.  —  In  ten  of  the  Commonwealths 
the  law  requires  that  either  the  petition  for  a  charter  or  the 
charter  itself  or  the  substance  thereof  shall  be  published  for  a 
prescribed  length  of  time.  The  original  theory  upon  which  such 
requirements  are  based  appears  to  have  been  that  the  creation 
of  a  corporation  should  be  attended  with  all  possible  publicity, 
in  order  that  all  the  world  might  acquaint  itself  with  the  fact 
that  it  is  dealing  with  a  corporation  and  not  with  a  natural  per- 
son.6 At  the  present  time  the  legislatures  seem  to  proceed  on 
the  basis  of  furnishing  the  newspapers  with  additional  paid 
matter  on  the  theory  that  they  need  it  in  their  business. 
However  that  may  be,  it  still  remains  true  that  the  statutes 
governing  publication  of  articles  must  be  substantially  com- 
plied with,  otherwise  the  charter  may  be  declared  void  at  the 
instance  of  the  State.7 

Sometimes  due  publication  of  articles  carries  with  it  immu- 
nity from  personal  liability.8 

It  has  been  held  that  the  publication  of  more  than  the  law 
requires  will  not  invalidate  the  legality  of  the  publication.9 

1  People  v.  Cheeseman,  7  Col.  376;  Bigelow  t\  Gregory,  7.*?  111.  197;  Field  v. 
3  Pac.  716.  See  also  Boston  Acid  Mfg.  Cooks,  16  La.  Ann.  153;  Hunt  v.  Salis- 
Co.  v.  Moring,  15  Gray  (Mass.),  211.  bury,  55  Mo.  310;    Indianapolis  Min.  Co. 

2  Humphreys  v.  Mooney,  5  Col.  282.  v.   Herkimer,   46    Ind.    142;     Holmes   v. 

3  Stout  v.  Zulick,  48  X.  J.  L.  599;  Gilliland,  41  Barb.  568;  Davenport  Nat. 
7  Atl.  362.  Bank  v.  Davis,  43  la.  424  ;  15  N.  W.  865. 

4  Doyle  v.  Mizner,  42  Mich.  332  ;  3  8  Davenport  Nat.  Bank  v.  Davis,  43  la. 
N.  W.  968;  Montgomery  v.  Forbes,  148  424;  15  N.  W.  865.  See,  however,  Clark 
Mass.  249 ;  19  N.  E.  342.  v.  Richardson,  17  Ky.  Law  Rep.  514  ;  31 

•  See  In  re  Church,  etc.,  14  Phil.  121 ;  S.  W.  878;   Wing  v.  Slater,  19  R.  I.  597; 

Seaton  v.  Grimm,  110  la.  145;  81  N.  W.  35  Atl.  302;  Heinig  v.  Company,  81  Ky. 

225.  300;  5  Ky.  Law  Rep.  281. 

7  Clegg  v.  Company,  61    la.   121;    15  9  In  re  Sowego  Water  Co.,  38  W.  N.  C. 

N.  W.  865  ;  Thornton  v.  Balcom,  85  la.  198 ;  (Pa.)  148. 

80 


CHAP.  II.]  PROCURING  THE  CHARTER.  §  75 

§  73.  Affidavit  as  to  Stock  Subscriptions.  —  The  laws  of 
Florida,  Georgia,  Illinois,  Kansas,  Michigan,  Missouri,  Ohio, 
Oregon,  Pennsylvania,  South  Carolina,  Texas,  Utah,  Vermont, 
and  West  Virginia  require  in  addition  to  the  ordinary  ac- 
knowledgment of  the  execution  of  the  articles,  that  the  same 
be  accompanied  by  an  affidavit  showing  that  the  amount  of  stock 
required  by  law  as  a  preliminary  to  doing  business  as  a  corpo- 
ration has  been  duly  subscribed.1  The  same  matter  appears 
in  the  certificate  of  organization  required  in  Arkansas,  Con- 
necticut,  Indian  Territory,   Maine,  and  Virginia. 

On  the  other  hand,  the  incorporation  acts  of  Alabama,  Cali- 
fornia, Delaware,  Idaho,  Kentucky,  Nevada,  New  Jersey,  New 
York,  North  Carolina,  Ohio,  Virginia,  and  Washington  merely 
require  that  the  amount  of  stock  subscriptions  be  set  forth  in  the 
articles. 

As  to  the  content  of  the  affidavits  as  to  stock  subscriptions,  it 
is  sufficient  if  they  serve  to  show  clearly  that  the  statute  rela- 
tive to  the  same  has  been  substantially  complied  with.2 

Unless  the  statute  designates  some  officer  before  whom  such 
affidavit  be  sworn  to,  it  may  be  made  before  any  officer  authorized 
to  administer  oaths  and  to  certify  to  the  same.3 

§  74.  Anti-Trust  Affidavit.  —  Some  few  of  the  States  —  such,  for 
example,  as  South  Dakota,  Missouri,  and  Illinois  —  require  either 
of  the  incorporators  before  organization  or  of  certain  designated 
officers  of  the  corporation  after  organization  that  they  certify 
and  make  oath  to  the  effect  that  the  corporation  is  organized  for 
the  transaction  of  a  lawful  business  and  not  for  the  purpose  of 
enabling  the  corporation  to  violate  the  provision  of  the  anti-trust 
act  in  force  in  that  particular  Commonwealth.  Just  what  prac- 
tical purpose  the  requirements  here  referred  to  serve,  it  would 
be  difficult  to  say.  In  its  practical  opex*ation  it  is  usually  a  mere 
formality,  and  has,  so  far  as  observation  goes,  seldom  served  any 
useful  purpose.4 

§  75.  Special  Requirements  in  Particular  States.  —  Owing  to 
the  varied  requirements  existing  in  the  several  States  and  Terri- 
tories relative  to  the  steps  necessary  to  procure  charters  under 

1  People  v.  Company,  45  Cal.  306.  0.  St.  668  ;  32  N.  E.  933  ;   People  v.  Com- 

8  People  v.  Company,  45  Cal.  306;   B.  pany,  121  N.  Y.  582;  24  N.  E.  834;  State 

&P.  Ry.  Co.  v.  Hatch,  20  N.  Y.  157.  v.  Standard   Oil   Co.,  49  0.  St.   137;   30 

8  Wood  v.  Bank,  9  Cowen,  194.  N.  E.  279. 
*  See  Ohio    St.    Ily.    Co.    v.    State,  49 

6  81 


§  76    INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

the  laws  thereof,  it  will  be  impossible  to  do  more  than  merely 
refer  to  a  few  of  these  requirements  not  already  discussed. 
Under  the  statutes  of  some  of  the  States  it  is  necessary  before  a 
charter  can  issue  that  the  capital  stock  either  be  subscribed  for 
in  whole  or  in  part.1  In  others  it  is  necessary  that  all  or  part 
of  the  authorized  capital  stock  be  actually  paid  in.2  However, 
in  many  of  the  States  it  is  not  necessary  that  the  capital  stock  be 
subscribed  for  as  a  condition  precedent  to  corporate  existence.3 
Some  of  the  States  require  that  the  certificate  shall  show  the 
amount  of  the  capital  stock,  the  amount  actually  paid  in,  and 
that  it  shall  give  the  names  and  residences  of  the  shareholders, 
and  the  amount  of  stock  which  each  has  subscribed.  Where 
such  provisions  exist  substantial  compliance  therewith  is  essen-, 
tial  to  the  creation  of  a  de  jure  corporation.4 

Sometimes  incorporation  acts  require  that  the  certificate  shall 
state  the  maximum  amount  of  indebtedness  which  the  corpora- 
tion is  authorized  to  incur.5  In  Indiana  the  articles  must  contain 
an  impression  or  description  of  the  seal.6  In  Georgia  charters 
are  issued  by  the  courts  upon  petition  therefor.  Here  as  well  as 
in  other  cases  the  statute  governing  the  matter  must  be  substan- 
tially complied  with.7 

In  some  States  the  law  requires  that  the  certificate  shall  set 
forth  the  name  and  location  of  the  principal  place  of  business  of 
the  corporation.  Such  provision  must  be  substantially  complied 
with.8 

In  Pennsylvania,  where  the  incorporation  act  required  the 
application  for  a  charter  to  show  the  place  of  business  of  the 
proposed  corporation,  and  the  application  merely  stated  location 
of  its  office,  it  was  held  insufficient.  This  for  the  reason  that  a 
corporation  may  have  its  office  in  one  place  and  its  place  of 
business  in  another.9 

§  76.  Powers  of  State  Officials  Relative  to  Accepting  or  Reject- 
ing Articles.  —  Where  the  statute  either  expressly  or  by  implica- 

i  J.   C.   G.   Company  v.   Dwight,   29         «  See  Vawter  v.  Franklin  College,  53 

N.  J.  Eq.  246 ;  Boyd  v.  Company,  90  Pa.  Ind.  88. 
gt   169.  7  Van  Pelt  v.  Association,  79  Ga.  439  ; 

2  People  v.  Chambers,  42  Cal.  201.  4  S.  E.  501 ;  In  re  Deveaux,  54  Ga.  637. 

3  See  ante,  sec.  2.  8  Montgomery   v.    Forbes,    148    Mass. 
*  Hendrix    v.   Academy,   73   Ga.  437;  249;    19    N.   E.  342;    Ex  parte    Spring 

Boiling  f.Le  Grand,  87  Ala.  482;  6  Sou.  332.     Valley  Works,  17  Cal.  132. 

5  Sweney  v.  Talcott,  85  la.  103  ;    52  9  In    re    Enterprise    Mutual    Benefit 

N.  W.  106.  Ass'n,  10  Pa.  380. 

82 


CHAP.  II.]  PROCURING   THE   CHARTER.  §  16 

tion  bestows  upon  State  officials  the  duty  of  examining  articles 
of  incorporation  and  passing  upon  their  legal  sufficiency  and 
authorizes  State  officials  to  certify  that  the  incorporators  have 
become  a  corporation,  then  the  issue  of  such  certificate  becomes 
an  adjudication  that  the  corporation  has  been  duly  formed  until 
the  State  has  vacated  the  charter  by  proper  proceedings  taken  in 
the  courts.1  Usually  this  duty  is  bestowed  upon  the  State  depart- 
ment which  is  a  branch  of  the  executive,  and  cannot  therefore 
pass  upon  questions  which  are  purely  judicial.2  It  is  confined  to 
an  examination  as  to  whether  the  purposes  of  the  proposed  cor- 
poration are  legal  on  their  face  and  whether  conditions  precedent 
have  been  complied  with  so  that  a  charter  should  properly  issue.* 

The  main  points  to  which  State  officials  should  address  them- 
selves in  passing  upon  corporation  papers  presented  to  them  are 
as  follows:  (1)  Have  the  requisite  number  of  incorporators 
signed  the  articles  of  incorporation  ?  (2)  Have  the  articles 
been  properly  acknowledged  by  the  incorporators  ?  (3)  Is  the 
corporate  name  mentioned  in  the  articles  one  that  can  be  law- 
fully used  by  the  proposed  corporation  ?  (4)  Have  the  statu- 
tory requirements  relative  to  the  contents  of  the  articles  of 
incorporation  been  substantially  complied  with?4 

Generally  speaking,  permission  to  file  charters  may  be  refused 
upon  the  following  grounds:  If  the  name  of  the  proposed 
corporation  is  identical  or  closely  resembles  that  of  an  existing 
corporation,  the  State  officials  may  exercise  their  discretion  and 
refuse  to  pass  the  charter.5 

It  has  been  held,  however,  by  a  court  of  excellent  authority 
that  a  statute  prohibiting  the  corporation  from  assuming  a  name 
in  use  by  any  other  organization  or  so  closely  analogous  to  it  as  to 
mislead  the  public  is  designed  to  protect  domestic  corporations.6 

1  Boyce  v.  M.  E.  Church,  46  Md.  359  ;  Charter  St.  L.  Ass'n,  19  Pa.  County 
D.  II.  R.  R.  Co.  v.  Marsh,  Fed.  Cas.  4014.  Ct.  Rep.    25  ;   In    re    DuQuesne   College 

2  Granby  Co.  v.  Richards,  95  Mo.  Charter,  12  Pa.  County  Ct.  Rep.  491; 
106;  8  S.  W.  246;  Van  Pelt  v.  Gardner,  Woodberry  v.  McClurg,  78  Miss.  831  ;  -2'J 
54  Neb.  701 ;  75  N.  W.  874.  Sou.  514. 

8  P.    R.    T.    Rd.   Co.    Charter   Appli-  6  State  v.  McGrath,  92  Mo.  355  ;  5  S.  W. 

cation,  20  Pa.  County  Ct.   Rep.  151  ;  X.  29;  American  ('lav  Mfg. Co.  w.  American 

M.  G.  T.  Co.  v.  N.  G.  f .  Co.,  21  Pa.  County  Clay  Mfg.  Co.,  198  Pa.  St.  189  ;  47  Atl. 

Ct.  Rep.  393  ;   People  v.  Company,  130  111.  936;  People  v.  Payne,  161  N.  Y.  229  ;  55 

268;  22  N.E.  798.  N    E.  849. 

4  State    v.  National  Inv.  Co.,  88   Wis.  6  People  v.  II.  L.   A.  Co.,   Ill    Mich. 

512;     In   re    Application  for   Charter,    5  405;  69  N.  W.  653. 
Pa.  Dia.  Rep.  243 ;  In   re   Application  for 

83 


§  78    INCORPORATION   AND   ORGANIZATION   OP   CORPORATIONS.    [PART  I. 

Generally  speaking,  the  action  of  the  Secretary  of  State  in 
issuing  a  license  or  certificate  of  incorporation  is  ministerial.1 
Neither  State  officials  nor  the  courts  can  with  respect  to  incor- 
poration add  new  conditions  to  those  prescribed  by  statute.2 
Generally,  the  test  of  the  extent  of  powers  of  ministerial  offices 
is  the  right  to  compel  performance  by  mandamus.3 

It  is  an  almost  universal  rule  that  after  the  certificate  is  once 
issued,  the  officer  who  issues  it  has  no  power  to  revoke  the  cer- 
tificate. For  this  purpose  application  must  ordinarily  be  made 
to  the  courts.4 

§  77.  Right  to  Mandamus  State  Officials  for  refusing  to  file 
Articles.  —  Ordinarily  mandamus  is  the  proper  remedy  where 
State  officials  refuse  to  file  a  certificate  of  incorporation,  pro- 
vided the  duty  of  receiving  and  filing  the  same  is  lodged  with 
them. 5 

§  78.  Organization  Tax.  —  By  the  term  "organization  tax,"  as 
here  used,  is  to  be  understood  the  amount  of  money  exacted  by  the 
State  from  individuals  in  return  for  a  grant  from  the  former  to 
the  latter  of  the  right  or  privilege  of  being  a  corporation  ;  that  is, 
of  doing  business  in  a  corporate  capacity  and  under  the  privilege 
or  franchise  which  when  incorporated  the  company  may  exercise. 
The  right  or  privilege  to  be  a  corporation  or  to  do  business  as  such 
body  is  one  generally  deemed  of  value  to  the  corporation,  which  is 
the  right  or  privilege  by  which  several  individuals  may  unite  them- 
selves under  a  common  name  and  act  as  a  single  person  with  a 
succession  of  members  without  dissolution  or  suspension  of  busi- 
ness and  with  a  limited  individual  liability.  The  grant  of  such  a 
right  or  privilege  rests  entirely  in  the  discretion  of  the  State,  and 
may  unquestionably  be  accompanied  with  such  conditions  as  the 
legislature  thereof  may  judge  most  befitting  to  its  interests  and 
policy. 

Thus  the  latter  may  require  of  the  incorporators,  as  a  condition 
to  the  original  grant  of  the  franchise  as  well  as  of  its  continued 
exercise,  that  the  corporation  pay  a  specific  sum  to  the  State.6 

i  People  v.  C.  G.  T.  Co.,  130  111.  269 ;  5  People  ex  rel.  N.  Y.  P.  Co.  v.  Kice, 

22  N.  E.  798.  128  N.  Y.  59,  28  N.  E.  251 ;    H.  W.  I.  Co. 

2  Hastings  v.  A.  P.  Co.,  29  Wash.  224  ;  v.  N.  Y.  H.  I.  Co.,  140  N.  Y.  94 ;  35  N.  E. 
69  Pac.  776.  417  ;   State   v.  Taylor,    55   O.    St.   61,  44 

3  F.  B.  Co.  v.  Wood,  14  Ga.  80.  N.  E.  513 ;  State  v.  McGrath,  92  Mo.  355 ; 

4  See,  however,  I.  W.  C.  Co.  v.  Pear-  5  S.  W.  29  ;  Illinois  Watch  Case  Co.  u. 
son,  140  111.  423 ;  31  N.  E.  400 ;  In  re  N.  I.  Pearson,  140  111.  423  ;  31  N.  E.  400. 

E.  Co.,  142  Pa.  St.  450;  21  Atl.  879.  6  Home  Insurance  Co.  v.  People  of  thb 

84 


CHAP.  II.]  PROCURING   THE   CHARTER.  §  78 

There  are  two  broad  grounds  for  sustaining  the  power  of  the 
State  to  impose  organization  taxes.  The  first  of  these  is  their  in- 
herent power  to  regulate  corporations.  Corporate  capacity  itself 
is  a  franchise.  No  persons  can  make  themselves  a  body  corporate 
and  politic  without  legislative  authority.1  The  other  ground  re- 
ferred to  is  the  inherent  power  of  the  State  to  enact  such  legislation 
as  may  be  necessary  in  order  to  raise  revenue  for  State  purposes.2 

The  term  "organization  tax"  should  be  carefully  distinguished 
from  the  phrase  "  franchise  tax  ;  "  the  latter  referring  to  the  tax 
imposed  by  the  State  upon  corporations  for  the  privilege  of  doing 
business  in  a  corporate  capacity  after  incorporation.  All  of  the 
States  and  Territories  with  the  exception  of  Arizona,  Arkansas, 
District  of  Columbia,  Georgia,  Indian  Territory,  Louisiana,  and 
Oklahoma,  impose  graduated  organization  taxes  upon  corporations 
organized  under  their  laws.  There  can  be  no  question  as  to  the 
validity  of  such  graduated  taxation.3  The  same  is  true  even 
when  in  such  matters  the  legislature  distinguishes,  as  is  the  case 
in  West  Virginia  and  New  Hampshire,  between  resident  and  non- 
resident domestic  corporations.4 

At  the  present  time  it  is  a  rule  of  almost  universal  application 
that  the  payment  of  an  organization  tax  is  a  condition  precedent 
to  corporate  existence.5  Organization  taxes  cannot  be  evaded  on 
the  ground  that  the  corporation  calls  itself  an  "  eleemosynary  " 
corporation  when  in  fact  it  is  otherwise.6 

The  State  is  not  bound  to  permit  corporations  to  consolidate  or 
to  extend  their  corporate  existence,  and  for  this  reason  it  may 
lawfully  impose  the  payment  of  an  organization  tax  as  a  condition 
precedent  to  consolidation  or  to  the  extension  of  its  corporate 
existence.7 

State  of  New  York,   134  U.   S.  594;  10  4  B.  J.  C.  C.  Co.  v.  Scherr,  50  W.  Va. 

S.    ft.    593;   33   L.   E.    1025;  Gordon    v.  533;  40  S.  E.  514. 

Appeal  Tax  Court, 44  U.S.  (3  How.)  133;  5  Union    Horseshoe    Works    v.   Lewis, 

11  Law  Ed.  529;  B.  &  0.  Ry.  Co.  v.  Mary-  1    Abb.    (U.   S.)    518;    Fed.   Cases,    No. 

land,   88   U.   S.   (21    Wall  )  456  ;  22  L.  E.  14383;  Combined  Saw   &    Planet   Co.    v. 

678;  People  v.  Rose.  210  111.  582;  71  N.  E.  Flournoy,   88   Va     102'.);   14    S.    K.    976; 

580.  Edwards  v.  Denver  &  R.  G.  R.  Co.,  13  Col. 

i  California  v.  Company,  127  U.  S.  1  ;  59;  21    Pac.   1611;  State    r.    Rotwitt,    17 

8  S.  Ct.  1073  ;  32  L.  E.  157.  Mont,  41  ;  41  Pac.  1004  ;   Ashley  v.  Ryan 

2  Baker  v.  Cincinnati,  11  O.  St.  534;  49  0.  St.  504;  31  N.  E.  721  ;  H.  M.  Co. 
W.   U.  T.  Co.  v.  Attorney-General.   125  v.  Bremer,  12  R.  L  491. 

U.  S.  530;  8  S.  Ct.  961;   31  L.  E.  790.  '    State    v.    Lesueur,    99    Mo.    552;    13 

3  See  Ashley  v.  Ryan,  49  0.  St.  504;     S.  W.  237. 

31  N.  E.  721  ;   153  U.  S.  436;  14  S.  Ct.  7  Ashley  v.  Ryan,  49  O.   St.  504;    31 

865;  38  L.  E.  773.  N.    E.    721;    153    U.    S.    436;    14    S.    Ct. 

86 


§  80  INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.  [PART  I. 

§  79.  Form  in  which  Charter  is  granted.  —  In  only  twenty-nine 
of  the  States  do  the  corporation  acts  expressly  provide  for  the 
issuance  of  a  certificate  of  incorporation  or  charter  by  State 
officials.  In  some  few  of  the  remainder  the  power  to  issue  such 
instruments  is  assumed  by  the  officers  having  the  matter  in  charge 
without  any  express  authorization  therefor  in  the  statute.  In  the 
remaining  States  proof  of  incorporation  is  usually  had  by  pro- 
curing certified  copies  of  the  articles  of  incorporation.  The  mat- 
ter becomes  one  of  practical  importance  in  connection  with  the 
right  of  third  parties  to  collaterally  attack  not  only  the  corporate 
existence  but  the  corporate  purposes  and  powers  as  well.  This 
matter  has  already  been  discussed  at  length  in  a  previous  section.1 
Ordinarily  the  commencement  of  corporate  existence  dates 
from  the  time  when  the  certificate  of  incorporation  is  issued. 
Where  the  statute  expressly  provides  for  the  issuance  of  a  charter 
by  State  officials  the  latter  have  no  discretion  in  the  matter,  and 
must  issue  the  same  upon  demand  of  the  parties  who  have  legally 
entitled  themselves  to  the  same.2  The  certificate  must  be  issued 
immediately,  and  must  be  in  the  form,  if  any,  prescribed  by  the 
statute.3  The  Secretary  of  State  should  always  affix  his  seal  to 
the  certificate  of  incorporation.4 

8  80.  Filing  and  Recording  in  Local  County  Offices.  —  Generally 
speaking,  it  is  part  of  the  plan  adopted  by  the  various  legislatures 
in  the  enactment  of  general  incorporation  acts,  to  provide  in 
addition  to  requiring  that  articles  of  incorporation  be  filed  with 
some  designated  State  official,  that  they  always  be  filed  in  one 
or  more  local  county  offices.  Usually  the  latter  requirement  is 
confined  to  the  provision  that  they  be  filed  in  the  county  where 
the  corporation's  domiciliary  office  is  located.  However,  in  some 
few  of  the  States  such  articles  must  be  filed  in  every  county 
wherein  the  corporation  transacts  its  business  or  holds  real 
property.  In  some  of  the  States,  such  as  California  and  Maryland, 
more  importance  appears  to  be  attached  to  the  filing  of  the  articles 
in  the  local  county  office  than  with  State  officials.6 

865 ;  38  L.  E.  773 ;  People  v.  Pfister,  57  Ass'n  v.  Clarke,  61  Me.  351 ;    Sparks  v 

Ca)  '532  Company,  87  Ala.  294  ;  6  So.  195  ;  People 

"   1  See  ante,  §  6.  v.  Payn,  161  N.  Y.  229;  55  N.  E.  849. 

2  State  t>.  Taylor,  55  0.  St.  61  ;  44  N.  E.  4  JBenner  v.  State,  7  Lea  (Tenn.),  682. 
513  ;  Sparks  v.  Company,  87  Ala.  294  ;  6          6  See  N.  H.  C.  &  M.  Co.  v.  Woodberry, 
So.  195.  14  Cal.  434. 

3  Stowe  v.  Flagg,  72   111.  397  ;  R.  F 

86 


CHAP.  II.]  PROCURING   THE   CHARTER.  §  81 

The  purpose  of  filing  articles  in  county  offices  has  been  said  to 
be  in  order  that  persons  dealing  with  the  corporation  may  have  an 
easy  and  public  inspection  of  the  basis  of  its  corporate  organi- 
zation.1 With  some  few  exceptions  corporate  existence  is  not 
made  to  depend  upon  the  filing  of  the  articles  in  the  local  county 
offices.  In  any  event,  where  such  filing  is  not  had,  the  corporation 
is  treated  as  a  corporation  de  facto,  if  not  de  jure.2  The  fore- 
going is  certainly  true  in  the  absence  of  any  proceedings  by  the 
State  in  the  nature  of  quo  warranto.3 

In  some  States  the  filing  of  articles  in  designated  offices  is 
specifically  made  a  condition  precedent  to  the  legal  existence  of 
the  corporation,  while  in  others  it  is  merely  made  a  condition 
precedent  to  the  right  of  the  corporation  to  engage  in  business  as 
such.4  It  has  been  held,  however,  in  Missouri  that  in  order  to 
the  creation  of  corporate  existence  articles  must  be  filed  in  both 
State  and  county  offices.0 

At  the  present  time  it  is  safe  to  say  that  as  to  third  parties  the 
validity  of  corporate  existence  will  be  presumed  even  when 
articles  have  not  been  filed  in  local  county  offices  as  required. 
But  in  some  jurisdictions  attempts  have  been  made  to  hold  the 
incorporators  liable  as  partners  under  such  conditions.6 

S  81.  Distinction  between  de  jure  and  de  facto  Corporations.  —  A 
corporation  de  jure  is  one  whose  right  to  exercise  corporate 
functions  would  prove  invulnerable  if  assailed  by  the  State  in  quo 
warranto  proceedings.7  A  de  facto  corporation,  on  the  other  hand, 
is  one  the  legality  of  whose  existence  may  be  inquired  into  by  the 
State  in  quo  warranto  proceedings.  The  general  rule  is  that  to 
prove  the  existence  of  a  corporation  de  facto  it  is  necessary  to 

i  Loverin  v.  McLaughlin,  161  111.  417;  N.  W.  1056;  In  re  Shakopec  Mfg.  Co.,  37 

44  N.  E.  99.  .Minn.  91  ;  33  N.   W.  219;  G.  M.  &  S.  Co. 

2  Curtis  v.  Tracey,  62  111.  Ap.  49  ;  B.  v.  Richards,  95  Mo.  106;  8  S.  W.  246. 
&  T.  Co.  v.  Gade,  55  111.  181;   Johus  v.  5  Hurt  v.  Salisbury,  55  Mo.  310. 
People,  25  Mich.  499  ;  Whitney  v.  Wyman,  6  See  P.  &-G.  T.  Co.  v.  Bobb,  88  Ky. 
101  U.  S.  392.  226;  10  S.  W.  794;  Rassbeck  v.  Dester- 

3  Bankiv  Davies,  43  Iowa,  424  ;  Martin  richer,  55  How.  Pr.  516  ;  4  Abb.  New 
v.  Deetz,  102  Cal.  55  ;  36  Pac.  368 ;  I.  T.,  Cases,  444  ;  F.  G.  B.  &  T.  Co.  v.  Gade,  55 
etc.  Co.  v.  Herkimer,  46  Ind.  142;  Hum-  111.  181;  N.  Y.  N.  Exchange  Hank  v. 
phreys  v.  Mooney,  5  Col.  282;  Sims  v.  Crowell,  177  Pa. 313;  35  At!.  618;  Clegg 
Commonwealth,  24  Kv.  L.  Rep.  159;  71  v.  Company,  61  la.  121;  15  N.  W.  865; 
8.  W.  929;  Childs  p.  Hard,  32  W.  Va.  Gent  v.  Company,  107  111.  652;  Childsv. 
66;  9  S.  E.  362;  Abbott  v.  Co.,  4  Neb.  Hard,  32  W.  Va.  66;  9  S.  E.  862. 

416.  7  Clapp  v.  Company,  40  Neb.  470;  28 

*  Bergeron  v.  Hobbs,  96  Wis.  641  ;  71     N.  W.  956. 

87 


§  82      INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.     [PART  I. 

show  (1)  an  act  authorizing  the  creation  of  a  corporation  of 
that  character;  (2)  an  application  duly  made  thereunder  by 
the  requisite  number  of  incorporators  praying  for  incorporation. 
(3)  It  is  sometimes  necessary,  although  not  always,  to  show- 
user  thereunder.1 

§  82.  Right  of  Parties  other  than  the  State  to  collaterally  im- 
peach Corporate  Existence.  —  The  right  here  referred  to  has  already 
been  considered  somewhat  at  length  in  connection  with  a  discus- 
sion of  the  right  of  third  parties  to  collaterally  attack  corporate 
purposes  and  powers.2  There  are  some  additional  matters, 
however,  not  already  discussed  to  which  attention  will  now  be 
called. 

As  has  already  been  suggested,  the  courts  have  taken  varied 
and  conflicting  views  relative  to  the  right  of  parties  other  than 
the  State  to  collaterally  attack  the  existence  of  a  corporation  with 
whom  they  chance  to  be  involved  in  litigation.  The  diverging 
views  here  referred  to  may  be  classified  as  follows :  (1)  the  view 
that  the  State  alone  can  test  the  question' whether  or  not  a  corpo- 
ration which  has  procured  a  charter  from  the  proper  State  officials 
is  in  law  as  well  as  in  fact  a  corporation ; 3  (2)  the  view  that  this 
question  may  be  inquired  into  by  third  parties,  but  that  it  is  suffi- 
cient in  such  cases  for  the  corporation  to  show  substantial  com- 
pliance with  the  conditions  prescribed  by  the  general  incorporation 
act  in  order  to  prove  that  it  is  a  corporation  de  jure  as  well  as  de 
facto  ;  4  (3)  the  view  that  the  matter  may  be  inquired  into  by  third 
parties,  and  that  under  such  circumstances  it  is  necessary  that  the 
corporation  shall  show  strict  compliance  with  each  and  every  con- 
dition precedent  prescribed  by  the  general  incorporation  act  in 
order  to  establish  the  fact  that  it  is  a  corporation  de  jure  as  well 
as  de  facto .5 

For  purpose  of  convenience  these  three  diverging  views  may  be 

i  Stout  v.  Zulick,  48  N.  J.  Law,  599  ;  7  Co.,  157  111.  641  ;  42  N.  E.  153  ;  In  re  Gibbs 

Atl.  362  ;  Haas  v.  Bank,  41  Neb.  754  ;  60  Estate,  157  Pa.  St.  59  ;  27  Atl.  383. 

N.  W.  85;  Duggan  v.  Company,  11   Col.  2  See  ante,  §  6. 

113  ;  17  Pac.  105  ;  Central  Ag.,etc.  Ass'nr.  3  See  ante,  §  6. 

Company,  70  Ala.  120;  Baker  v.  Backus,  4  Jones  v.   Company,  21   Col.  263;  40 

32  111.  79;  Hughes  v.  Bank,  5  Litt.  (Ky.)  Pac.  457  ;    Stout   v.   Zulick,  48    N.  J.  L. 

45  ;    Buffalo,  etc.    Ry.   Co.   v.    Cary,   26  599  ;  7  Atl.  362  ;  Finnegan  v.  Noerenberg, 

N.  Y.  75;   Finnegan    v.    Noerenberg,  52  52  Minn.  239  ;  53  N.  W.  1150. 

Minn.  239;  53  N.  W.  1150;  Continental  5  Mokelumne,   etc.  Co.  v.  Woodbury, 

Trust  Co.  v.  T.,  etc.  Ry.  Co.,  82  Fed.  642  ;  14  Cal.  424 ;  Lucas  v.  Bank,  2  Stew.  (Ala.) 

City  of  Guthrie  v.  Territory,  1  Okla.  188 ;  147. 
31  Pac.  190;  A.  L.,  etc.  Co.  v.  M.,  etc.  R. 

88 


CHAP.  II.]  PROCURING   THE   CHARTER.  §  82 

distinguished  as  follows :  referring  to  the  first  as  to  the  true,  the 
second  as  the  substantial  compliance,  and  the  third  as  the  strict 
compliance  rule.  Space  will  permit  of  discussion  here  of  only 
the  first  of  the  rules  just  referred  to. 

The  legislatures  alone,  as  has  been  shown,  can  create  a  corpora- 
tion. Under  the  modern  practice  these  bodies  have  passed  general 
incorporation  acts  entrusting  the  execution  of  the  law  to  the 
executive  department  of  the  government.  Under  the  rule  now 
generally  established,  either  by  statute  or  judicial  construction, 
in  most  of  the  States  a  corporation  becomes  a  corporation  de  facto 
from  the  moment  the  charter  or  certificate  of  incorporation  is 
issued  by  the  proper  State  authorities.1  The  basis  of  holding 
such  certificates  as  conclusive  of  corporate  existence  as  against 
all  the  world  except  the  State  is  that  where  by  reason  of  such 
certificate  a  corporation  is  held  out  to  the  world  as  ready  to  under- 
take business,  most  disastrous  consequences  would  follow  to  com- 
mercial undertakings  if  any  private  person  was  allowed  to  go  back 
and  enter  into  an  examination  of  the  circumstances  attending  the 
original  incorporation.2 

The  power  which  creates  the  corporation  it  is  needless  to  say 
should  alone  have  the  power  to  take  it  away.  It  should  not  be 
permitted  to  parties  other  than  the  State  for  this  reason  to  col- 
laterally impeach  corporate  existence,  for  to  permit  such  impeach- 
ment would  be  in  legal  effect  to  permit  third  parties,  for  the 
purpose  at  least  of  that  particular  action,  to  destroy  the  effect 
of  the  previous  action  of  the  State  in  the  premises.  On  grounds 
of  public  policy  as  to  all  parties  but  the  State,  it  should  under 
such  circumstances  be  conclusively  presumed  that  the  statutory 
requirements  relative  to  incorporation  have  been  duly  complied 
with.3  A  corporation  must  of  necessity  be  presumed  to  be 
rightfully  in  possession  of  the  franchise  and  rightfully  exercis- 
ing the  power  which  the  legislative  grant  confers.  Individual 
right  is  not  invaded  if  the  presumption  is  true  in  fact  and  there 
is  no  usurpation.  It  is  the  State  —  the  sovereign  —  whose 
rights  are  invaded  and  whose  authority  is  usurped.  The  in- 
dividual could  not  create  the  corporation,  could  not  grant,  define, 
or  limit  its  {towers ;  any  grant  of  these  by  the  sovereign  cannot 

1  See  ante,  §  6.  3  Tar  River  Nav.  Co.  v.  Ncal,  S  Hawki 

2  Lake    Superior  Co.  v.  Morrison,  22     (N.  C),  520;   Welch  v.   Bank,   L22  N.  V. 
Canada  C.  P.  224.  177  ;  25  N.  10.  269. 

89 


§  83    INCORPORATION  AND    ORGANIZATION    OF    CORPORATIONS.    [PART  I. 

lessen  his  right.  There  can  consequently  be  no  cause  of  com- 
plaint by  the  citizen,  and  no  right  to  inquire  whether  the  corpo- 
rate existence  is  rightful,  de  jure,  or  merely  colorable.1 

Corporations  may  exist  either  de  jure  or  de  facto.  If  of  the 
latter  class,  they  are  under  the  same  protection  of  the  law  and 
governed  by  the  same  legal  principles  as  those  of  the  former  so 
long  as  the  State  acquiesces  in  their  existence  and  exercise  of  cor- 
porate functions.  A  private  citizen  whose  rights  are  not  invaded 
and  who  has  no  cause  of  complaint  has  no  right  to  inquire  col- 
laterally into  the  legality  of  its  existence.  This  can  only  be  done 
in  a  direct  proceeding  on  the  part  of  the  State  from  whom  is  de- 
rived the  right  to  exist  as  a  corporation  and  whose  authority  is 
usurped.2 

A  corporation  de  facto  may  legally  do  and  perform  every  act 
and  thing  which  the  same  entity  could  do  and  perform  were  it  a 
de  jure  corporation.  As  to  all  the  world  except  the  paramount 
authority  under  which  it  acts  and  from  which  it  receives  its 
charter,  it  occupies  the  same  position  as  though  in  all  respects 
valid,  and  even  as  against  the  State,  except  in  direct  proceedings 
to  arrest  its  usurpation  of  powers,  its  acts  are  to  be  treated  as 
efficacious.3 

Finally,  it  may  be  observed  that  the  principle  here  contended 
for  has  been  held  by  at  least  one  court  to  be  applicable  to  a  case 
where  a  corporation  had  incorporated  under  an  unconstitutional 
law,  yet  nevertheless  the  validity  of  the  corporation's  existence 
could  not  be  collaterally  attacked,  as  it  had  been  chartered  by  the 
implied  consent  of  the  State.4 

§  83.  Right  of  State  to  attack  Corporate  Existence  in  Direct 
Proceedings.  —  This  section  has  reference  only  to  actions  brought 
by  the  State  for  the  purpose  of  testing  the  legality  of  corporate 
existence  where  it  is  alleged  that  there  has  been  a  failure  on  the 
part  of  the  incorporators  to  perform  all  the  conditions  prescribed 
by  statute  as  a  precedent  to  corporate  existence.  The  action  here 
referred  to  is  that  of  quo  warranto,  which,  even  in  the  absence  of 
statutory  provision,  may  be  maintained  at  common  law  in  behalf 
of  the  State  against  incorporators  who  assume  to  exercise  corpo- 

i  Lehman  v.  Warner,  61  Ala.  455.  3  People  v.  LaEue,  67  Cal.  526  ;  8  Pac. 

2  Snider's  Sons'  Co.  v.  Troy,  91  Ala.  84. 
•224 ;  8  So.  658 ;    Tar  River  Nav.  Co.  v.  4  Richards  v.  Bank,  75  Minn.  196 ;  77 

INeal,  5  Hawks  (N.  C),  520.  N.  W.  822. 

90 


CHAP.  II.]  PROCURING   THE    CHARTER.  §  83 

rate  powers  without  being  legally  incorporated,  for  the  purpose  of 
ousting  them  from  the  exercise  of  such  powers.1 

In  all  such  proceedings  as  against  the  State  not  merely  a  de 
facto  corporate  existence  must  be  shown,  but  a  de  jure  existence 
as  well.  The  general  prevailing  view  at  the  present  time  seems 
to  be  that,  as  against  the  State  in  such  proceedings,  it  is  necessary 
to  show  a  specific  statute  authorizing  the  creation  of  corporations 
of  the  character  of  the  one  against  which  the  quo  warranto  pro- 
ceedings are  brought,  and  also  substantial  compliance  in  the 
preliminary  organization  of  the  corporation  with  all  conditions 
precedent  prescribed  by  statute.2 

In  quo  ivarranto  proceedings  the  burden  of  proof  is  upon  the 
corporation  to  show  that  it  has  been  legally  incorporated.3  In 
the  proceedings  of  the  character  referred  to  it  has  been  well  said 
that  "  public  policy  demands  that  the  power  to  oust  de  facto  cor- 
porations from  the  exercise  of  corporate  powers  because  of  failure 
to  comply  substantially  with  conditions  precedent  be  sparingly 
exercised."  * 

Were  the  rule  otherwise,  disastrous  consequences  would  follow 
in  the  commercial  world,  and  in  all  such  cases  the  courts  should 
take  extraordinary  care  to  see  that  the  rights  of  third  parties  are 
fully  protected.  In  proceedings  brought  by  the  State,  the  most 
important  matter  to  be  looked  at  is  whether  there  has  been  a 
failure  on  the  part  of  the  incorporators  to  comply  with  the  pro- 
visions of  the  statute,  which  are  merely  directory  as  opposed  to 
those  that  are  mandatory.  A  "  directory  "  provision  is  one  which 
the  legislature  did  not  intend  as  essential  to  corporate  existence, 
and  the  failure  to  comply  with  which  is  a  mere  irregularity  and  is 
not  fatal  to  corporate  existence.  A.  "mandatory"  provision,  on 
the  other  hand,  is  one  which  must  be  substantially  complied  with 
in  order  to  create  a  corporation  de  jure.5  Whether  the  particular 
provision  of  the  statute  is  directory  or  mandatory  is  to  be  deter- 
mined by  "the  intention  and  true  meaning  of  the  legislature 
deduced  from  the  act  and  sometimes  aided  by  other  acts  in  pari 

1  Greene   v.    People,  150    111.  513  ;  37  8  People  v.  Lowden  (Cal.),  8  Pac.  66. 
N.  E.  842.                                                                  4  Duggan  v.  Company,  11  Colo.  113; 

2  State  v.  Webb,  97  Ala.  Ill  ;  12  So.     17  Pac.  105. 

377;  People   v.   Self  ridge,    52   Cal.   331;  6  Newcomb   v.    Reed,   12   Allen,  362; 

State  v.  Critchett,  37  Minn.  13  ;  32  N.  W.  B.  W.  S.  Co.  v.  Inhabitants  of  Braintree, 

787;  Holman   v.    State,   105  Ind.   569;  5  140  Maes.  482 ;  16  N.  E.  420. 
N.  E.  702. 

91 


§  84    INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS.     [PART  I. 

materia  and  extraneous  circumstances." 1  Even  as  against  the 
State  it  is  only  necessary  that  a  mandatory  provision  shall  be 
substantially  complied  with.2 

§  84.  "When  does  Corporate  Existence  commence  ?  —  Where  the 
statute  provides,  as  it  does  in  some  of  the  Commonwealths,  that 
the  articles  of  incorporation  shall  be  filed  with  State  officials  or 
in  some  local  county  office  or  both,  the  general  rule  is  that  the 
corporate  existence  dates  from  the  time  of  filing  of  the  articles 
with  such  officials  and  not  from  the  time  it  begins  to  do  business.3 
The  foregoing  seems  to  be  the  rule  in  force  in  the  majority  of 
States.  Some  of  the  States,  however,  provide  by  statute  as 
to  when  corporate  existence  shall  commence,  as,  for  example, 
Alabama,  California,  Colorado,  Connecticut,  Delaware,  Idaho, 
Iowa,  Kansas,  Kentucky,  Maine,  Massachusetts,  Michigan,  Mis- 
sissippi, Missouri,  Montana,  Nebraska,  Nevada,  New  Hampshire, 
New  Jersey,  New  York,  North  Dakota,  Ohio,  Pennsylvania,  Rhode 
Island,  South  Carolina,  South  Dakota,  Tennessee,  Texas,  Utah, 
Virginia,  Washington,  West  Virginia,  Wisconsin,  and  Wyoming.4 
In  a  number  of  the  States  corporate  existence  depends  not  merely 
upon  filing  articles  with  the  Secretary  of  State,  but  also  upon  filing 
the  same  in  the  local  recording  office  of  the  county  where  the 
principal  place  of  business  of  the  corporation  is  to  be  located, 
as,  for  example,  in  Arizona,  California,  Colorado,  Delaware, 
Idaho,  Maryland,  Montana,  New  Jersey,  Utah,  and  Wisconsin. 
In  some  few  of  the  States  the  statute  by  reason  of  its  peculiar 
provision  seems  to  contemplate  the  corporate  existence  shall  com- 
mence before  the  filing  of  articles  of  incorporation  with  any 
official,  either  State  or  county  ;  this  for  the  reason  that  the 
certificate  required  to  be  filed  with  such  officials  must  be  signed 
by  corporate  officers.  States  to  which  reference  is  here  made  are 
Arkansas,  Illinois,  Indian  Territory,  Maine,  Massachusetts,  Michi- 
gan, and  Missouri. 

i  Cross  v.  Company,  17  111.  54;  Eak-  3  Hanna  v.  Company,  23  O.  St.  622; 

right  v.  Company,  13  Ind.  404;  Newcomb  G.  M.  &  S.  Co.  v.  Richards,  95  Mo.  106;  8 

v.  Reed,  12  Allen,  362.  S.  W.  246  ;  Humphreys  v.  Mooney,  5  Colo. 

2  People  v.  Company,  97  Cal.  276  ;  32  293  ;  V.  C.  Railway  Co.  v.  Clayes,  21  Vt. 

Pac.  236  ;  State  v.  White,  13  Mo.  Appeals  30  ;  Borough  of  Braddock  v.  Company,  189 

139;  People  v.  Cheeseman,  7  Colo.  376;  Pa.  379;  42   Atl.    15;  Badger  Paper  Co. 

3  Pac.  716:  Newcomb  v.  Reed,  12  Allen,  v.  Rose,  95  Wis.  45;  70  N.  W.  302;  Hunt 

362;  Eakright  v.  Company,  14  Ind.  404;  v.  Company.  11  Kan.  412. 
Walworth  v.  Bracket,  19  Mass.  98  ;  B.  W.  4  See  Part  II.,  Synopsis-Digest  of  the 

S.  Co.  v.   Inhabitants   of   Braintree,  146  Corporation  Laws  of  the  several  State* 

Mass.  482  ;  16  N.  E.  420.  and  Territories. 
92 


CHAP.  II.]  PROCURING   THE    CHARTER.  §  84 

There  seems  to  exist  in  some  jurisdictions  the  theory  that  in 
the  matter  of  determining  when  the  corporate  existence  com- 
mences reference  must  be  had,  first,  to  the  primary  franchise  of 
beino-  a  corporation  vesting  in  the  incorporators  and  next  to  the 
secondary  franchise  to  do  certain  specific  acts  which  vests  in  the 
corporation.1  Again,  in  some  States,  while  filing  articles  of  incor- 
poration constitutes  a  condition  precedent  to  the  creation  of  cor- 
porate existence,  it  is  also  a  condition  precedent  to  the  right  of 
doing  business.2 

Ordinarily  corporate  existence  does  not  commence  until  all  con- 
ditions precedent  are  performed.3  There  is  a  very  obvious  distinc- 
tion between  such  acts  as  are  declared  to  be  necessary  steps  in  the 
process  of  incorporation  and  such  as  are  required  of  the  individ- 
uals seeking  to  become  incorporated,  but  which  are  not  made 
prerequisites  to  the  assumption  of  corporate  powers.  With  respect 
to  the  former  any  material  omission  will  be  fatal  to  its  existence 
as  a  corporation  de  jure,  as  against  the  State.  In  respect  to  the 
latter,  failure  to  comply  therewith  is  not  ordinarily  accompanied 
by  forfeiture  of  its  charter  powers,  but  rather  goes  to  the  question 
of  the  personal  liability  of  the  individuals  who  attempt  to  do 
business  as  a  corporation  without  having  complied  with  all  the 
conditions  subsequent.4 

Corporate  existence  in  this  immediate  connection  ordinarily 
means  full  authority  to  transact  business  as  such  in  contradis- 
tinction to  the  qualified  existence  of  such  corporations  which  dates 
from  the  time  of  filing  the  articles  of  association  with  the  Secre- 
tary of  State.5  So  too,  in  those  States  where  organization  precedes 
the  filing  of  a  certificate  of  incorporation,  it  has  been  held  that  a 
corporation  has  a  qualified  existence  from  the  date  of  the  incor- 
porators' first  meeting.6 

In  Illinois  corporate  existence  does  not  commence  until  the 
reception  of  a  license  from  the  Secretary  of  State  to  take  stock 

1  State  v.  Water  Co.,  61  Kan.  547;  60  Pa.  St.  379;  42  Atl.  15;  Badger  Paper 
Pac.  337_  Co.  v.  Rose,  95  Wis.  145  ;   70  N.  W.  802. 

2  Gade  v.  Company,  165  111.  367;  46  4  Herrod  v.  Hamer,  32  Wis.  162;  E. 
N.  E.  286;  Martin  v.  Deetz,  102  Cal.  55  ;  G.  L.  Co.  v.  Green,  46  N.  .1.  Eq.  118;  18 
36Pac.  368;  In  re,  8.  M.  Co.,  37  Minn.  91;  Atl.  844;  M.  H.  M.  Co.  v.  Woodbury,  14 
33  N.  W.  219  ;  Johns  v.  People,  25  Mich.  Cal.  424. 

499;  G.  M.  &  S.  Co.  v.  Richards,  95  Mo.         "'  Hurt  v.  Salisbury,  55  Mo.  310. 

106;  8  S.  W.  246.  6  S.  G.  &  P.  Co.  v.  Scholfield,  70Conn. 

;  Afferton    v.  Company,  67   End.  334;    500;  40  Atl.  182. 
Borough  of  Braddock  v.  Company,  189 

93 


§  84   INCORPORATION  AND    ORGANIZATION   OF   CORPORATIONS.     [PART  I. 

subscriptions.1  It  would  of  course  follow,  from  the  necessities  of 
the  case,  that  before  a  corporation  can  contract  as  such,  it  must 
have  a  full  and  complete  organization.2  While  ordinarily  such 
organization  is  not  necessary  to  the  commencement  of  corporate 
existence,  it  is  sometimes  made  so  by  statute.3 

1  Stowe  v.  Flagg  et  al.,  72  111.  397  ;  Cur-  O.  St.  328 ;  U.  R.  Co.  v.  ITolden,  63  N.  C. 
ran  v.  Bradner,  27  111.  Ap.  582.  410;  Teitig  v.  Boesman,   12  Mont.  404; 

2  Gent  v.  Company,  107  111.  652.  31  Pac.  371. 

3  A.  &  N.  T.  Ry.   Co.  v.  Smith,    15 


94 


CHAP.  III.]  ORGANIZATION   AFTER   INCORPORATION.  §  85 


CHAPTER   III. 

ORGANIZATION  OF  CORPORATIONS  AFTER  INCORPORATION. 

§  85.  The  Incorporators'  Organization  Meeting.  —  That  a  cor- 
poration shall  have  a  full  and  complete  organization  and  existence 
as  an  entity  before  it  can  enter  into  any  kind  of  contract  or 
transact  any  business,  would  seem  to  be  self-evident.  A  corpora- 
tion until  organization  has  no  franchises  or  faculties.  Its  exist- 
ence before  is  but  a  qualified  existence.  Its  powers  are  limited 
for  the  time  being  to  the  right  to  organize  itself  into  an  active 
corporate  organization,  and,  as  we  have  seen,  those  engaged  in 
bringing  it  into  being  have  no  power  to  bind  it  by  contract  unless 
so  authorized  by  the  charter.  Until  organization  as  authorized 
by  the  charter,  it  does  not  possess  the  right  to  exercise  its  cor- 
porate functions,  nor  has  it  a  valid  existence  for  all  purposes.1 

In  this  connection  it  was  observed  in  a  leading  case,  that  "  it  is 
often  stated  in  the  books  that  a  corporation  is  created  by  its 
charter.  This  is  not  precisely  correct.  The  charter  only  confers 
the  life  and  provides  the  instruments  by  which  it  may  become  an 
acting  entity.  Such  a  corporation  has  been  well  defined  to  be  an 
artificial  being,  existing  only  in  contemplation  of  law.  The 
instruments  provided  to  bring  the  artificial  being  into  active 
operation  are  the  persons  named  in  the  charter,  and  those  who 
by  virtue  of  its  provisions  may  become  associated  with  them. 
These  persons — the  incorporators — as  natural  persons  have  no 
such  power.  The  charter  confers  upon  them  a  new  faculty  for 
this  purpose,  a  faculty  which  they  can  have  only  by  virtue  of  the 
law  which  confers  it."2 

The  better,  if  not  the  prevailing,  rule  appears  to  be,  that  not  only 
are  the  incorporators  named  in  the  articles  of  incorporation 
entitled  to  participate  in  the  organization  meeting  thereof,  but  also 
all  subscribers  to  the  preliminary  stock  subscription  to  the  capital 
stock  of  the  proposed  corporation  may  do  so.'! 

1  Gent  v.  Company,  107  111.  652.  8  Baltimore  City  Pass.  Ry.  Co.  v.  Ham- 

2  Miller  v.  Ewer,  27  Me.  509.  bleton.  77  Md.  341  ;   Spear  v.  Crawford. 

95 


§  87    INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS.    [PART  I. 

§  86.  Organization  Meeting,  how  called.  —  The  more  recent 
incorporation  acts,  such  as  are  in  force  in  Connecticut,  Maine, 
Massachusetts,  New  Jersey,  North  Carolina,  and  West  Virginia, 
point  out  specifically  how  the  organization  meeting  of  a  corpora- 
tion is  to  be  called.  Where  no  such  statutes  exist  the  better  and 
safer  practice  is  for  all  the  incorporators,  as  well  as  the  subscribers 
to  the  preliminary  subscription  agreement  to  the  capital  stock  of 
the  proposed  corporation,  to  sign  a  waiver  and  agreement  fixing 
the  time  and  place  for  the  organization  meeting  of  the  corporation.1 

It  has  been  held  that  all  are  not  required  to  be  present,  at  the 
organization  meeting  who  sign  the  articles  of  incorporation  unless 
the  statute  requires  it.  A  majority,  it  is  said,  is  sufficient.2  The 
safer  practice,  however,  is  to  comply  with  the  rule  stated  above.3 

Virginia  is  one  of  the  few  States  possessing  a  statute  giving  the 
incorporators  the  right  to  assign  their  interests  as  such  in  a  pro- 
spective corporation.  Failure  to  call  a  meeting  as  provided  by 
statute  is  to  be  regarded  as  a  breach  of  a  condition  subsequent 
and  is  not  fatal  to  the  creation  of  a  valid  corporation.4 

§  87.  Organization  Meeting,  where  held.  —  It  was  laid  down  at 
an  early  date  by  the  Supreme  Court  of  Maine  in  Miller  v.  Ewer,5 
that  all  acts  and  proceedings  of  persons  pretending  to  act  in  the 
capacity  of  incorporators  when  assumed  without  the  bounds  of  the 
sovereignty  granting  the  charter  are  absolutely  void.  The  prin- 
ciple established  in  Miller  v.  Ewer  has  been  quite  generally 
adopted  in  other  parts  of  the  country.6 

The  reasoning  of  these  cases  is  to  the  following  effect:  the 
charter  bestows  upon  the  incorporators  certain  privileges  which 

14  Wend.  24 ;  Nickum  v.  Burkhardt,  30  5  27  Me.  509. 

Ore.  464 ;  47  Pac.  788  ;  Waukon,  etc.  Ry.  6  Freeman  v.  Company,  38  Me.  343  ; 
Co.  v.  Dwyer,  49  la.  121  ;  Instone  v.  Com-  Smith  v.  Company,  64  Md.  85;  20  Atl. 
pany,  2  Bibb.  (Ky.)  578;  Chester  Glass  1032;  Camp  v.  Byrne,  41  Mo.  525 ;  Hum- 
Co.  v.  Dewey,  16  Mass.  94;  Haskell  v.  phreys  v.  Mooney,  5  Col.  282;  Duke  v. 
Read  (Neb.),  93  N.  W.  997.  Taylor,  37  Fla.  64;  19  So.  172;  Miller 
i  B.  B.  R.  Co.  v.  Buck,  68  Me.  81.  v.  Parrish,  14  N.  J.  Eq.  380 ;  Ormsby  v. 

2  Packard  v.  Co.,  168  Mass.  92  ;  46  Company,  56  N.  Y.  623  ;  Mitchell  v.  Com- 
N.  E.  433.  pany,  40  N.  Y.  Sup.  Ct.  406  ;  F.  T.  L.  Co. 

3  See  Babbitt  v.  E.  J.  I.  Co.,  1  Stew.  v.  Laigle,  59  Texas,  339 ;  Hodgson  v. 
Dig.  208,  §  13,  not  otherwise  officially  re-  Company,  46  Minn.  454;  49  N.  W.  197; 
ported  (1876)  ;  Walworth  v.  Bracket,  98  Ohio,  etc.  Ry.  Co.  v.  McPherson,  35  Mo. 
Mass.  98.  13  ;  Arms  v.  Conant,  36  Vt.  744;  Galves- 

4  McClinch  v.  Sturges,  72  Me.  288;  ton,  etc.  Ry.  Co.  v.  Cowdrey,  1 1  Wall.  459 ; 
Braintree  Water  Supply  Co.  v.  Braintree,  Runyan  v.  Coster,  14  Peters,  122  ;  Augusta 
146  Mass.  482  ;  16  N.  E.  420;  In  re  Brit-  Bank  v.  Earle,  13  Peters,  519  ;  Wright  v. 
ish  Sugar  Refining  Co.,  3  Kay  &  J.  408 ;  Lee,  2  S.  D.  596 ;  57  N.  W.  706. 

Porter  v.  Robinson,  40  Hun  (N.  Y),  209. 

96 


CHAP.  III.]  ORGANIZATION    AFTER    INCORPORATION.  §  87 

thev  can  possess  only  by  virtue  of  the  law  which  confers  it ;  that 
law  is  inoperative  beyond  the  bounds  of  the  legislative  power  by 
which  it  was  enacted  ;  that,  as  the  foregoing  faculty  cannot  accom- 
pany the  incorporators  beyond  the  bounds  of  the  sovereignty  which 
creates  it,  they  cannot  possess  or  exercise  it  there,  and  can  have 
no  more  power  there  to  make  the  artificial  being  act  than  other 
persons  not  named  or  associated  as  incorporators.  Therefore  any 
attempt  to  exercise  such  a  faculty  there  is  merely  a  usurpation  of 
authority  by  persons  destitute  of  it  and  acting  without  any  legal 
capacity  to  act  in  that  manner.  If  the  foregoing  reasoning  be 
sound,  it  follows  that  all  fundamental  corporate  acts  and  pro- 
ceedings when  assumed  without  the  bounds  of  the  sovereignty 
granting  the  charter  are  absolutely  void.  The  principle  here 
stated  has  been  materially  qualified  in  a  large  number  of  jurisdic- 
tions by  an  extended  application  of  the  doctrine  of  estoppel.  As 
an  example  of  this,  attention  is  called  to  the  case  of  Handley  v. 
Stutz.1 

This  was  a  case  where  a  Kentucky  corporation  at  a  meeting  of 
the  stockholders  of  the  corporation,  held  outside  of  the  State,  in- 
creased the  capital  stock  of  the  company  from  one  hundred  twenty 
thousand  dollars  to  two  hundred  thousand  dollars.  It  was  con- 
tended that  this  increase  was  illegal,  for  the  reason  that  the  meet- 
ing of  the  stockholders  authorizing  it  was  held  outside  of  the 
State  of  Kentucky.  The  court,  in  its  opinion  upon  this  point, 
spoke  as  follows  : 

"Nor  were  the  proceedings  of  such  meeting  any  less  binding  upon 
those  participating  in  it  by  reason  of  the  fact  that  it  was  held  outside 
of  the  boundaries  of  the  State  under  the  laws  of  which  the  company 
was  incorporated.  By  act  of  the  Kentucky  Legislature,  it  is  pro- 
vided, that  all  elections  for  directors  and  other  officers  by  private 
corporations  shall  be  held  within  the  territorial  limits  of  the  State 
of  Kentucky,  and  that  any  such  election  held  outside  of  Kentucky 
shall  be  void.  Beyond  the  election  of  officers,  however,  there  is  no 
statutory  restriction  of  corporate  action  to  the  limits  of  the  State, 
and  in  the  absence  of  such  inhibition  the  proceedings  of  such  meet- 
ing would,  with  regard  to  directors'  meetings,  be  binding  upon  all 
those  participating  in  it,  as  well  as  upon  those  acting  upon  the  faith 
of  its  validity  or  receiving  the  stock  authorized  to  be  issued  at  said 
meeting.     It  is  true  that  there  are  cases  holding  that  stockholders' 

»  139  U.  S.  417;  11  S.  Ct.  530. 

7  97 


§  88    INCORPORATION   AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

meetings  cannot  be  legally  held  outside  of  the  home  State  of  the  cor- 
poration, but  the  question  has  generally  arisen  where  a  majority 
present  had  attempted  by  their  action  to  bind  a  dissenting  minority, 
or  had  taken  action  prejudicial  to  the  rights  of  third  persons.  In- 
deed, so  far  as  we  know,  the  authorities  are  uniform  to  the  effect 
that  the  action  taken  at  such  meeting  was  binding  upon  those  who 
participated  in  or  partook  of  the  benefits  of  them.  In  this  case  the 
meeting  was  attended  by  all  the  stockholders  but  two,  who  were 
present  by  proxy.  The  vote  increasing  the  stock  was  unanimous, 
and  it  does  not  lie  in  the  mouth  of  those  who  participated  in  this  act, 
or  received  the  stock  voted  at  this  meeting,  to  question  its  validity." 1 

Unquestionably  the  legislature  has  the  legal  right,  in  the  absence 
of  constitutional  provision,  to  provide  that  all  meetings  of  cor- 
porations, whether  organization  or  otherwise,  may  be  held  outside 

the  State.2 

8  88.  Steps  Necessary  to  complete  Organization.  —  The  princi- 
pal matters  which  demand  attention  at  the  organization  meeting 
of  a  corporation  may  be  enumerated  as  follows  :  (1)  the  adoption 
of  by-laws ;  (2)  election  of  directors  ;  (3)  providing  for  the  issue 
and  payment  of  the  capital  stock  of  the  corporation.  The  subject 
of  the  adoption  of  by-laws  and  the  payment  of  the  capital  stock  of 
the  corporation  will  be  left  for  subsequent  consideration. 

With  respect  to  the  matter  of  the  election  of  a  board  of  direc- 
tors the  following  may  be  said.  Many  of  the  incorporation  acts 
require  that  the  names  of  the  first  board  of  directors  shall  be  set 
forth  in  the  articles  of  incorporation,  and  this  ordinarily  obviates 
the  necessity  of  electing  a  new  board  at  the  organization  meeting 
of  the  corporation.3  Unless  the  statute  so  requires  it,  it  is  not 
necessary,  in  order  to  give  the  incorporators  the  right  to  partici- 
pate in  the  organization  meeting,  that  they  be  stockholders.4  But 
ordinarily  it  is  contemplated  by  the  incorporation  acts  that  the 
incorporators  shall  be  stockholders  or  subscribers  for  capital  stock. 

i  See  to  the  same  effect  Heath  v.  S.  L.  4  Hammond  v.  Straus,  53  Md.  1 ;  Per- 

Min.  Co.,  39  Wis.  146  ;  O.  &  M.  Ry.  Co.  v.  kins  v.  Berders,   56    Miss.   733  ;  Proprie- 

McPherson,  35  Mo.   13;  Ormsby  v.  Ver-  tors,  etc.  v.  Dickinson,  6  Gray  (Mass.),  586; 

mont  Min.  Co.,  56  N.  Y.  632  ;  Humphrey  Coyote   v.  Ruble,    8  Oregon,  284 ;  Dens- 

v.  Mooney,  5  Col.  282  ;  Wright  v.  Lee,  2  more  Oil  Co.  v.  Densmore,  64  Pa.  St.  43 ; 

S.  D.  596 ;  57  N.  W.  706 ;  T.  M.  Co.  v.  Singer  Mfg.  Co.,  v.  Peck,  9  S.  D.  29 ;  67 

Goodhue,  18  N.  C.  981.  N.   W.  947  ;  Ramsey  v.  Tod,  95   Texas, 

2  Graham  r.  Co.,  118  U.  S.  161;  6  Sup.  614;  69  S.  W.  133;   Byrnes  v.  Beck,  10 

Ct.  1009.  Ga.  121  ;  B.  B.  &  T.  Co.  v.  J.  B.  T.  Co. 

s  Hamilton  Trust  Co.  v.  Clemens,  163  101  Tenn.  545;  48  S.  W.  228;  Wechsel- 

N.  Y.  423  ;  57  N.  E.  614.  berg  v.  Bank,  64  Fed.  90. 
98 


CHAP.  III.]  ORGANIZATION    AFTER   INCORPORATION.  §  89 

The  right  to  vote  stock  is  an  incident  to  stock  ownership,  and  was 
recognized  at  common  law  as  a  property  right.1 

In  some  few  of  the  States,  statutes  exist  limiting  the  right  of 
stockholders  to  own  more  than  a  certain  percentage  of  the  total 
stock  of  the  corporation.2 

Sometimes  the  incorporators  are  appointed  commissioners  to 
take  stock  subscriptions.  It  has  been  held  that  the  failure  of 
such  commissioners  to  take  the  oath  of  office  as  required  by 
statute,  will  not  render  the  subscriptions  void.3  Where  authority 
to  open  books  of  subscription  is  given  by  statute  to  the  incorpora- 
tors, this  authority  may  be  exclusive,  so  that  subscriptions  cannot 
lawfully  be  received  by  others.  Such  subscriptions,  however,  may 
of  course  be  ratified  by  proper  parties.4 

Ordinarily  the  election  of  officers  is  by  statute  devolved  upon 
the  board  of  directors.  However,  in  some  few  of  the  State*  cer- 
tain officers  are  required  to  be  elected  by  the  stockholders. 

§  89.  Adoption  of  By-Laws.  —  A  by-law  is  in  effect  a  contin- 
uing rule  of  action  for  the  government  of  the  corporation,  its  mem- 
bers and  officers.5  The  purpose  of  a  by-law  is  to  regulate  and 
define  the  duties  of  the  stockholders  between  themselves  and  the 
conduct  of  the  officers  and  the  management  of  the  corporate 
affairs.6 

All  corporations  have  the  implied  power  to  make  by-laws  for 
the  government  of  the  corporation  and  the  management  of  its 
affairs.7  Unless  otherwise  provided  by  statute,  the  by-laws  must  be 
adopted  by  the  incorporators  at  their  organization  meeting  or  else 
by  the  stockholders  at  a  meeting  duly  called  for  that  purpose.8 

Some  few  of  the  States,  among  them  being  South  Dakota,  North 
Dakota,  and  Oklahoma,  permit  incorporators  to  adopt  by-laws, 
whether  they  are  subscribers  for  the  capital  stock  of  the  proposed 
corporation  or  not.     Statutory  provisions  exist  in  several  of  the 

1  Commonwealth  v.  Dalzell,  152  Pa.  3  Hollman  v.  Company,  9  Gill  &  J. 
St.  217  ;  25  Atl.  535.  (Md.)  462. 

2  Mack  v.  Company,  90  Ala.  396;  8  *  N.  C.  M.  Ry.  Co.  v.  Eslow,  40  Mich. 
So.    150;    Commonwealth    v.    Detwiller,  222. 

131   Pa.  St.  614;  18  Atl.  990.     On  right  5  N.  M.  T.  S.  Co.  v.  Bishop,  103  Wis. 

of  corporation  to  vote   its  own  shares  see  492  ;  79  N.  W.  785. 

McNeely  v.  Woodruff,   13  N.  J.  L.  352;  c  Flint  v.  Pierce,  99  Mass.  70. 

Ex  jmrte  Holmes,  5  Cowen  (N.  Y.),  426;  7  Engelhardt  v.  Association,  148  N.  Y. 

on  right  of  corporations  to  vote  shares  in  281  ;  42  N.  E.  710. 

another   corporation    see   Davis   v.  Com-  8  M.  G.  Ii.  Co.  v.  Wysong,  51  Ind.  12. 

punv,  77  Md.  35  ;  25  Atl.  982. 

99 


§  90   INCORPORATION   AND    ORGANIZATION   OP   CORPORATIONS.    [PART  I. 

states,  expressly  permitting  provision  to  be  made,  if  desired,  for 
the  adoption  of  by-laws  by  the  directors.  In  the  absence  of  any 
such  statutory  authority,  by-laws  adopted  by  the  directors  are  not 
binding  unless  subsequently  ratified  by  the  stockholders.1  On  the 
other  hand,  if  the  directors  are  vested  by  statute  with  exclusive 
power  to  pass  by-laws,  those  passed  by  the  stockholders  are  not 
valid.2 

The  adoption  of  by-laws  is  a  constituent  act,  and  for  this  reason 
they  must  be  adopted  within  the  State  by  whose  laws  the  corpora- 
tion was  created,  if  action  of  stockholders  is  necessary  to  their 
adoption.3  In  the  absence  of  statutory  power  or  charter  provision, 
by-laws  can  be  altered  or  repealed  by  the  stockholders  alone.4 

In  the  absence  of  statutory  prohibition,  the  power  to  amend  or 
alter  by-laws  may  be  delegated  by  the  stockholders  to  the  direc- 
tors. In  general  by-laws  must  be  adopted  in  conformity  to  the 
charter  and  be  reasonable  and  proper.5 

The  by-laws  of  a  private  corporation  will  be  interpreted  by  the 
courts  as  interpreted  by  the  corporation.6 

The  reasonableness  of  a  by-law  is  a  question  of  law  and  not  of 
fact.7 

In  drawing  by-laws  the  following  rules  should  govern :  they 
should  be  made  certain ; 8  they  must  be  directed  to  all  within  the 
sphere  of  their  operation ; 9  they  must  operate  equally  upon  all  to 
whom  applied  ; 10  they  must  be  lawful  as  against  members  pos- 
sessing rights,  and  must  be  reasonable.11 

Sometimes  the  statute  requires  by-laws  to  be  adopted  within 
thirty  days  after  incorporation  and  copied  into  a  book  of  by-laws.12 
Such  statutes  are  clearly  directory  and  not  mandatory. 

§  90.   Election  of  Directors.  —  The  power  to  choose  a  board  of 

1  Carroll  v.  Bank,  8  Mo.  Ap.  253.  6  State  ex  rel.  Attorney-General  v.  Conk- 

2  In  re  Klaus,  67  Wis.  40;  29  N.  W.     lin,  33  Wis.  21. 

582  ;  People  v.  Company,  82  111.  457 ;  S.  S.  7  State  v.  Overton,  4  Zabriskie  (N.  J.), 

Ass'n  v.  Company,  25  Mo.  Ap.  642.  435. 

3  In  re  Klaus,  67  Wis.  40 ;  29  N.  W.  8  Goddard  v.  Merchants'  Exchange,  9 
582 ;  Mitchell  v.  Company,  40  N.  Y.  Sup.  Mo.  Ap.  290. 

Court,  413.  9  Ex  parte  Frank,  52  Cal.  606. 

4  M.  G.  R.  Company  v.  Wysong,  51  10  People  v.  Society,  25  Barb.  (N.  Y.)  7. 
Ind.  12.  n  Com.  v.  Worcester,  3  Pick.  461 ;  King 

5  See  Kent  v.  Company,  78  N.  Y.  182  ;  v.  Union,  170  111.  135  ;  48  N.  E.  677.  On 
Bergman  v.  Association,  29  Minn.  275  ;  failure  to  post  by-laws,  see  Langon  v. 
13  N.  W.  120;  Commons  v.  Company,  12  Company,  49  la.  317. 

Pa.  St.  318;  People  v.  Chicago  Board  of        n  See  Hall    v.   Crandall,  29  Cal.  567; 
Trade,  45  111.  118.  Clapman  v.  Doray,  89  Cal.  52 ;  26  Pac.  605. 

100 


CHAP.  III.]  ORGANIZATION    AFTER    INCORPORATION.  §   90 

directors  is  inherent  in  all  private  corporations  irrespective  of 
statute.1 

The  election  of  directors  in  connection  with  the  organization  of 
a  corporation  ordinarily  follows  the  adoption  of  by-laws.  After 
the  organization  the  election  of  directors  is  usually  had  at  the 
annual  meeting  of  the  corporation.  In  giving  the  notice  of  such 
annual  meeting  it  is  customary  to  specify  in  the  notice  that  a 
board  of  directors  is  to  be  chosen.2 

In  choosing  the  directors  it  is  incumbent  upon  the  incorpora- 
tors or  stockholders,  as  the  case  may  be,  to  observe  the  pro- 
visions of  the  statutes  relative  to  the  number  of  directors  to  be 
chosen  and  their  qualifications  as  to  stock-holdings,  residence,  and 
citizenship  if  any  such  are  prescribed  by  statute.  In  the  absence 
of  such  statutes  as  exist  in  many  of  the  States  authorizing  the 
dividing  of  directors  into  classes,  so  that  only  a  certain  portion  of 
the  board  are  elected  annually,  the  full  board  must  be  elected  each 
year.  In  the  absence  of  statute  making  the  ownership  of  stock  a 
qualification  for  holding  the  office  of  director  such  ownership  is 
not  necessary.3  Even  where  the  statute  requires  that  directors 
shall  be  stockholders,  it  is  not  necessary  that  they  shall  become 
such  before  their  election  if  they  become  stockholders  before  enter- 
ing upon  the  duties  of  their  office.4  In  the  election  of  directors 
by  the  incorporators  it  is  sufficient  in  order  to  qualify  him  that 
a  director  be  a  subscriber  for  stock,  though  no  certificate  has  in 
fact  been  issued.5  Where  ownership  of  stock  is  necessary  to 
qualify  one  as  a  director,  the  prevailing  rule  seems  to  be  that 
the  moment  a  director  ceases  to  be  a  stockholder,  he  ceases  to  be  a 
director  dejure  (but  not  de  facto)  without  proceedings  having  first 
been  taken  to  remove  him.6 

Where  a  director  is  required  to  take  an  oath  of  office  before 
entering  upon  the  discharge  of  his  duties,  his  failure  to  take  such  an 
oath  will  not  prevent  him  from  becoming  a  director  de  facto.7 
Any  person  who  can  be  a  business  agent  for  another  can,  if  pos- 
sessed of  statutory  qualifications,  become  a  director.8     OrdinariU 

1  Ilurlbut  v.  Marshall,  62  Wis.  590;  6  Dispatch  Light  Packet  v.  Company. 
22  X.  W.  852.                                                    12  N.   II.  205;   Wright  v.   Company,   52 

2  Merritt  v.  Ferris,  22  111.  303.  N.  J.   Eq.    S52 ;    Iluwe    v.   Scarborough 
'■'■   Wright  v.  Company,  117  Mass.  226.        (Ala.),  35  So.  113. 

4  Greenoagh  v.  Company,  64  Fed.  22.  "  Simpson  i»,  Garland,  76  Me,  203. 

5  McComb  v.  Association,  l<)  N.  V.  Sup.  8  People  v.  Webster,  10  Wend.  (N.  Y.) 
552;  Beckett  v.  Houston,  32  Ind.  393.             554. 

101 


§  90    INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS.    [PART  I. 

it  is  not  necessary  that  resignations  of  directors  be  accepted  in 
order  to  become  effective.1 

Persons  owning  a  majority  of  stock  have  a  right  to  elect  direc- 
tors.2 It  is  a  fundamental  principle  in  corporation  law  that  a 
majority  of  stockholders  shall  control  the  policy  and  regulate  the 
business  affairs  of  the  corporation,  and  to  this  each  stockholder 
impliedly  agrees  when  he  acquires  stock  in  the  corporation.3 
However,  in  order  to  insure  minority  representation  on  the  board, 
cumulative  voting  for  directors  is  permitted  in  a  large  number  of  the 
States.  Where  such  right  to  cumulate  votes  is  mandatory  such 
right  cannot  be  taken  away  by  by-law.5 

The  fact  that  a  corporation  begins  business  with  an  insuffi- 
cient number  of  directors  does  not  invalidate  debts  contracted  by 
them,  nor  deprive  it  of  its  corporate  rights  and  privileges  unless 
some  action  is  taken  by  the  State  to  that  end.6  Failure  to  elect  a 
board  of  directors  annually  does  not  work  dissolution.  The  old 
board  will  hold  over  by  implication  of  law.7  This  is  a  rule  not 
only  established  by  statute  in  a  large  number  of  the  States,  but  is 
a  well  established  rule  of  corporation  law  in  the  absence  of  such 
statutes.8  In  the  election  of  directors  a  majority  vote  of  all  present 
is  sufficient,  provided  a  majority  of  the  stock  is  represented  at  the 
meeting.9  Vacancies  in  the  board  of  directors  cannot  be  filled 
by  the  remaining  directors,  but  must  be  filled  by  the  stockholders, 
unless  such  power  is  expressly  granted  by  statute.10  Even  where 
the  right  to  fill  vacancies  is  given  to  the  remaining  directors  it  is 
probably  true  that  there  must  be  present  at  the  meeting  a  majority 
of  the  whole  number  of  directors  prescribed  by  the  charter,  and 
that  such  vacancy  be  filled  by  a  majority  vote  thereof.11 

Unless  regulated  by  statute  or  by-laws,  the  board  of  directors 
may  fix  any  place  within  the  domiciliary  State  at  which  annual 

1  Pres.,  etc.  of  Manhattan  Co.  v.  Kal-  '  Hunter  v.  Company,  26  La.  Ann.  13. 
denberg,    165   N.    Y.    1  ;    58  N.  E.    790 ;  8  Chamberlain    v.    D.    S.    Works,    103 
Briggs  v.  Spaulding,  141  U.  S.  155.  Mich.  124  ;  61  N.  W.  532  ;  Moses  v.  Tomp- 

2  Faulds  v.  Yates,  57  111.  416.  kins,  84  Ala.  613 ;  4  So.  763. 

3  Wheeler  v.  Company,  143  111.  197;  9  Eggleston  v.  Doolittle,  33  Conn.  402. 
32  N.  E.  420.                                                             10  Moses  v.  Tompkins,  84  Ala.  613 ;  4 

5  Tomlin  v.  Bank,  52  Mo.  Ap.  430;  So.  763;  Kearney  v.  Andrews,  10  N.J. 
Wright  v.  Company,  67  Cal.  532 ;  8  Pac.     Eq.  70. 

70.  u  Moses  v.  Tompkins,  84  Ala.  613  ;  4 

6  Fargason  v.  Company,  78  Miss.  65  ;  So.  763  ;  Nathan  v.  Tompkins,  82  Ala. 
27  So.  877.  437  ;  2  So.  747. 

102 


CHAP.  III.]  ORGANIZATION    AFTER   INCORPORATION.  §  90 

meetings  for  the  election  of  directors  may  be  held.1  Where  there 
are  mandatory  provisions  in  the  charter,  statute,  or  by-laws  as  to 
place  of  holding  annual  meetings  these  must  be  followed.2  Where 
the  certificate  of  incorporation  is  required  to  fix  the  number  of 
directors,  such  number  cannot  be  changed  except  by  amendment 
thereof.3 

In  connection  with  the  general  subject  of  election  of  directors  the 
question  not  infrequently  arises  as  to  the  validity  of  the  so-called 
"  voting  trusts  "  now  becoming  so  common  in  this  country.  The 
prevailing  and  it  is  believed  the  true  rule  on  this  subject  is  set 
forth  in  Clowes  v.  Miller,4  where  it  was  held  that  in  the  absence 
of  any  improper  motive  such  trusts  are  valid.5  It  is,  in  the  absence 
of  such  improper  motives,  merely  a  convenient  method  of  voting 
by  proxy. 

In  the  absence  of  statute,  charter  provision,  or  valid  by-law  to 
the  contrary,  holders  of  preferred  stock  have  the  same  rights  in  the 
election  of  directors  as  belong  to  the  holders  of  common  stock.6  It 
has  been  held  that  stockholders  may  in  voting  for  directors  change 
their  vote  while  the  election  is  in  progress.7  Mandamus  is  the 
proper  remedy  to  compel  canvassing  of  votes  at  election  of  direc- 
tors to  determine  whether  or  not  such  election  was  valid.8 

In  some  of  the  States  there  are  certain  statutory  officers  known 
as  "  Inspectors  of  Election,"  who  must  be  chosen  preliminary  to 
the  election  of  the  board  of  directors.  These  inspectors  should  be 
chosen  in  the  mode  provided  in  the  by-laws.9  Inspectors  have  no 
power,  express  or  implied,  to  pass  upon  the  eligibility  of  directors.10 
The  failure  to  have  the  inspectors  sworn  before  acting  as  such  will 
not  invalidate  an  election.11     In  the  absence  of  statutory  provision 

i  Corbett  v.  Woodward,  5  Saw.  403;  6  Mackintosh  v.  11.  II.  Co.,  32  Fed.  350; 

Commonwealth  v.  Smith,  45  Pa.  St.  59 ;  54  Fed.  582  ;  Lockhart  v.  Van  Alstyne, 

Pratt  v.   Company,  35  Conn. '365;  Duke  31    Mich.    76;    Miller   v.   Katterman,  47 

v.  Taylor,  37  Fla.  64  ;   19  Sou.  172  ;   Hilles  O.  St.  141  ;  24  N.  E.  496. 

v.  Parish,  14  N.  J.  Eq.  380 ;  Arms  v.  Co-  7  State  v.  McGaius,  64  Mo.  Ap.  225. 

nant.  30  Vt.  744 ;   Hodgson  v.  Company,  8  State  v.  McGaius,  64  Mo.  Ap.  225. 

46  Minn.  454  ;  49  N.  W.  197.  9  In  re  Excelsior  Fire  Ins.  Co.,  16  Abb. 

2  McDaniel  v.  Company,  22  Vt.  274.  Pr.  8  ;  People  v.  Company,  55  Barb.  344 ; 

3  See  Matter  of  Griffin  Iron  Co.,  63  In  re  LighthaH  Mfg.  Co.,  47  Hun,  258; 
N.  J.  L.  168;  41  Atl.  931.  State  v.  Merchant,  37  O.   St.  251  ;  Com 

*  60  N.J.  Eq.  179;  47  Atl.  345.  monwealth  v.  Woelper,  3  S.  &  R.  (Pa.)  29. 


5  See  also  Faulds  i\  Yates,  57  111.  416 
Moses  V.  Scott,   84   Ala.  608  ;  4  So.  742 
O.  &  M.  Ry.  Co.  v.  State,  49  O.  St.  668 
32   N.    E.   933 ;    Mobile,   etc.  Ry.  Co.   v.     (N.  Y.)  135 
Nicholas,  98  Ala.  92;  12  So.  723. 


In  re  St.  Lawrence  Steamboat  Co., 
44  N.  J.  L.  529. 

ii  In  re  M.  &  II.  By.  Co.,  19  Wend. 


103 


§  92   INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

or  regulation  by  by-laws  providing  otherwise,  the  power  to  appoint 
inspectors  of  election  lies  with  the  stockholders  alone.1 

S  91.  Power  to  hold  Meetings  for  the  Election  of  Directors  -with- 
out the  Domiciliary  state.  —  The  general  rule  unquestionably  is 
that  in  the  absence  of  statute  or  unanimous  consent  of  all  the 
stockholders  no  election  of  directors  by  the  stockholders  can  be 
legal,  so  as  to  make  them  directors  de  jure,  when  had  at  a  meeting 
called  without  the  limits  of  the  State  under  whose  laws  the  cor- 
poration is  created.2 

Twelve  of  the  Commonwealths  have  statutes  expressly  author- 
izing the  holding  of  stockholders'  meetings  without  the  domiciliary 
State.  In  any  event,  it  seems  to  be  now  well  settled  that  where 
all  the  stockholders  meet  without  the  State  and  transact  busi- 
ness thereat,  even  though  such  business  be  the  annual  election  of 
directors,  the  stockholders  present  at  such  meeting  are  estopped 
to  question  the  validity  of  the  proceedings  had  thereat.4  An  ex- 
cellent method  of  validating  any  action  taken  by  stockholders  at 
meetings  held  without  the  domiciliary  State  is  to  have  subsequent 
action  taken  by  the  stockholders  at  a  meeting  called  within  the 
State  ratifying  what  has  been  previously  done  by  them  without 
the  State.     This,  it  has  been  held,  cures  all  previous  defects.5 

§92.  Voting  by  Proxy. — At  common  law,  voting  of  stock- 
holders at  annual  meetings  or  special  meetings  was  required  to  be 
done  in  person.6  In  the  absence  of  statute,  charter  provision,  or 
valid  by-law  giving  stockholders  this  right,  the  same  rule  would 
apply  at  the  present  day.7 

i  State  v.  Merchant,  37  0.  St.  251.  11    Wall.  459;    20   Law   Ed.    199.      The 

2  Harding  v.   American   Glucose  Co.,  principle  of  estoppel  may  be  applied  here 

182  111.  551 ;  55  N.  E.  577.     See  Hodgson  Handley  v.  Stutz,  139  U.  S.  417;  11  Sup 

v.  Company,  46  Minn.  454  ;  49  N.  W.  197  ;  Ct.  530. 

Freeman  v.  Company,  38  Me.  343  ;  Smith  4  T.  M.  Co.  v.  Goodhue,  18  N.  Car.  981 

v.  Silver  Valley  Min.  Co.,  64  Md.  85 ;  20  Handley  v.  Stutz,  139  U.  S.  417  ;  11  Sup 

Atl.    1032;     Aspinwall  et   at.  v.    Ohio   &  Ct.  530. 

M.  R.  R.  Co.,  20  Ind.  492 ;  W.  H.  &  H.  5  G.  I.  &  E.  Co.  v.  Toler,  80  Md.  278 ; 

Mining  Co.  v.  King,  45  Ga.  34 ;  Hiles  v.  30  Atl.  657. 

Parrish,  24  N.  J.  Eq.  380 ;  Arms  v.  Con-  6  Perry   v.    Company,  93  Ala.  364 ;  9 

nant,   36  Vt.  750;  Bellows  v.   Todd,   39  So.  Rep.  217. 

Iowa,    209;    Franco-Texas   Land   Co.   v.  7  Phillips  v.  Wickham,  1  Paige  (N.  Y.), 

Laigle,  59  Tex.  339;  Mack  v.  De  Bardel-  590;  Taylor  v.  Griswold,  14  N.  J.  L.  222 ; 

ben,   etc.    Co.,  90   Ala.  396;  8  So.    150;  P.  H.  S.  Bank  v.  Superior  Court,  104  Cal. 

Duke  v.  Taylor,  37  Fla.  64  ;  19  So.  172;  649  ;  38  Pac.  452  ;  State  v.  Tudor,  5  Day, 

Camp  v.  Byrne,  41  Mo.  525;  Mitchell  v.  329;  People  v.  Crossley,  69  111.  195 ;  Perry 

Vt.  Copper  Min.  Co.,  40  N.  Y.   Sup.   Ct.  v.  Company,  93  Ala.  364;  9  So.  217. 

406 ;  Galveston,  etc.  Ry.  Co.  v.  Cowdrey, 
104 


CHAP.  III.]  ORGANIZATION    AFTER    INCORPORATION.  §  93 

Owing  to  the  unquestioned  right  of  a  corporation  to  adopt  a 
valid  by-law  permitting  voting  by  proxy,  even  in  the  absence  of 
a  statute  authorizing  it,  the  question  has  ceased  to  be  one  of  any 
great  practical  importance  in  the  country  to-day.  Besides  this, 
statutes  exist  in  all  of  the  States  and  Territories,  except  Ari- 
zona and  Georgia,  expressly  authorizing  the  voting  of  stock  by 
proxy.  It  should  be  observed,  however,  that  where  the  right  to 
vote  by  proxy  is  given  by  statute  without  restriction  it  cannot  be 
qualified  by  by-law.1 

Proxies  may  be  issued  in  blank  and  lawfully  filled  in  by  the 
holder.2  It  has  been  held  that  stockholders  cannot  give  an 
irrevocable  proxy  to  secure  the  payment  of  a  debt.3  It  is  against 
the  settled  rules  governing  the  control  of  corporations  that  an 
irrevocable  power  of  attorney  which  directs  the  vote  on  stock, 
should  be  vested  in  a  person  who  has  no  interest  in  the  stock  or 
is  not  a  representative  of  a  person  interested  therein.4 

The  foregoing  suggests  the  question  as  to  whether  or  not 
voting  trusts,  so  common  at  the  present  time,  are  valid.  A 
"  voting  trust "  may  be  defined  to  be  an  agreement  of  stock- 
holders to  give  any  designated  trustee  the  right  to  vote  at  his 
discretion  through  stockholders  for  a  given  period  of  time.  It 
may  be  said  that  such  voting  trust  is  valid  where  neither  the 
purposes  nor  the  means  used  contravene  any  constitutional  or 
statutory  provision  or  well-recognized  principles  of  public  policy, 
and  are  within  the  scope  of  the  powers  of  the  contracting 
parties.5 

§  93.  First  Directors'  Meeting.  —  The  principal  business  to  be 
transacted  at  the  first  meeting  of  the  board  of  directors  of  a  cor- 
poration is  (1)  the  election  of-  the  officers  provided  for  in  the 
by-laws;  (2)  the  carrying  into  effect  the  resolutions  passed  at 
the  organization  meeting  of  the  stockholders,  if  any,  looking  to 
the  payment  of  the  stock   in    property,  or,  in  lieu  thereof,  the 

1  Bankt-.  Superior  Court,  104  Cal.  649;  Kreisel  ''.  Distilling  Co.,  61  N.  J.  Eq.  5  ; 
38  Pac.  452.  47  Atl.  471  ;  Brightman  v.  Bates,  175  Mass. 

2  Matter  of  White,  45  Hun,  580;  105;  55  N.  E.  809;  Moses  v.  Scott,  84 
Matter  of  Townsend,  46  N.  Y.  St.  Rep.  Ala.  608  ;  4  So.  742  ;  (  Howes  v.  Miller,  60 
135.  N.  J.   Eq.  179;  47    Atl.  345;  Sullivan    v. 

3  Matter  of  Germicide  Co.,  65  Hun,  Parkes  (N.  Y.),  69  Ap  Div.  221  :  74  N.  Y. 
606;  20  N.  Y.  Sup.  195.  Sup.  786;  Freon  v.  Company,  42  0.  Si. 

4  Clowes  v.  Miller,  60  N.  J.  Eq.  179;  :!o.  See  however  Shepaug  Voting  Trust 
47  Atl.  345.  Case,  Co  Conn.  553;    24  Atl.  32:  Harvey 

■'  M.  &  O.  R.  v.  Nichols,  98  Ala.  92;  12  v.  Company,  118  N.  C.  693;  24  S.  E. 
So.  723  ;  Smith  v.  Company,  115  Cal.  584  ;     489. 

L05 


§  93    INCORPORATION    AND    ORGANIZATION   OP   CORPORATIONS.    [PART  I. 

passage  of  a  resolution  by  the  board  of  directors  ordering  an 
assessment,  either  in  whole  or  in  part,  upon  the  par  value  of  the 
capital  stock.  The  general  rule  appears  to  be  that  unless  the 
governing  statute  or  a  by-law  of  the  corporation  expressly  provides 
that  directors'  meetings  should  be  held  within  the  domiciliary 
State,  that  such  meetings  may  be  held  without  the  limits  of  such 
State  if  desired.1 

Some  courts,  however,  apparently  distinguish  in  this  regard 
between  meetings  of  the  board  of  directors  for  the  election  of 
officers  and  those  meetings  merely  called  for  the  transaction  of 
routine  business.  Such  courts  hold  that  meetings  of  the  first 
class  must  be  held  within  the  domiciliary  State,  while  the  others 
may  be  held  without  such  State  if  desired.2  In  nearly  half  of  the 
States  statutes  exist  authorizing  the  holding  of  directors'  meet- 
ings without  the  State.  It  is  unquestionably  true  that  where  in- 
corporators can  perform  constituent  acts  outside  of  the  domiciliary 
State  directors  can  elect  officers  in  like  manner.4 

When  calling  the  directors  together  for  their  first  meeting,  the 
mode  of  notice  provided  for  in  the  by-laws  must  be  given.  In 
the  absence  thereof  personal  notice  must  be  given,  or  a  waiver  of 
notice  must  be  had  from  each  of  the  directors.5  It  is  hardly 
necessary  to  state  in  this  connection  that  no  director  can  lawfully 
delegate  power  to  act  for  him  to  another  person.6 

At  common  law  a  majority  of  the  directors  present  and  voting 
at  a  meeting  was  necessary  to  constitute  a  quorum  of  the  full 
board.7  In  some  few  of  the  States,  notably  Oregon,  statutory 
provisions  exist  permitting  less  than  a  majority  of  the  board  of 
directors  to  constitute  a  quorum.  Provisions  in  statutes  and  by- 
laws requiring  the  election  of  directors  to  be  held  on  a  specified 
date  are  ordinarily  construed  to  be  merely  directory.8  The 
general  rule  is  that  a  majority  of  the  directors  constitute  a  quorum 

1  Thompson  v.  Company,  58  Miss.  423  ;  5  Bank  v.  McCarthy,  55  Ark.  473  ;  18 
Lead  Co.  v.  Reinhard,  114  Mo.  218;  21  S.  W.  759  ;  B.  B.  R.  Co.  v.  Buck,  68  Me. 
S.  W.  488;  Bassett  v.  Mining  Co.,  15  Nev.  81;  Library  v.  Association,  173  Pa.  St. 
293 ;  Parsons  v.  Lent,  34  N.  J.  Eq.  67 ;  30 ;  33  Atl.  744. 

Hanna  v.  Company,  23  O.  St.  622.  6  Perry  v.   Company,  93   Ala.  364 ;  9 

2  Smith  v.  Mining  Co.,  64  Md.  85  ;  20  So.  217  ;  Craig  Medicine  Co.  v.  Mer- 
Atl.  1032  ;  G.  I.  &  E.  Co.  v.  Toler,  80  Md.  chants'  Bank,  59  Hnn,  661  ;  14  N.  Y. 
278;  30  Atl.  651.  Sup.  16. 

4  Ohio,  etc.  R.  R.  Co.  v.  McPherson,  35  '  Blackwell  v.  State,  36  Ark.  178. 

Mo.  13.  8  Beardsley  v.  Johnson,  121  N.  Y.  224; 

24  N.  E.  380. 
106 


CHAP.  III.]  ORGANIZATION    AFTER    INCORPORATION.  §  95 

for  the  transaction  of  business,  and  a  majority  of  the  quorum  have 
power  to  bind  the  corporation  by  their  votes.1 

§  94.  Election  of  Corporate  Officers.  —  In  nearly  all  of  the  States 
statutes  exist  designating  certain  officers  that  business  corporations 
must  have,  and  providing  that  such  officers  shall  be  elected  by 
the  board  of  directors  duly  convened  for  that  purpose.  Where, 
however,  as  is  sometimes  the  case,  this  power  is  devolved  upon  the 
stockholders  by  statute,  then  directors  have  no  power  to  elect  such 
officers.2  In  the  absence  of  such  statutes  as  are  here  referred  to, 
giving  the  directors  power  to  elect  officers,  it  must  be  admitted 
that  the  current  of  authority  is  to  the  effect  that  the  power  then 
lies  in  the  stockholders  alone.3 

The  law  implies  that  directors  shall  hold  their  office  until  their 
successors  have  been  elected  and  qualified.4  Where  vacancies 
occur  in  the  board  of  directors  they  must  be  filled,  in  the  absence 
of  statute,  charter  provision,  or  by-law  giving  the  power  to  the 
directors,  by  the  stockholders  only,  and  even  where  the  power  to 
fill  vacancies  is  lawfully  bestowed  upon  the  remaining  directors, 
vacancies  can  then  be  filled  only  by  action  of  a  majority  of  the 
authorized  number  of  directors.5 

Questions  of  policy,  or  management,  or  expediency  of  contract  or 
action, or  consideration  of  gross  misappropriation  or  unlawful  appro- 
priation of  corporate  funds  to  the  detriment  of  corporate  interests, 
are  left  generally  to  the  decision  of  the  directors  if  their  powers 
are  without  limitation  and  free  from  restraint.  To  hold  otherwise 
would  be  to  substitute  the  judgment  and  discretion  of  others  in 
place  of  those  determined  on  by  the  scheme  of  incorporation.6 

§  95.  Appointment  of  Executive  Committee.  —  The  incorpora- 
tion acts  of  Connecticut,  Delaware,  Massachusetts,  Nevada,  New 
Jersey,  North  Carolina,  Virginia,  and  West  Virginia  all  authorize 
the  appointment  by  the  board  of  directors  from  their  own  number 
of  an  executive  committee  to  whom  may  be  entrusted  most  of  the 
ordinary  duties  that  devolve  upon  the  full  board  of  directors. 

i  Ten  F.vck  v.  Company, 74  Mich.  226;  4  People  v.  Rankle,  9  .Johnson  (N.  Y.), 

41  N   W  905;  Bee  also  Hoyt  v.  Thompson,  147;  Buguenot  Nat.  Bank  v.  Stadwell,  6 

19  N.  Y.  207.  Daly  (N.  Y.),  713. 

a  See  In  re  St..  Helen  Mill  Co.,  13  Saw.  6  Moses  v.  Tompkins,  84  Ala.  013;  4 

92;  Walsenberg   Water  Co.  v.  Moore,  5  Sou.  763. 

CoLApp.  144;  38  Pac.  60.  "  Ellerman  v.   Ry.  Co.,  49  N.  J.  Bq. 

a  Beardsleyi>.John8on,12lN.Y.224;24  217;  23  Atl.  287;  Ulmer  v.  Company,  98 

N.  E.  380  ;   In  re  A.  A.  G.  Iron  Co.,  63  N.  J.  Me.  579  ;  57  Atl.  1001. 


Law,  168,  357;  41  Atl.  931  ;  40  Atl.  H)'J7. 


107 


§  96   INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS.    [PART  H. 

It  was  at  one  time  held  that  the  performance  of  any  duties  by  the 
board  of  directors  involving  the  exercise  of  discretion  and  judg- 
ment could  not  be  so  delegated.1  The  modern  rule,  even  in  the 
absence  of  statute,  is  that  directors  have  the  power  to  delegate  to 
a  part  of  their  own  number  authority  to  perform  any  part  of  the 
ordinary  business  of  the  corporation,  even  though  it  involves  the 
exercise  of  the  broadest  judgment  and  discretion.2 

In  any  event,  whenever  a  question  is  raised  as  to  the  validity  of 
acts  done  by  an  executive  committee,  the  ratification  of  their  action 
by  the  full  board  will  undoubtedly  correct  all  defects  in  the  act 
complained  of  which  would  have  been  valid  in  the  first  instance  if 
performed  by  the  board  itself.3 

§  96.  Stock  Assessments.  —  Where  the  capital  stock  of  a  cor- 
poration is  not  all  issued  in  the  first  instance  in  exchange  for 
property,  it  is  customary  for  the  board  of  directors  to  pass  a  reso- 
lution at  their  first  meeting,  making  an  assessment  upon  the  stock 
of  stockholders  either  for  its  entire  par  value  or  some  fractional 
part  thereof.  Generally  speaking,  in  order  to  sustain  a  right  of 
action  on  stock  subscriptions,  it  is  necessary  to  show  that  a  valid 
call  or  assessment  has  been  made.4  An  assessment  is  a  rating 
or  fixing  of  the  proportion  by  the  board  of  directors  or  by  the 
stockholders,  which  every  subscriber  is  to  pay  of  his  subscrip- 
tion, of  which  notice  is  given,  which  notice  is  referred  to  as  a 
«  call."  5 

While  it  is  doubtless  true  that  a  "  call "  may  be  made  either  by 
the  directors  or  the  stockholders,  nevertheless  it  is  usually  made 
by  the  directors.  This  of  course  necessitates  the  organization  of 
the  corporation  as  a  preliminary  to  the  making  of  a  valid  assess- 
ment.6 The  purpose  of  the  "  call "  is  to  fix  the  time  for  pay- 
ment where  that  is  not  provided  for  either  by  statute,  charter 
provisions,  or  by-law.7      The  better  rule  seems  to  be  that  the 

1  Gillis  v.  Bailey,  21  N.  H.  149.  *  Chandler  v.  Siddle,  5  Fed.  Cases  No. 

2  Hoyt  v.  Thompson,  etc.,  19  N.  Y.  207 ;     2594  ;  3  Dillon,  477. 

Burden  v.  Burden,  159  N.  Y.  187;  54  5  Spangler  v.  Company,  21  111.  276. 
N.  E.  17;  Jones  v.  Williams,  139  Mo.  1  ;  6  Williams  v.  Taylor,  120  N.  Y.  244;. 
40  S.  W.  383;  Davis  v.  Company,  2  Utah,  24  N.  E.  288 ;  Williams  v.  Company,  153 
74 ;  Tempel  v.  Dodge,  89  Texas,  69  ;  32  Ind.  496 ;  55  N.  E.  425. 
S.  W.  514;  33  S.  W.  222;  Metropolitan  7  West  v.  Crawford,  80  Cal.  19;  21 
Telephone  Co.  v.  Company,  44  N.  J.  Eq.  Pac.  1123;  W.  S.  Bank  v.  Bank,  107  Mo. 
568;  14Atl.  907;  Sheridan  Electric  Light  133;  17  S.  W.  644  ;  Champion  Fire  Kin- 
Co.  v.  Bank,  127  N.  Y.  517  ;  28  N.  E.  467.  dler  Co.  v.  Rischert,  74  Mo.  Ap.  537. 

3  U.  P.  Ry.  Co.  v.  Company,  163  U.  S. 
564;  16  S.  Ct.  1173. 

108 


■CHAP.  III.]  ORGANIZATION   AFTER   INCORPORATION.  §  97 

directors  have  implied  power  by  virtue  of  their  office  to  make 
assessments.1 

In  any  event,  shareholders  may  delegate  such  power  to  the 
directors  when  the  same  is  given  to  them  by  statute  or  by-law.2 
It  is  questionable,  however,  whether  the  directors  have  power  in 
their  turn  to  delegate  the  power  of  making  assessments  to  some 
ministerial  officer.3  In  the  making  of  assessments  the  utmost  care 
should  be  observed  to  see  that  all  the  statutory  requirements  rela- 
tive to  the  same  are  complied  with. 

§  97.  Certificates  required  to  be  made  by  Officers  or  Directors 
after  Organization.  —  In  Maine,  Massachusetts,  Arkansas,  and 
Indiana  the  statutes  require  that  the  board  of  directors  together 
with  certain  of  the  corporate  officers  shall  file  a  certificate  of 
organization  with  certain  officers.  Ordinarily  the  failure  to  file 
such  certificate  would  not  affect  the  legal  character  of  the  cor- 
poration unless  there  was  a  statutory  provision  to  that  effect.4 
In  Illinois,  Missouri,  Tennessee,  and  Utah  a  certificate  of  due 
organization  is  issued  to  the  corporation  by  State  officials.5 

In  New  York,  New  Jersey,  District  of  Columbia,  Nevada, 
Indiana,  Massachusetts,  North  Carolina,  and  Colorado  the  law 
requires  that  after  the  payment,  either  in  whole  or  in  part,  of  the 
capital  stock  a  certificate  shall  be  made  and  filed  in  the  proper 
State  office  setting  forth  the  facts  relative  to  such  payment.6 
In  some  of  the  States,  notably  New  Jersey,  failure  to  file  such 
certificate  renders  the  officers  neglecting  or  refusing  to  make 
such  certificate  for  thirty  days  after  written  request  so  to  do, 
jointly  and  severally  liable  for  all  debts  contracted  before  the  filing 
of  such  certificate.7 

Unless  there  is  a  penalty  provided,  such  provisions  are  merely 
directory.8 

1  Budd  v.  Company,  15  Ore.  413;  15  6  Also  in  Delaware  upon  request  of  a 

Pac.    659 ;    Smith   r.    Company,    1    How.  creditor  or  stockholder. 
(Miss.)  479.  7  Nassau  Bank  v.  Brown,  30  N.  J.  Eq. 

a  Rives  v.  Company,  30  Ala.  92.  478;  Waters  v.  Quinby,  27  N.  J.  L.  296. 

8  Pike  v.  Company,  68  Me.  445  ;  S.  H.  See  S.  F.  N.  Bank  v.  Almy,  117  Mass.  476  ; 

Road  v.  Green,  12  11.  I.  164.  Chase's  Pat.  El.  Co.  v.  Company,  L52  Mass. 

4  In  re   Shakopee,   etc.  Co.,  37  Minn.  428;  28    N.    E.   300;  Chase  v.   Lord,  77 

91;  33  N.  W.  219;  Franklin   Bridge  Co.  N    V.   1  ;  Block  v.  Womer,  100  111.  328; 

v.  Wood,  14   Ga.  80;  In  re  Philadelphia  Hardman  v.  Sage,  124  N.  Y.  25;  26  N.  E. 

Artisans  Institute,  8  Pliila.  229  ;  A.  S.  A.  354;  Flash  v.  Conn,  16  Fla.  428  ;  Austin 

&  G.  Co.  v.  Whittier,  117  Mass.  451.  v.  Berlin,  13  Col.  200  ;  22  Pac.  433. 

6  See   Boston    Acid    Mfg.    Co.   v.   Mo-  8  Veeder  v.  Undgett,  95  N.  Y.  295 

ring,  15  Gray  (Mass.),  251. 

109 


§  99    INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS.   [PART  I. 
§  98.    Time   in  which  Corporation  must   organize    and    commence 

Business.  —  Over  half  of  the  States  have  provisions  upon  their 
statute  books  requiring  corporations  to  organize  and  commence 
business  within  from  one  to  five  years  after  the  issuance  of  their 
charter.1  Usually  the  penalty  for  failure  to  so  organize  and  com- 
mence business  is  the  right  given  to  the  State  to  bring  proceed- 
ings for  the  forfeiture  of  the  corporation's  charter  on  the  ground 
of  non-user  thereof  during  the  statutory  period.  It  is  undoubtedly 
true,  however,  that  as  against  all  but  the  State  failure  to  organize 
and  commence  business  within  the  time  limited  by  statute  will  not 
prevent  it  from  becoming  a  corporation  de  facto.2 

§  99.  Stock  Certificates.  —  Stock  certificates  are  the  muniments 
and  evidence  of  the  holder's  title  to  a  given  share  in  the  property 
and  franchises  of  the  corporation  in  which  he  is  a  member.3 
Subscribers  to  the  capital  stock  upon  complying  with  the  terms  of 
their  subscription  are  entitled  to  certificates  of  stock  showing  the 
number  of  shares  owned  by  them.  These  certificates  must  be 
signed  by  the  officers  designated  for  that  purpose  by  statute  or,  in 
the  absence  of  statutory  provision,  by  such  officers  as  are  desig- 
nated in  the  by-laws  for  that  purpose.4  A  seal  is  not  necessary 
to  the  validity  of  a  corporation  of  stock  in  a  corporation  (although 
it  is  customary  to  affix  one),  and  this,  too,  even  in  the  presence  of 
statutory  requirements.5  Neither  is  it  necessary  to  the  validity  of 
a  stock  certificate  that  it  should  be  issued  in  the  State  of  the  cor- 
poration's domicile.6  Generally  speaking,  however,  the  stock  cer- 
tificate book,  seal,  and  stock  transfer  books  must  be  kept  within 
the  State  unless  the  statute  provides  otherwise.7 

Statutory  provisions  exist  in  nearly  all  the  States  providing  the 
minimum  and  maximum  par  value  of  shares  of  capital  stock.8  In 
some  few  States  the  statute  expressly  provides  that  all  the  stock 
certificates  issued  by  a  corporation  shall  be  of  a  uniform  par  value. 
Even  in  the  absence  of  such  a  mandatory  provision,  it  is  at  least 

1  See  People  v.  Ry.  Co.,  45  Cal.  306 ;  *  N.  O.  &  T.  P.  Co.  v.  Bank  (Ohio),  24 
Commonwealth  v.  Water  Co.,  110  Pa.  St.  Wk.  Law  Bui.  198;  Titus  v.  G.  W.  T. 
391  ;  2  Atl.  63.  Road,  61  N.  Y.  237. 

2  Lehman  v.  "Warner,  61  Ala.  455;  S.  5  Fitzhugh  v. Bank,3  Monroe  (Ky.),  128  ; 
L.  A.  &  T.  H.  Ry.  Co.  v.  Company,  158  Halsted  v.  Dodge,  1  How.  Pr.  (N.  Y.)  170. 
111.  390;  41  N.  E.  916;  County  of  Macon  6  Courtright  v.  Deeds,  37  la.  503. 

v.  Shores,  97  TJ.  S.  272.  7  Perkins   v.  Lyons,    111    la.    192;   82 

3  Mechanics  Bank  v.  Company,  13  N.  Y.     n.  w.  486. 

599.  8  See  Part  III.  Table  6,  page  576. 

110 


CHAP.  IH.J  ORGANIZATION    AFTER    INCORPORATION.  §  99 

questionable  whether  the  courts  would  sustain  the  issuance  of 
stock  certificates  of  more  than  one  designated  par  value.1  In  the 
absence  of  statute  prohibiting  the  same,  corporations  ma)r  insert 
in  stock  certificates  such  stipulations  as  they  choose  relative  to  the 
rights  of  the  holders  of  such  certificates,  and  these  constitute 
valid  contracts  between  the  stockholders  and  the  corporation.2 

i  See  In  re  Cressona  Building  Ass'n,  1     pany,  129  (Pa.)  St.  405  ;  18  Atl.  414  ;  Dela- 
Legal  Register  (Pa.),  177.    As  to  meaning    field  v.  Illinois,  2  Hill  (N.  Y.),  172. 
of  par  value,  see  Commonwealth  v.  Com-         2  Pioneer  Co.  v.  Brockett,  58  111.  Ap.  204. 


Ill 


§100    INCORPORATION  AND    ORGANIZATION   OF   CORPORATIONS.  [PART  I. 


CHAPTER  IV. 
ISSUANCE   AND   PAYMENT   OF   CAPITAL   STOCK. 

§  100.  General  Remarks  as  to  the  Issuance  and  Payment  of  Cap- 
ital Stock  upon  the  Organization  of  a  Corporation.  —  In  connec- 
tion with  the  issuance  and  payment  of  capital  stock  following 
the  organization  of  a  corporation,  several  important  matters  should 
be  considered,  such,  for  example,  as  the  time  within  which  the  cap- 
ital must  be  paid  in ;  the  question  as  to  how  the  capital  must  be 
paid  in  with  reference  to  whether  in  cash,  in  property,  or  in  ser- 
vices ;  and,  finally,  consideration  of  the  safest  and  most  convenient 
method  to  be  adopted  by  the  corporation  so  that  it  can  sell  a  por- 
tion of  its  capital  stock  at  less  than  par,  if  necessary,  for  the 
procuring  of  working  capital  for  the  corporation ;  and  this,  too, 
without  subjecting  the  purchasers  of  such  stock  to  any  liability  to 
creditors  for  alleged  unpaid  stock  subscriptions  thereon. 

It  appears  that  in  certain  of  the  States,  notably  South  Dakota 
and  Tennessee,  it  is  not  necessary  that  any  of  the  capital  stock 
be  either  subscribed  or  paid  in,  in  order  that  the  corporation 
may  transact  business.1  In  the  several  States  provisions  of  the 
several  incorporation  acts  in  force  therein  differ  greatly  in  regard 
to  the  matter  of  the  time  within  which  capital  stock  must  be  paid 
in.  New  York  requires  that  half  of  the  authorized  capital  be 
paid  in  within  one  year ;  Missouri,  fifty  per  cent  thereof  immedi- 
ately ;  Maryland,  one-fourth  of  the  capital  must  be  paid  in  each 
year  ;  in  Indiana,  manufacturing  corporations  must  pay  in  all  their 
capital  within  eighteen  months.  Twenty  of  the  States  require  a 
certain  percentage  of  the  capital  to  be  paid  in,  in  order  to  com- 
mence business ;  while  in  twenty -five  a  certain  percentage  of  the 
authorized  capital  must  be  subscribed.  As  a  general  rule  the 
effect  of  the  provisions  of  law  here  referred  to  when  they  are  not 
'  complied  with  has  been  held  not  to  affect  the  existence  of  a  cor- 
poration as  a  corporation  de  jure,  but  merely  afford  ground  for  a 

1  See  ante,  §  2. 

112 


CHAP.  IV.]      ISSUANCE    AND   PAYMENT    OF    CAPITAL    STOCK.  §   101 

judgment  of  ouster  in  a  proper  action  brought  by  the  State  for 
that  purpose.1 

Sometimes  the  statutes  go  further  and  require  certificates  as  to 
the  payment  of  the  capital  stock  to  be  filed  in  designated  offices.2 

§  101.  Manner  of  Payment  of  Capital  Stock.  —  Probably  no  sub- 
ject of  corporation  law  is  more  involved  in  apparently  hopeless 
confusion  than  that  growing  out  of  the  question  of  the  payment  of 
capital  stock  of  corporations  where  the  rights  not  only  of  stock- 
holders, but  creditors  as  well,  are  involved.  Frequent  attempts 
have  been  made  from  time  to  time  by  both  State  legislatures  and 
the  courts  looking  to  the  enactment  or  declaration  of  rules  which 
will  remove  the  question  from  its  present  vague  and  unsatisfactory 
form  into  the  realm  of  certainty  and  security.  It  may  not  be 
without  its  practical  value  to  trace  here  the  sporadic  development 
of  the  various  doctrines  that  have  been  advanced  from  time  to 
time  relative  to  both  how  the  capital  stock  of  a  corporation  may 
be  paid  in,  and  when  so  paid  in  whether  the  valuation  placed  upon 
the  property  accepted  by  the  corporation  in  exchange  for  stock, 
shall  be  conclusive  alike  upon  stockholders  and  creditors.  The 
common  law  rule  with  reference  to  the  manner  of  payment  of  the 
capital  stock  of  a  corporation  appears  to  have  been  from  time  im- 
memorial that  it  must  have  been  paid  for  either  in  money  or 
money's  worth.3  In  this  country  such  a  rule  seems  to  have  ob- 
tained at  an  early  date.  Even  when  required,  by  constitutional 
provision  or  statute,  that  stock  should  be  paid  for  in  cash,  never- 
theless the  courts  early  adopted  the  view  that  the  same  might  be 
paid  for  in  money  or  money's  worth.  Otherwise  it  would  simply 
put  the  corporation  to  the  necessity  of  issuing  stock  in  the  first 
instance  for  money,  and  then  ordering  it  to  be  immediately  paid 
out  for  necessary  labor,  property,  or  services.4 

The  next  step  in  order  of  development  was  the  enactment  of 
either  constitutional  or  statutory  provisions  expressly  authorizing 

1  Baker   v.   Backus,   32   111    79  ;    Far-  2  See  Quinby  v.   Waters,  28  N.  J.  L. 

gason  v.  Company,   78  Miss.  65  ;  27   So.  533.     See  ante,  sec.  97. 
877  ;    Hammond    v.    Strauss,    53    Md.    1  ;  8  Drummond's    Case,    L.    R.  4    Chan. 

People  v.  Chambers,  42  Cal.  201  ;  People  Ap.  772. 

v.  Bank,  7  Col.  226;  3  Pac.  214;  Palmer  4  Liebo  v.  Knapp,  7'.)  Mo.  22  ;  Camden 

v.  Lawrence,  3  Sandf.  N.  Y.  161  ;  Lake  v.  Stuart,  144   U.  S.  104  ;   12  S.  Ct.  585; 

Ontario,  etc.    K.  Co.  v.  Mason,  16  N.  Y.  Kronert   v.   Johnston,    19   Wash.   96;   52 

451  ;    Spartenburg,  etc.   It.  Co.  v.   Ezell,  Pac.  605. 
14  S.    C.  281  ;  State  ex  rel.  v.  Webb,  97 
Ala.  Ill  ;   12  So.  377. 

a  113 


§  101    INCORPORATION  AND    ORGANIZATION  OF    CORPORATIONS.    [PART  I. 

the  payment  of  stock  of  corporations  in  money,  property,  or 
services.  Later  came  a  wave  of  constitutional  enactments  mainly 
confined  to  the  Western  States,  to  the  effect  "  that  no  corporation 
should  issue  stock  except  for  money,  labor  done,  or  property  act- 
ually received,  and  declaring  that  all  fictitious  increase  of  stock 
should  be  void."  In  early  times,  when  the  number  of  corporations 
formed  were  few  in  number,  and  their  charters  limited  to  a  few 
purposes,  the  courts  were  seldom  called  upon  to  determine  whether 
or  not  capital  stock  had  been  actually  paid  in  in  accordance  with 
law-5 —  this  for  the  reason  that  in  most  cases  the  mode  of  payment 
of  such  stock  had  been  in  cash.  However,  early  in  the  nineteenth 
century  the  question  became  a  vital  one  through  the  not  infrequent 
attempts  on  the  part  of  certain  corporations  to  pay  for  their  stock 
in  property  taken  at  a  valuation  which  in  the  opinion  of  many 
was  largely  fictitious  if  not  fraudulent.  When  such  corporations 
became  insolvent,  creditors,  and  sometimes  before  that  time  stock- 
holders, brought  the  question  in  its  practical  form  before  the 
courts  as  to  whether  such  valuation  were  binding  not  only  upon 
the  corporation,  but  upon  its  creditors  as  well.  It  was  such  a 
case  which  led  Justice  Joseph  Story  in  1824  to  give  utterance  to 
the  famous  "  trust  fund  doctrine  "  to  the  effect  that  the  capital 
stock  of  a  corporation  is  to  be  regarded  at  all  times  as  a  fund  held 
in  trust  by  the  corporation  for  the  benefit  of  its  creditors.1 

In  its  practical  application  the  trust  fund  doctrine  was  found  to 
be  an  instrument  of  injustice  rather  than  of  justice.  Besides  this 
it  had  never  received  the  sanction  of  the  common  law,  as  it  existed 
in  England  before  the  Revolution,  and  had  not  in  its  last  analysis 
any  right  to  demand  recognition  on  the  broad  basis  laid  down  for 
it  by  its  founder.  By  degrees  the  majority  of  the  courts  refused  to 
recognize  the  trust  fund  doctrine,  at  least  in  its  original  form,  and 
declared  upon  the  only  safe  ground,  which  was  that  stockholders 
should  only  be  held  liable  to  creditors  on  stock  issued  in  exchange 
for  property,  upon  the  ground  of  fraud.2  At  the  same  time  the 
courts  divided  upon  the  question  whether  in  the  appraisal  of 
property  taken  in  exchange  for  capital  stock  corporations  should 
be  required  to  appraise  such  property  at  its  true  value  without 
regard   to   the  intention  of  the  parties  upon  whom  the  duty  of 

1  See  Wood  v.  Dummer,  3  Mason,  308 ;  2  See  opinion  of  Justice  Wm.  Mitchell 
Fed.  Cases  No.  17944.  in    Hospes    v.   Company,  48   Minn.    174; 

50  N.  W.  1117. 

114 


CHAP.  IV.]       ISSUANCE   AND    PAYMENT   OF   CAPITAL   STOCK.  §  101 

making  such  appraisal  was  imposed,  or  whether  they  should  treat 
all  such  appraisals  as  conclusive  upon  both  the  corporation  and 
creditors  when  made  in  good  faith  and  where  no  actual  fraud 
appeared  in  the  transaction.  At  this  time,  too,  the  courts  almost 
universally  decided  to  distinguish  in  this  regard  between  the 
rights  of  the  corporation  and  its  stockholders  on  the  one  hand  and 
the  rights  of  creditors  on  the  other.  Such  a  distinction  as  is 
here  referred  to  was  evidenced  by  the  adoption  of  the  rule  now 
recognized  everywhere  that  a  valuation  placed  upon  stock  by  the 
corporation  may  be  valid  and  binding  upon  the  corporation  and  its 
stockholders  and  yet  not  conclusive  as  against  creditors.1 

The  doctrine  here  referred  to  is  well  stated  by  Judge  Showalter 
in  a  Federal  case  as  follows  :  3 

"Whatsoever  may  have  been  in  fact  the  value  of  the  property 
turned  over  to  the  company  for  its  stock,  the  latter  agreed  to  take  it 
for  the  stock.  The  persons  interested  were  the  stockholders,  and 
there  was  no  dissent  on  the  part  of  any  person  concerned  in  what  was 
thus  done.  Neither  any  person  thus  holding  stock  nor  any  person 
who  afterwards  became  a  stockholder  by  assignment  from  one  who 
then  held  stock  can  now  make  complaint  on  behalf  of  the  corporation 
against  the  lawfulness  of  that  transaction.  This  I  take  to  be  the 
settled  law  on  that  subject." 

The  next  evolutionary  step  is  to  be  found  in  the  recognition  by 
both  the  legislatures  and  courts  of  a  number  of  the  Commonwealths 
of  the  unsatisfactory  results  attending  the  application  of  not  only 
the  narrow  and  falsely  conceived  "  true  value  rule  "  above  referred 
to,  but  that  of  the  "  good  faith  rule  "  as  well.  It  was  clearly  seen 
that  something  further  was  needed  in  order  to  remove  the  subject 
for  all  time  from  its  situation  of  uncertainty  and  doubt.  Both  the 
legislatures  and  the  courts  of  these  Commonwealths  undertook  to 
remedy  the  matter,  with  what  success  it  will  hereafter  appear. 
Certain  of  the  States,  such  as  New  Jersey,  New  York,  Delaware, 
West  Virginia,  Connecticut,  and  others,  enacted  statutes  providing 
in  substance  that  in  those  cases  where  corporations  attempted  to 
issue  their  capital  stock  as  fully  paid  in  exchange  for  property, 

i  Handley  v.  Stutz,  139  U.  S.  417  ;  35     N.   Y.   2f>3  ;  26   N.    E.    145;  Parmalec   v. 
L.  E.  227  ;  Scovill  v.  Thayer,    105  I'.  S.     Price,  208  111.  544  ;  70  N.  E.  725. 
143;  26  L.  E.  968;  Barr  v.  Company,  125  2  Northern  Trust  Co.  v.   Company,  75 

Fed.  986. 

115 


§101    INCORPORATION  AND    ORGANIZATION  OP   CORPORATIONS.   [PART  I. 

the  valuations  placed  upon  such  property  by  the  board  of  direc- 
tors thereof  should,  in  the  absence  of  actual  fraud  or  gross  over- 
valuation, be  conclusive  in  the  premises.  Again,  other  States 
sought  to  remedy  the  evil  in  a  surer,  if  less  generally  satisfac- 
tory form.  Thus,  for  example,  Michigan,  Virginia,  Florida,  and 
other  States  have  acts  upon  their  statute  books  requiring  a  de- 
scription of  the  property  which  they  desire  to  accept  in  exchange 
for  their  capital  stock  to  be  submitted  to  State  officials  in  order 
that  the  valuation  placed  upon  such  property  by  the  corporation 
may  be  approved  by  such  State  officials  before  the  stock  can  be 
issued;  the  act  further  generally  providing  that  after  such 
appraisal  has  been  approved  by  the  State  officials,  it  should  be 
conclusive  in  the  premises. 

Turning  now  to  the  efforts  of  the  court  on  their  part  to  remedy 
the  evil  above  referred  to,  the  following  may  be  said.  Without  in 
terms  adopting  what  is  hereinafter  referred  to  as  the  "  speculative 
value  rule"  the  courts  in  recent  years  have  often  recognized,  in 
connection  with  attempts  on  the  part  of  corporations  to  issue  stock 
as  full  paid  in  exchange  for  property,  the  distinction  that  clearly 
obtains  between  property  which  has  either  a  well-known  or 
easily  ascertained  market  value  and  that  other  species  of  property 
of  the  character  commonly  known  as  "speculative,"  which  with- 
out any  present  large  intrinsic  value,  possesses  nevertheless  in 
almost  every  instance  a  large  value  for  future  speculative  pur- 
poses, not  determinable,  however,  by  the  ordinary  market  value 
standards.  Such  a  rule,  when  generally  recognized,  will  have  the 
effect  in  law  of  practically  dividing  corporations  into  two  great 
classes  with  respect  to  the  question  of  issuing  stock  thereof  in 
exchange  for  property,  to  wit,  non-speculative  and  speculative 
corporations. 

On  the  subject  now  before  us  certain  portions  of  the  able  report 
of  the  Massachusetts  legislative  committee  on  corporations  ren- 
dered in  1903,  is  so  peculiarly  instructive  and  appropriate  that  we 
venture  to  quote  the  following  extract  therefrom : 

"The  history  of  corporations,  as  well  as  the  logic  of  the  case, 
shows  that  there  are  possible  two  general  theories  as  to  the  State's 
duty  in  creating  corporations :  first,  the  old  theory  that,  being 
creatures  of  the  State,  they  should  be  guaranteed  by  it  to  the  public 
in  all  particulars  of  responsibility  and  management;  and  the  modern 
quite  opposite  theory  that,  in  the  absence  of  fraud  in  its  organization 
116 


CHAP.  IV.]       ISSUANCE    AND    PAYMENT   OF    CAPITAL   STOCK.  §  101 

or  government,  an  ordinary  business  corporation  should  be  allowed  to 
do  anything  that  an  individual  may  do.  Under  the  old  theory,  the 
capital  stock  of  a  corporation  was,  in  the  law,  considered  to  be  a 
guarantee  fund  for  the  payment  of  creditors,  as  well  as  affording  a 
method  of  conveniently  measuring  the  interests  of  the  individual 
owners  of  a  corporate  enterprise.  There  resulted  from  this  principle 
not  only  the  fundamental  proposition  that  the  capital  stock,  being  in 
the  nature  of  a  guarantee  fund,  should  be  paid  up  at  its  full  par  in 
actual  cash,  but  all  the  other  provisions  to  protect  creditors  or  other 
persons  having  dealings  with  the  corporation  :  such  as,  that  the  debts 
of  a  corporation  should  not  exceed  its  capital  stock,  designed  prima- 
rily in  the  interest  of  creditors  and  secondarily  in  that  of  the  stock- 
holders, who  were  looked  after  as  carefully  as  if  they  were  the  wards 
of  the  State  when  dealing  in  corporation  matters.  Under  the  modern 
theory  the  State  owes  no  duty  to  persons  who  may  choose  to  deal 
with  corporations,  to  look  after  the  solvency  of  such  artificial  bodies ; 
nor  to  stockholders,  to  protect  them  from  the  consequences  of  going 
into  such  concerns,  the  idea  being  that  in  the  case  of  ordinary  busi- 
ness corporations  the  State's  duty  ends  in  providing  clearly  that  credi- 
tors and  stockholders  shall  at  all  times  be  precisely  informed  of  all 
the  facts  attending  both  the  organization  and  the  management  of 
such  corporations,  and  particularly  that  there  should  be  full  publicity 
given  to  all  details  of  the  original  organization  thereof. 

"The  committee  has  had  little  hesitation  in  determining  which  of 
these  theories  it  should  adopt.  The  limit  of  capitalization  both  in 
amount  and  in  valuation  to  the  net  tangible  assets  of  the  corporation 
has  unquestionably  had  much  to  do  with  the  arrest  of  corporate 
growth  in  this  Commonwealth.  Good-will,  trade-marks,  patents  may 
unquestionably  be  valuable  assets,  which,  under  our  present  method, 
may  not  be  capitalized.  Admirable  as  this  theory  may  have  been,  of 
payment  of  capital  stock  in  full  in  cash,  the  condition  is  so  easily 
avoided  in  practice  that  the  result  is  that  our  existing  law  promises  a 
protection  which,  in  reality,  it  does  not  afford,  and  is  merely  an  em- 
barrassment to  those  who  feel  obliged  to  comply  not  only  with  the 
letter  but  with  the  spirit  of  the  law.  It  is  no  longer  true  that  persons 
dealing  with  corporations  rely  upon  the  State  laws  to  guarantee  their 
solvency  or  their  proper  management.  The  attempts  of  the  Common- 
wealth to  do  so  by  laws  still  remaining  on  its  statute  books  result,  as 
we  apprehend,  only  in  a  false  sense  of  security;  and  we  believe  that 
the  act  proposed,  while  giving  up  the  attempt  to  do  the  impossible 
thing,  will  really,  by  its  greater  attention  to  the  details  of  organiza- 
tion required  to  be  made  public  by  all  corporations,  result  in  an  ad- 
vantage  to  stockholders   and   creditors    more   substantial   than   the 

117 


§  101    INCORPORATION  AND  ORGANIZATION    OF   CORPORATIONS.    [PART  I. 

present  partial  attempt  to  enforce  a  principle  impossible  of  complete 
realization  and  which  is,  under  existing  laws,  easily  evaded. 

"  It  is  impossible  to  reconcile  or  combine  the  two  systems.  Either 
the  old  theory  must  be  maintained,  under  which  the  State  attempts 
though  vainly  to  guarantee  both  to  stockholders  and  creditors  that 
there  is  one  hundred  dollars  of  actual  value  behind  each  one  hundred 
dollars  of  par  value  of  capital  stock,  or  some  other  system  must  be 
adopted  which,  while  not  being  chargeable  with  the  vagueness  and 
laxity  of  the  newer  legislation  of  other  States,  will  permit  a  share  of 
capital  stock,  although  nominally  one  hundred  dollars  in  value,  to  rep- 
resent, as  the  word  implies,  only  a  certain  share  or  proportion,  which 
may  be  more  or  less  than  par,  of  whatever  net  assets  the  corporation 
may  prove  to  have.  Under  a  system  of  this  sort  the  State  machinery 
will  only  provide  that  the  stockholders  and,  perhaps,  the  creditors, 
may  at  all  times  have  access  to  the  corporation  records  or  returns  in 
such  manner  as  clearly  to  show,  both  at  organization  and  thereafter, 
all  of  the  property  or  assets  of  which  such  share  of  capital  stock 
actually  represents  its  proportion  of  ownership. 

"The  question  of  monopoly  the  committee  does  not  conceive  to 
have  been  left  to  its  consideration.  The  limitations  now  existing  on 
the  capitalization  of  business  corporations  are,  no  doubt,  attributable 
to  the  sentiment  which  has  always  existed  against  monopoly,  but  it  is 
clearly  the  policy  of  the  Commonwealth,  as  shown  in  its  recent  legis- 
lation, to  do  away  with  the  attempt  to  prevent  large  corporations, 
simply  because  they  are  large.  Moreover,  it  is  apprehended  that  the 
question  of  monopoly,  or  rather  of  the  abuse  of  the  power  of  large 
corporations,  does  not  result  necessarily  from  the  size  of  corporations 
engaged  in  business  throughout  the  United  States.  In  the  opinion  of 
the  committee,  some  confusion  has  been  created,  in  the  discussion  of 
the  form  of  so-called  trust  legislation,  by  a  failure  to  appreciate  that 
its  real  object  is  not  to  protect  the  investor,  who  can  or  should  learn 
to  take  care  of  himself,  or  the  creditor  who  has  already  learned  to  do 
so.  The  real  purpose  of  such  legislation  is  the  protection  of  the  con- 
sumer. In  other  words,  there  is  no  reason  for  an  arbitrary  limitation 
of  capitalization  unless  it  can  be  used  as  a  means  of  creating  a  mo- 
nopoly which  will  influence  the  price  of  commodities.  In  the  opinion 
of  the  committee,  the  question  of  capitalization  is  not  a  contributing 
factor  in  the  fight  for  a  monopoly.  The  United  States  Steel  Company 
would  have  no  greater  and  no  less  a  monopoly  of  the  steel  business  if 
it  were  organized  with  one-half  of  its  present  capitalization.  The 
Standard  Oil  Company  has  a  very  conservative  capitalization,  and  yet 
it  is  the  most  complete  monopoly  of  any  industrial  corporation  in  this 
country. 

118 


CHAP.  IV.]      ISSUANCE    AND    PAYMENT   OF   CAPITAL   STOCK.  §  101 

"  At  all  events,  it  is  no  better  for  the  State  to  leave  its  citizens  at 
the  mercy  of  the  large  corporations  created  by  other  less  careful  sover- 
eignties, than  to  permit  the  organization  of  corporations  adequate  to 
the  demands  of  modern  business  under  its  own  laws,  subject  to  its 
own  more  careful  regulation  and  control.  Under  our  State  and  Fed- 
eral system  it  is  practically  impossible  for  any  one  State,  by  its  own 
law7s,  to  control  foreign  corporations,  but  so  far  as  possible  at  present 
the  committee  has  sought  to  subject  them  to  the  same  safeguards  of 
reasonable  publicity  and  accurate  returns,  both  as  to  organization  and 
annual  condition,  as  the  State  requires  of  its  own  corporations.  The 
simple  requirement  of  an  annual  excise  tax,  based  on  the  capital- 
ization of  such  foreign  corporations,  will  serve  to  bring  them  under 
the  control  of  this  State,  and  the  way  will  be  open  for  their  further 
regulation  if  desirable.  This  annual  tax  has  been  levied  upon  the 
same  principle  as  the  corresponding  tax  paid  by  home  corporations. 
The  State  should  impose  no  greater  burden  on  foreign  corporations 
than  on  its  own,  but  should,  so  far  as  possible,  subject  them  to  its 
own  laws. 

"The  committee  would  repeat  its  opinion  that,  so  far  as  purely 
business  corporations  are  concerned,  and  excluding  insurance,  finan- 
cial, and  public  service  corporations,  the  State  cannot  assume  to  act, 
directly  or  indirectly,  as  guarantor  or  sponsor  for  any  organization 
under  corporate  form.  It  can  and  should  require,  for  itself  and  for 
the  use  of  all  persons  interested  in  the  corporation,  the  fullest  and 
most  detailed  information,  consistent  with  practical  business  methods, 
as  to  the  details  of  its  organization,  the  powers  and  restrictions  im- 
posed upon  its  stockholders,  and  as  to  the  property  against  which 
stock  is  to  be  or  has  been  issued. 

"  Capital  stock  may  be  paid  for  in  cash  or  by  property.  If  it  is 
paid  for  in  cash,  it  may  be  paid  for  in  full  or  by  instalments,  and  a 
machinery  has  been  created  for  protecting  the  corporation  against  the 
failure  of  the  subscribers  to  stock  to  pay  the  balance  of  their  sub- 
scriptions. If  stock  is  paid  for  by  property,  the  incorporators  and  not 
the  State  are  to  pass  upon  its  value.  Before  any  stock,  however,  can 
be  issued  for  property,  a  description  of  the  property  sufficient  for 
purposes  of  identification,  to  the  satisfaction  of  the  Commissioner  of 
Corporations,  must  be  filed  in  the  office  of  the  Secretary  of  the  Com- 
monwealth. This  document  becomes  a  public  record,  and  may  be 
consulted  by  any  one  interested  in  the  corporation.  If  the  officers  of 
a  corporation  make  a  return  which  is  false  and  which  is  known  to  be 
false,  they  are  liable  to  any  one  injured  for  actual  damages.  If  a  lull 
and  honest  description  is  made  of  property  against  which  stock  is 
issued,  a  stockholder  cannot  complain  because  of  his  failure  to  inform 

119 


§  103    INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS.   [PART  I. 

himself  by  personal  examination  or  investigation  of  the  value  of  the 
property  in  which  he  is,  or  contemplates  becoming,  an  investor. 

"  The  second  principle  upon  which  the  committee  has  acted  in  its 
specific  recommendations  is  this  :  that  the  State  should  permit  the 
utmost  freedom  of  self-regulation  if  it  provides  quick  and  effective 
machinery  for  the  punishment  of  fraud,  and  gives  to  each  stockholder 
the  right  to  obtain  the  fullest  information  in  regard  to  his  own 
rights  and  privileges  before  and  after  he  becomes  the  owner  of 
stock." 

§  102.  Payment  of  Capital  Stock  in  Services.  —  The  statutes  of 
Alabama,  Arkansas,  California,  Colorado,  Delaware,  Florida, 
Idaho,  Kentucky,  Maine,  Missouri,  Montana,  North  Dakota,  South 
Carolina,  South  Dakota,  Texas,  Utah,  Virginia,  Washington,  West 
Virginia,  and  Wisconsin  expressly  authorize  the  payment  of  stock 
in  services.  It  sometimes  becomes  a  question  of  importance  to 
know  just  what  is  meant  by  "  services  "  as  used  in  this  connec- 
tion.1 Frequently  attempts  are  made  to  issue  stock  to  persons 
gratuitously  for  the  use  of  their  name  in  the  promotion  of  the 
corporation  under  the  theory  that  permission  to  use  their  name  is 
a  proper  service  rendered  to  the  company,  against  which  stock 
may  be  issued.  The  current  of  authority  seems  to  be  against  this 
proposition.2 

Still  again,  the  constitutional  provision  which  exists  in  many  of 
the  States  declaring  all  fictitious  increase  of  stock  void  militates 
against  such  lines  of  procedure.3 

Oftentimes  an  attempt  is  made  to  issue  stock  to  promoters  of 
corporations  under  what  is  known  as  "  promotion  stock."  The 
promoters  are  usually  the  incorporators,  and  as  such  are  not 
entitled  to  gifts  of  stock.4  However,  if  in  the  promotion  of  the 
company  services  and  time  have  been  employed,  the  same  may 
be  recompensed  to  the  extent  of  the  just  value  of  such  services. 

§  103.  Payment  of  Capital  Stock  in  Property.  —  In  most  of  the 
Commonwealths  statutes  exist  expressly  authorizing  the  payment 
of  capital  stock  of  a  corporation  in  property.     Even  in  the  absence 

i  See  Arapahoe,  etc.  Co.  v.  Stevens,  13  Fogg  v.  Blair,  139  U.  S.  118 ;  35  Law  Ed. 

Col.  534  ;  22  Pac.  823  ;  Clevenger  v.  Moore  104. 
(N.  J.),  58  Atl.  88.  3  See   Hellerman  v.    Maier,    116    Cal. 

2  P.  S.  Bank  v.  Company,  105  Mich.  416  ;  48  Pac.  377. 
535;  63  N.  W.  514;   Christensen  v.  Eno,  4  Brown    v.   F.    S.    H.   Co.,    119    Fed. 

106  N.  Y.  97;  12  N.  E.  648;  Handley  v.  472. 
Stutz,  139  U.  S.  417;  35  Law  Ed.  227; 
120 


CHAP.  IV.]       ISSUANCE    AND    PAYMENT    OF    CAPITAL   STOCK.  §  103 

of  such  statute  stock  may  doubtless  be  issued  in  the  same  manner, 
provided  the  purchase  of  such  property  is  within  the  express  or 
implied  powers  conferred  by  the  charter  and  the  property  is  of 
such  a  character  as  to  be  suitable  for  the  specific  purpose  for 
which  the  corporation  was  formed.1  Some  few  of  the  States 
describe  in  considerable  detail  just  what  kinds  or  classes  of 
property  may  be  accepted  by  the  corporation  in  exchange  for 
its  capital  stock.  The  incorporation  acts  of  Alabama,  North 
Carolina,  Virginia,  West  Virginia,  and  New  Jersey  are  partic- 
ularly full  in  this  regard.  In  the  absence  of  such  provisions 
corporations  under  the  restrictions  stated  above  may  accept  in 
payment  of  their  capital  stock  all  kinds  of  real  and  personal 
property  having  some  monetary  value,  such  as  mining  lands,  gas 
lands,  patent  rights,  secret  formulae,  trade-marks,  and  the  good 
will  of  an  established  business.2 

The  payment  of  capital  stock  may  be  made  in  notes,  bonds,  or 
mortgages  in  the  absence  of  any  statutory  or  charter  prohibition.3 
But  as  to  creditors,  if  the  notes,  bonds,  or  mortgages  should  turn 
out  to  be  worthless,  the  parties  accepting  such  stock  might  be 
compelled  to  pay  the  par  value  of  such  stock  in  money.4  So  it 
has  been  held  that  stock  of  a  corporation  may  be  paid  for  in 
advertising,5  in  a  license  to  take  minerals  from  lands,6  and  in 
stock  in  other  corporations.7 

In  other  words,  capital  stock  of  a  corporation  may  be  issued 
against  any  property  which  the  corporation  is  authorized  to  pur- 
chase, or  which  is  necessary  for  its  legitimate  business.8 

One  of  the  most  frequent  questions  with  which  an  attorney  has 
to  deal  in  connection  with  the  organization  of  a  corporation  has 
reference  to  devising  some  safe  method  whereby  stock  may  be 
legally  issued  in  the  first  instance  as  full  paid  and  non-assessable, 
to  be  thereafter  sold  below  par  if  necessary  for  the  purpose  of 
procuring  a  working  capital  for  the  company.     The  main  thing 

1  Liebke  v.  Knapp,  79  Mo.  22.  8  Goodrich   v.   Reynolds,  31    111.   490; 

2  Loud    v.  Company,   153  U.  S.  564;     Stoddard  v.  Company,  44  Conn  .  :>4.">. 

141  S.  Ct.  928;  Carr  v.  La  Fevre,  27   Pa.  4  Bouton  v.  Denent,  123  111.   142;    14 

417  ;  American  Tube  &  Iron  Co.  v.  Com-  N.  E.  62. 

pany,  165  Pa.  St.  489;  30  Atl.  940;  Young  5  Liebke  r.  Knapp,  79  Mo.  2'_>. 

v.  Company,  65  Mich.  Ill  ;  31  N.  XV.  814;  8  Shepard  V.  Drake,  61  Mo.  Ap.  134. 

Washburn     v.    Company,    81    Fed.    17;  "   East  N.  Y.  J.  R.  Co.  v.  Lighthall,  86 

Whitehill    v.    Jacobs,    75    Wis.    474;    44  How.  Pr.  481. 

N.  W.  630;  Bank  v.  Company,  32  W.  Va.  8  Bruner  v.  Brown,   139  Ind.  600;  38 

37  ;  59  S.  E.  243  ;  Kelly  v.  Clark,  21  Mont.  N.  E.  318. 

319;  53  Pac.  959. 

121 


§104   INCORPORATION  AND    ORGANIZATION   OF   CORPORATIONS.   [PARTI. 

to  be  kept  in  mind  in  connection  with  the  foregoing  is  to  see  that 
the  stock  is  so  issued  that  future  purchasers  thereof  shall  not  be 
liable  thereon  either  to  the  corporation  or  to  creditors.  This  can 
be  accomplished  most  satisfactorily  in  the  following  manner. 

Have  the  corporation  accept  the  proposition  to  issue  its  capital 
stock,  either  in  whole  or  in  part,  against  real  or  personal  property 
to  be  thereafter  duly  conveyed  or  transferred  to  the  corporation. 
Next  the  property  so  conveyed  or  transferred  should  be  appraised 
at  a  valuation  which  will  stand  the  test  according  to  the  character 
of  the  property  so  conveyed  or  transferred  of  either  the  good  faith 
or  the  speculative  value  rules  already  referred  to.  The  next  step 
is  for  the  party  to  whom  such  stock  is  issued  to  transfer  such 
stock,  either  in  whole  or  in  part,  back  to  the  corporation  under 
a  trust  agreement  providing  that  the  same  shall  be  sold  at  such 
times  and  at  such  prices  as  to  the  board  of  directors  of  the  cor- 
poration will  seem  advisable  for  the  purpose  of  procuring  the 
necessary  working  capital.  Under  such  circumstances  the  stock 
so  transferred,  while  originally  issued  at  par,  may  be  sold  at  the 
best  price  obtainable,  and  the  purchasers  will  not  incur  liabil- 
ity beyond  the  agreed  price  even  to  subsequent  creditors.1  The 
same  is  true  of  stock  that  has  been  forfeited  for  non-payment  of 
assessments.2 

§  104.  Statement  of  True  Value  Rule.  —  In  connection  with  the 
appraisal  of  property  taken  by  a  corporation  in  exchange  for  its 
capital  stock,  the  courts  have  established  various  rules  with  a  view 
to  laying  down  some  satisfactory  principle  upon  which  such 
appraisal  may  be  based  in  those  cases  where  creditors  seek  to 
enforce  as  against  the  holders  of  such  stock  an  alleged  liability 
for  unpaid  stock  subscriptions.  The  various  rules  here  referred 
to  may  be  enumerated  as  follows :  "  the  true  value  rule,"  "  the  good 
faith  rule,"  and  "  the  speculative  value  rule."  It  is  to  the  first 
of  these  that  our  attention  will  now  be  directed. 

What  is  known  as  "  the  true  value  rule  "  is  a  natural  outgrowth 
of  the  adoption  by  many  of  the  courts  of  the  trust  fund  doctrine 
enunciated  by  Judge  Story  in  Wood  v.  Dummer.3     This  may  be 

i  Iron  Co.  et  al.  v.  Hayes  et  al.,  165  Pa.  7  S.  Ct.  482;  Coleman  v.  Howe,  154  111. 

St.  489 ;  30  Atl.  936  ;  Lake  Sup.  Iron  Co.  458  ;  39  N.  E.  725  ;  Kimball  v.  Company, 

v.  Drexel,   90   N.  Y.  87  ;    Davis  Bros.  v.  69  N.  H.  485 ;  45  Atl.  253. 
Company,  101  Ala.  127 ;  8  So.  496 ;  Ailing  2  Pullman  v.  Company,  73  111.  Ap.  313 ; 

v.    Wenzel,   133  111.  264;  24  N.   E.   551;  Otter  v.  Company,  50  Barb.  247. 
M.  &  L.  R,  Ry.  Co.  v.  Dow,  120  U.  S.  287 ;  3  3  Mason,  308 ;  Fed.  Cases,  No.  17944. 

122 


CHAP.  IV.]      ISSUANCE   AND   PAYMENT    OF   CAPITAL   STOCK.  ^105 

stated  as  follows  :  That  the  courts  will  not  treat  anything  .in  the 
shape  of  property  accepted  by  the  corporation  in  exchange  for  its 
capital  stock  as  payment  thereof  except  to  the  extent  of  the  true 
value  of  the  property  received,  wholly  without  regard  to  the  pres- 
ence of  fraud  or  the  absence  of  good  faith  in  the  transaction.1 

Not  only  has  the  true  value  rule  been  adopted  by  many  courts, 
irrespective  of  statute,  but  it  has  found  legislative  recognition  as 
well.  Thus  the  incorporation  act  of  Alaska  requires  that  such 
property  shall  be  assessed  at  its  true  money  value  ;  that  of  Con- 
necticut and  Delaware,  at  its  actual  value ;  in  Kentucky,  at  its 
market  price ;  in  North  Dakota  and  South  Carolina,  at  its  true 
money  value  ;  in  Tennessee  and  Utah,  at  its  fair  cash  value,  and 
Florida,  at  a  just  valuation.  In  Connecticut,  Massachusetts,  and 
North  Dakota  the  necessity  of  making  such  appraisal  according 
to  the  strict  letter  of  the  statute  is  very  forcibly  suggested  by 
making  the  directors  liable  to  all  parties  injured  thereby  in  case 
they  fail  to  make  such  appraisal  as  directed  by  the  act.  Statutory 
provisions  which  exist  in  so  many  of  the  States  declaring  all 
fictitious  increase  of  stock  void  have  been  held  by  the  courts 
not  to  make  the  validity  of  an  over-issue  of  stock  dependent  upon 
the  inquiry  whether  the  money  or  property  received  therefor  was 
of  equal  value  in  the  market  with  the  stock  so  issued,  or  to  restrict 
private  corporations  acting  without  the  approval  of  their  stock- 
holders in  the  sale  of  their  stock  for  money,  property,  or  labor 
done  upon  such  terms  as  they  might  deem  proper,  provided  always 
that  the  transaction  is  a  real  one,  based  upon  present  consideration, 
having  reference  to  legitimate  corporate  purposes,  and  is  not  merely 
a  device  to  evade  the  law  and  accomplish  that  which  is  forbidden.2 

§  105.  Statement  of  Good  Faith  Rule.  —  As  has  already  been 
observed  in  a  previous  section,3  the  trust  fund  theory  of  Justice 
Story  no  longer  obtains  in  a  majority  of  the  States.  With  the 
absence  of  any  general  recognition  by  the  courts  of  this  doctrine, 
there  necessarily  followed  the  abrogation  of  the  true  value  rule, 
which  was  based  largely  upon  the  trust  fund  doctrine.  In  its 
place  has  appeared  in  many  jurisdictions  what  is  known  as  the 
"  good  faith  rule."  The  true  value  rule  in  its  practical  applica- 
tion was  harsh  and  unconscionable,  was  wholly  in  the  interest  of 

*  Shickle  v.  Watts,  94  Mo.  410;  7  Pac.  582;  M.  &  L.  R.  Ry.  Co.  v.  Dow, 
S.  W.  274.  120  U.  S.  287  ;  7  S.  Ct.  482. 

2  Smith  v.  Company,  115  Cal.  584;  47  8  Ante,  §  101. 

123 


§105   INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS.   [PART  I. 

creditors,  and  made  little  account  of  the  interests  of  equally  inno- 
cent stockholders.  The  good  faith  rule,  on  the  other  hand,  while 
often  difficult  of  practical  application,  is  much  more  liberal  and 
fair  to  all  concerned  than  the  rule  which  it  is  now  so  rapidly  sup- 
planting.    It  may  be  stated  as  follows  : 

That  where  the  governing  statute  authorizes  the  shares  to  be 
paid  for  in  property  instead  of  cash,  or  where  the  law  of  the  State 
concedes  this  power,  then  the  fact  that  they  are  so  paid  for  at  a 
fair  valuation  of  the  property,  affords  no  ground  of  complaint  to 
the  creditors,  provided  such  payment  is  made  and  accepted  in 
good  faith.  In  fact,  in  order  to  render  the  transaction  void 
either  gross  over -valuation  or  actual  fraud  must  be  shown.1 

In  order  to  obtain  a  clear  understanding  of  the  distinction  that 
exists  between  the  true  value  rule  and  the  good  faith  rule,  it  is 
necessary  to  understand  the  reasons  which  actuated  so  many  of 
the  courts  in  repudiating  in  the  first  instance  the  trust  fund  doc- 
trine in  order  to  clear  the  way  for  the  adoption  by  such  courts  of 
the  good  faith  rule.  Nowhere  will  be  found  a  better  statement  of 
this  matter  than  that  presented  by  Justice  William  Mitchell  of  the 
Minnesota  Supreme  Court  in  the  case  of  Hospes  v.  Northwestern 
Manufacturing  Company.2 

"  It  is  difficult,"  said  Justice  Mitchell,  "  if  not  impossible,  to 
explain  or  reconcile  decisions  and  cases  bearing  upon  the  trust 
fund  doctrine,  or,  in  the  light  of  them,  to  predicate  the  liability  of 
the  stockholder  upon  that  doctrine.  But  by  putting  it  upon  the 
ground  of  fraud,  and  applying  the  old  and  familiar  rules  of  law 
on  that  subject  to  the  peculiar  nature  of  a  corporation  and  the 
relation  which  its  stockholders  bear  to  it  and  to  the  public,  we 
have  at  once  rational  and  logical  ground  on  which  to  stand.  The 
capital  of  a  corporation  is  the  basis  of  its  credit.  It  is  a  substi- 
tute for  the  individual  liability  of  those  who  own  its  stock.  People 
deal  with  it  and  give  it  credit  on  the  faith  of  it.  They  have  a 
right  to  assume  that  it  has  paid  in  capital  to  the  amount  which 
it  represents  itself  as  having ;  and  if  they  give  it  credit  on  the 
faith  of  that  representation,  and  if  the  representation  is  false,  it 
is  a  fraud  upon  them ;  and  in  case  the  corporation  becomes  insol- 

i  Bank   v.  Alden,  129  U.  S.  372;  32  Whitehill    v.    Jacobs,    75   Wis.    474;  44 

L.  E.  725  ;  Rood  v.  Wharton,  74  Fed.  118 ;  N.  W.  630 ;  Young  v.  Company,  65  Mich. 

Coit  v.  Company,  119  U.  S.  343;  7  S.  Ct.  Ill ;  31  N.  W.  814. 
231;  Boynton  v.    Hatch,  47   N.  Y.  225;  a  48  Minn.  174;  50  N.  W.  1117. 

Van  Cott  v.   Van  Brunt,  82  N.  Y.  535; 
124 


CHAP.  IV.]      ISSUANCE   AND   PAYMENT    OF    CAPITAL   STOCK.  §  106 

vent  the  law,  upon  the  plainest  principles  of  common  justice,  says 
to  the  delinquent  stockholder,  '  Make  that  representation  good  by 
paying  for  your  stock.'  It  certainly  cannot  require  the  invention 
of  any  new  doctrine  in  order  to  enforce  so  familiar  a  rule  of  equity. 
It  is  the  misrepresentation  of  fact  in  stating  the  amount  of  capital 
to  be  greater  than  it  really  is  that  is  the  true  basis  of  the  liability 
of  the  stockholders  in  such  cases  ;  and  it  follows  that  it  is  only 
those  creditors  who  have  relied,  or  who  can  fairly  be  presumed  to 
have  relied,  upon  the  professed  amount  of  capital,  in  whose  favor 
the  law  will  recognize  and  enforce  an  equity  against  the  holders 
of  '  bonus  stock.'  This  furnishes  a  rational  and  uniform  rule,  to 
which  familiar  principles  are  easily  applied,  and  which  frees  the 
subject  from  many  of  the  difficulties  and  apparent  inconsistencies 
into  which  the  'trust-fund'  doctrine  has  involved  it;  and  we 
think  that  even  when  the  '  trust  fund '  doctrine  has  been  invoked 
the  decision  in  almost  every  well-considered  case  is  readily 
referable  to  such  a  rule." 

Another  statement  of  the  good  faith  rule  is  to  be  found  in  Kelley 
v.  Company,1  to  the  following  effect:  If  the  nature  of  the  property 
and  the  extent  of  the  valuation  are  such  that  the  latter  might  have 
been  due  to  errors  of  judgment,  then  to  render  the  transaction 
invalid  as  against  creditors  actual  fraud  must  be  shown,  and  the 
question  is  one  of  fact.  On  the  other  hand,  if  the  over-valuation 
is  so  gross  that  it  could  not  have  been  due  to  mere  errors  of  judg- 
ment, the  transaction  will  be  held  fraudulent  as  a  matter  of  law.2 

§  106.  Statement  of  "  Speculative  Value  Rule."  —  It  must  be 
admitted   that   neither   the  "  true   value    rule "    nor  the  "  good 

i  21  Mont.  319;  51  Pac.  959.  Ry.  Co.  (Cal.),  51   Pac.   710;   Jenkins  v. 

2  Coleman  ».   Howe,  154  111.  458;  39  Bradley,  104  Wis.  540;  80  N.  W.  1025; 

N.  E.  725  ;  N.  II.  H.  N.  Co.  v.  Company,  Gamble  v.  Q.  C.  W.  Co.,  123  N.  Y.  91  ; 

142    Mass.  349;    7   N.  E.    773;    Hastings  25    N.   E.   201  ;  Young  v.   Erie   Iron  Co., 

Malting  Co  v.  Company,  65  Minn.  28;  67  65  Mich.   Ill;    31    N.    W.  814;   Bank   '■• 

N.  W.  652;    Northern  Trust  Co.  v.  Com-  Alden,    129   U.    S.   372;  32    L.    E.    725  ; 

pany,  75  Fed.  936  ;   affirmed  in  Dickinson  Coffin  o.  Ransdell,  110  Ind.  417  ;  11  X.  E. 

'•.Northern  Trust  Co.,  80  Fed.  452;   Wash-  20;  Bickley  v.  Schlag,  46  N.  J.  Eq   538; 

burn  v.  Company,  81    Fed.  17;  Goodrich  20  Atl.  250;  S.  R.  C.  S.  Co.  r.  Rankin, 

v.  Reynold*,  31  111.490;  Edwards  v.  Com-  45    111.   Ap.   226;  Bruner  v.  Brown,  139 

pany,  27  La.  Ann.  474;  Whitehill v.  Jacobs,  Ind.  600;  38  N.  E.  318;  Gilkie,  etc.  Co. 

75  Wis.  474  ;  44  N.  W.  630;  Humaaton  v.  v.  I).  T.,  etc.  Co.,  46  Neb.  333  ;  64  N.  W. 

Company,    2t)   Wall.    20;  State  v.   Webb,  978;   A.  T.,  etc.  Co.  r.  Hays.    165    Pa   Si. 

110   Ala.   214;   20   So.   402;    Skinner  v.  489 ;  30  Atl.  936 ;  Jones  v.  Whitworth,  94 

Smith,  134  N.  Y  240;  31  N.  E.  911  ;  Par-  Tenn.  602  ;  30  S.   W.  736;  M.   T    Co.  <•. 

make  v.  Price,  208  111.544;  70  N.  E.  725;  S.  C,  etc.   Co.,  16    Wash.  499;    1-    Pac 

Phelan    <•.    Hazard,    l'.»   Fed.   Cases   No.  333 ;  Taylor  t\  Cummings,  127  Fed.  108. 


11068;  5  Dill.  45;  Smith  v.  Ferrier,  etc. 


L25 


§  106    INCORPORATION  AND   ORGANIZATION    OP   CORPORATIONS.    [PART  U 

faith  rule"  affords  a  satisfactory  basis  for  determining  all  ques- 
tions that  may  arise  relative  to  the  issuance  of  the  capital  stock 
of  a  corporation  as  full-paid  and  non-assessable  in  exchange- 
for  property  transferred  to  it.  In  practice,  neither  the  inequi- 
table "  true  value  rule  "  nor  the  fairer  "  good  faith  rule  "  will  be 
found  to  rest  on  any  satisfactory  or  substantial  basis.  Of  late 
years,  without  in  terms  calling  it  by  that  particular  name, 
courts  of  high  repute  have  in  substance  adopted  what  will  be 
termed  here  the  "  speculative  value  rule."  This  may  be  defined 
as  that  rule  whereby  a  corporation  is  permitted,  in  issuing  its 
capital  stock  as  full  paid  and  non-assessable  in  exchange  for 
either  real  or  personal  property,  to  appraise  the  latter  at  its 
potential  speculative  value,  looking  towards  its  future  development 
rather  than  at  its  present  intrinsic  value.  The  statement  of  the 
rule  would  be  incomplete  without  adding  that  in  all  cases  where 
such  appraisal  is  questioned,  the  burden  of  proof  of  attacking  the 
same  is  upon  the  creditor. 

The  rule  in  its  practical  application  throws  upon  the  creditor 
the  burden  of  showing  that,  viewed  from  a  purely  speculative  stand- 
point, the  appraisal  made  by  the  corporation  of  such  property 
constituted  not  merely  an  over-valuation,  but  a  fraudulent  over- 
valuation as  well.  Before  attempting  to  discuss  at  length  the 
"  speculative  value  rule,"  as  stated  above,  it  might  not  be  without 
its  advantage  to  trace  briefly  those  evolutionary  steps  along  legal 
lines  which  appear  to  have  paved  the  way  for  a  fuller  recognition 
on  the  part  of  the  courts  of  the  rule  here  contended  for.  In  the 
first  place,  we  have  the  enunciation  by  Justice  Story,  in  1824,  of 
the  now  all  but  moribund  "  trust  fund  doctrine  "  already  referred 
to.1  Then  ensued  a  period  of  years  when  the  courts,  one  after 
another,  proceeded  to  adopt  the  doctrine  just  mentioned,  although 
it  was  unknown  to  the  common  law.  Gradually,  however,  it  came 
to  be  recognized  that  the  trust  fund  theory  was  wrong  in  principle 
as  well  as  inequitable,  leading  in  its  practical  operations  to  harsh 
and  unconscionable  results.  This  gradually  led  to  the  adoption 
by  many  courts  of  a  better  and  more  enlightened  doctrine  which 
predicated  the  liability  of  stockholders  to  creditors,  not  upon  the 
trust  fund  doctrine,  but  upon  the  sounder  ground  of  fraud.2 

1  See  Wood  v.  Dummer,  3  Mason,  U.  S.  Justice  Mitchell  in  Hospes  v.  Company* 
308.  48  Minn.  174;  50  N.  W.  1117. 

2  See    statement  of  this   doctrine  by 

126 


CHAP.  IV.j      ISSUANCE    AND    PAYMENT   OF    CAPITAL   STOCK.  §  106 

This  was  followed  by  the  enunciation  on  the  pa**t  of  certain 
courts  of  several  important  rules  governing  the  question  of  the 
ourden  of  proof  in  cases  where  attempts  were  made  by  creditors 
to  enforce  an  alleged  stockholder's  liability,  on  the  ground  that 
the  property  against  which  such  stock  had  been  issued  had  been 
grossly  over- valued.  A  fair  presentation  of  the  rules  here  referred 
to  may  be  found  in  the  opinion  of  the  Supreme  Court  of  Minnesota. 
in  Hastings  Malting  Co.  v.  Iron  Range  Brewing  Co.,1  reading  as 
follows : 

"  In  principle  it  can  make  no  difference  whether  the  stock  issued  as 
paid  up  is  bonus  stock,  pure  and  simple,  or  whether  it  was  sold  for 
cash  for  less  than  its  par  value,  or  for  property  at  a  gross  over- 
valuation. In  the  first  two  cases  the  question  of  fraud  would  be  one 
of  law,  for  on  the  issuing  by  the  corporation  of  its  stock  as  paid  and 
its  acceptance  by  the  stockholders  when  in  fact  nothing  was  ever  paid 
for  it,  or  where  a  sum  of  money  less  than  its  par  value  was  paid  and 
accepted  for  it,  there  is  no  opportunity  for  a  mistake  of  judgment; 
the  law  in  such  cases  presumes  an  intention  to  defraud.  Ordinarily, 
however,  the  question  is  one  of  fact. 

"  Upon  principle  and  authority  a  corporation  may  in  good  faith  issue 
paid  up  shares  of  its  stock  for  the  purchase  of  property  at  a  fair 
valuation,  and  in  such  case  the  corporation  and  its  creditors  are  bound 
by  it. 

"  In  the  practical  application  of  the  rule  it  must  be  kept  in  mind  that 
fraud,  actual  or  constructive,  is  the  basis  of  the  stockholders'  liability 
to  the  creditor.  On  the  one  hand,  the  value  of  the  property  is  to  be 
determined,  not  from  subsequent  events,  but  as  of  the  time  of  the 
transaction,  and  from  the  nature,  situation,  and  condition  of  the  prop- 
erty as  they  honestly  appeared  to  the  parties  at  the  time.  Although 
there  was  in  fact  an  over-valuation  of  the  property,  it  will  not  render 
the  stockholders  liable  for  the  deficiency  if  it  was  the  result  of  an 
honest  mistake  or  error  of  judgment.  On  the  other  hand,  where  the 
nature  and  condition  of  the  property  are  such  that  its  value  is  well 
known  and  understood,  or  is  capable  of  being  readily  estimated  and 
ascertained,  and  the  property  is  transferred  to  the  corporation  at  a 
gross  over-valuation  for  paid-up  shares,  the  transfer  is  prima  facie 
fraudulent  as  to  subsequent  creditors,  and  as  against  them  the  burden 
is  upon  the  shareholders  to  rebut  the  presumption." 

It  is  a  principle  of  law  universally  recognized  that,  except  in 
casesof  trust  relationships,  the  burden  of  proof  in  all  cases  relative 

1  65  Minn.  28  ;  07  N.  W.  652. 

127 


§  106   INCORPORATION  AND    ORGANIZATION   OF   CORPORATIONS.   [PART  I. 

to  proof  of  fraud  is  cast  upon  the  party  who  alleges  that  such 
fraud  exists.1 

By  no  stretch  of  the  imagination  can  the  relationship  that  exists 
between  creditors  of  a  corporation  and  the  corporation  itself  be 
termed  a  "  trust  relationship."  The  relation  is  neither  confidential 
nor  fiduciary,  as  the  same  is  construed  by  the  courts.2  There  is 
no  more  reason  for  treating  this  relationship  as  one  of  trust  than 
there  is  in  the  case  of  ordinary  creditors  and  debtors.  It  was 
doubtless,  however,  as  a  sort  of  concession  to  the  fanciful  trust 
fund  doctrine  of  Justice  Story,  that  there  early  appeared  a  ten- 
dency, upon  the  part  of  certain  courts,  to  engraft  thereon  the 
absurd  principle  that,  where  the  board  of  directors  of  a  corporation 
have  duly  appraised  in  the  first  instance  property  taken  by  the 
latter  in  exchange  for  its  capital  stock,  the  rule  should  obtain 
that  where  such  property  has  a  well  known  or  easily  ascertained 
value,  and  is  taken  at  a  valuation  which  to  the  court  seems 
greatly  in  excess  of  its  real  value,  then  in  such  cases  it  will  be 
presumed  that  such  valuation  is  not  made  in  good  faith,  but  is 
made  for  a  fraudulent  purpose.  To  overcome  this  presumption 
the  burden  is  upon  the  stockholders  to  introduce  satisfactory 
evidence  explanatory  of  this  presumptively  fraudulent  over- 
valuation. Some  courts  even  went  further,  and  asserted  that 
where  the  over-valuation  was  so  great  that  the  fraudulent  inten- 
tion appeared  on  its  face  and  it  is  not  explained,  it  should  be  held 
fraudulent  as  a  matter  of  law,  without  submitting  the  question  to 
a  jury. 

These  drastic  rules  had  full  sway  for  a  number  of  years,  until 
certain  of  the  courts  saw  fit  to  modify  their  rigor  to  no  inconsider- 
able extent.  Then  the  rule  was  enunciated  that  where  stock  has 
been  paid  for  either  in  property  or  services,  although  it  appears 
that  there  was  an  over-valuation  in  appraising  the  same,  yet  if  it 
appears  to  the  court  not  to  be  so  gross  and  unconscionable  as  to 
compel  it  to  say,  as  a  matter  of  law,  that  it  must  have  been  inten- 
tional, it  will  be  presumed  that  the  valuation  was  honestly 
made,  and  the  burden  of  attacking  the  same  will  be  upon  the 
creditors  who  seek  to  hold  the  stockholders  upon  an  alleged 
stockholders'  liability  for  unpaid  stock  subscriptions.3 

1  See  Phelan  v.  Hazard,  5  Dil.  45;  N.  E.  725  ;  Davis  Bros.  v.  Company,  101 
Bickley  v.  Schlag,  46  N.  J.  Eq.  533.  Ala.  127  ;  8  S.  W.  496 ;  Manhattan  Trust  I 

2  See  Robinson  v.  Pope,  57  Cal.  496.  Co.  v.  Company,  16  Wash.  499;  48  Pa«. 

3  Coleman   v.   Howe,  154  111.  458;  39  333. 

128 


CHAP.  IV.]      ISSUANCE   AND   PAYMENT   OF   CAPITAL   STOCK.  §  106 

So  much,  then,  for  the  historical  development  of  the  various 
doctrines  relative  to  the  subject  matter  now  before  us.  Turning 
again  to  consider  the  "  speculative  value  rule,"  the  same  must 
be  looked  at  from  two  separate  and  distinct  standpoints,  to  wit  : 
(1)  as  dividing  all  properties  which  a  corporation  proposes  to 
take  over  in  exchange  for  its  capital  stock  into  two  broad  and 
well-defined  classes,  known  respectively  as  "  speculative "  and 
"  non-speculative "  properties ;  (2)  as  establishing  a  rule  for 
appraising  the  value  of  speculative  properties  based  not  upon  the 
intrinsic  value  of  the  same,  but  rather  upon  their  availability  for 
purposes  of  speculation,  looking  towards  an  enhancement  of  their 
present  value  by  the  future  expenditure  of  funds  in  the  develop- 
ment thereof. 

Let  us  now  turn  our  attention  to  the  classification  of  properties 
above  referred  to  designated  as  "  speculative  "  and  "  non-specula- 
tive." "  Speculative  "  properties  may  be  defined  as  those  whose 
nature  is  such  that  they  have  not  only  a  present  intrinsic  value, 
but  a  considerable  potential  value  as  well,  speculative  in  its 
nature,  and  dependent  upon  future  development  in  order  to  arrive 
at  a  definite  estimation  as  to  the  amount  thereof.  Non-specula- 
tive properties,  on  the  other  hand,  are  those  whose  intrinsic 
worth  alone  gives  them  a  market  value  or  a  value  which  can  be 
easily  ascertained  by  reference  to  well-recognized  standards  of 
value.  In  the  first  class  of  properties  might  be  enumerated 
mining  rights,  patent  rights,  oil  and  gas  lands,  secret  processes 
and  trade  secrets,  patent  medicines,  etc.  In  the  second  class 
might  be  named  real  estate  to  be  employed  for  business,  dwelling, 
farming,  and  grazing  purposes,  stock  in  trade  and  personal  prop- 
erty which  is  the  common  subject  of  bargain  and  sale  between  man 
and  man  at  current  prices,  determined  by  the  law  of  supply  and 
demand.  In  the  opinion  of  the  Supreme  Court  of  Minnesota,  in 
Hastings  Malting  Company  v.  Iron  Range  Brewing  Company, 
cited  above,  it  will  be  noted  that  the  rule  that  is  to  be  applied  in 
those  cases  where  the  nature  and  condition  of  the  property  are  such 
that  its  value  is  well  known  or  understood,  or  is  capable  of  being 
readily  estimated  and  ascertained,  is  clearly  stated.  The  opinion, 
however,  fails  to  state  with  equal  clearness  the  rule  that  is  to  be 
applied  where  the  value  of  the  property  is  not  of  the  character 
just  described,  but  is  of  that  type  herein  referred  to  as  k*  specu- 
lative," having  no  present  or  well-known  readily  ascertained 
9  129 


§  106    INCORPORATION  AND    ORGANIZATION   OP   CORPORATIONS.  [PART  E. 

value,  but  depending  entirely  upon  future  development  in  order  to 
determine  what  such  value  may  be.  By  implication  only  is  the 
true  rule  in  such  cases  suggested  by  the  Minnesota  court.  How- 
ever, in  Kelly  v.  Clark,1  the  Montana  Supreme  Court  in  effect 
declares  the  rule  in  such  cases  to  be  that  where  the  property  is 
speculative  in  character,  and  as  such  the  alleged  over-valuation 
thereof  may  have  been  possibly  due  to  errors  in  judgment,  then  the 
burden  of  proof  is  upon  the  creditors  seeking  to  attack  the  valu- 
ation by  showing  actual  fraud  in  the  transaction. 

Let  us  turn  now  to  the  question  as  to  how  the  valuation  of  spec- 
ulative properties  is  to  be  ascertained.  Generally  speaking,  the 
rule  to  be  adopted  is  this :  "  What,  under  all  the  circumstances, 
considering  the  proposed  use  to  which  it  is  to  be  put,  and  the  gen- 
eral purpose  for  which  the  corporation  was  created,  is  the  fair 
value  of  the  property  against  which  its  capital  stock  is  to  be 
issued  ?"  2  In  this  age  of  speculative  enterprises  it  is  a  matter  of 
common  knowledge  that  the  value  of  properties  taken  over  by 
corporations  about  to  embark  in  speculative  enterprises  is  depend- 
ent almost  wholly  upon  their  availability  for  the  purpose  in  hand 
and  upon  the  promise  which  external  appearances  give  them  as 
to  their  having  a  large  and  considerable  potential  value.  Thus, 
for  example,  sixty  square  feet  of  land  may  have  a  very  small 
intrinsic  value  when  considered  as  farming,  grazing,  or  residence 
property,  and  yet  possess  an  immense  potential  value  when  treated 
as  mining  property.  It  is  the  expectation  of  success  which  in- 
duces investors  to  put  their  money  into  such  enterprises,  and 
which  justifies  a  valuation  far  in  excess  of  the  property's  intrinsic 
value.  Such  valuations,  it  must  be  admitted,  are  necessarily 
arbitrary  in  character.  This  fact  the  legislatures  in  many  States 
have  recognized,  and  the  courts  should  not  hesitate  to  do  the 
same.3 

The  value  of  property  which  is  transferred  to  the  corporation 
is  also  not  to  be  estimated  by  what  it  cost  the  promoter.  It  is  the 
speculative  and  experimental  results  which  afford  a  basis  for  the 
large  valuation.  By  value  in  such  cases  is  meant  the  speculative 
value  for  the  uses  and  purposes  of  the  company  in  its  proposed 
speculative  enterprise,  and   not  the  actual  market  value  or  the 

i  21  Mont.  291  ;  53  Pac.  959.  3  See   Civil   Code   of  Montana,  1895„ 

2  See  Gamble  v.  Company,  123  N.  Y.     §  410. 
91;  25  N.  E.  201. 

130 


CHAP.  IV.]      ISSUANCE   AND    PAYMENT   OF   CAPITAL   STOCK.  §  106 

actual  intrinsic  value  thereof  at  the  time  the  properties  are  taken 
over  by  the  company. 

The  view  of  the  matter  here  presented  was  first  suggested,  it  is 
believed,  by  the  United  States  Circuit  Court  many  years  ago  in  the 
case  of  the  South  Mountain  Consolidated  Mining  Co.1  At  the  trial 
below  in  this  case  the  court  spoke  as  follows : 

"  The  mode  in  which  mining  companies  are  formed  is  familiar  to 
all.  The  owners  of  the  property,  or  persons  expecting  to  become 
such,  by  complying  with  a  few  simple  formalities  form  themselves 
into  a  corporation,  to  which  the  property  is  conveyed.  The  amount 
of  capital  stock  which  is  required  to  be  stated  in  the  certificate  of 
incorporation  is  usually  fixed  at  a  purely  arbitrary  sum,  and  divided 
into  as  many  shares  as  convenience  or  caprice  may  dictate.  It  neither 
bears  nor  is  intended  nor  supposed  by  the  public  to  bear  the  slight- 
est relation  to  the  real  value  of  the  property  — a  value  nearly  always 
conjectural  and  very  often  imaginary." 

In  this  same  case  on  appeal  the  court  observed  as  follows  : 2 

"  The  mode  of  forming  mining  corporations  is  well  known  to  any 
body.  A  prospector  finds,  as  he  supposes,  a  valuable  mine.  It 
requires  capital  to  work  it  which  he  does  not  possess.  He  goes 
to  the  money  and  business  centres,  where  he  finds  capitalists  accus- 
tomed to  organize  corporations  for  the  development  of  new  mines, 
and  makes  such  arrangements  as  he  can.  He  presents  such  evidence 
of  the  value  of  his  mine  as  he  has  obtained.  Little  is  known  of  the 
real  value.  It  may  be  worth  nothing  and  it  may  be  worth  millions. 
Parties  are  found  willing  to  take  hold  of  the  enterprise.  They  agree 
to  incorporate  and  fix  the  capital  stock  at  some  purely  nominal  amount, 
and  divide  it  into  a  certain  number  of  shares,  corresponding  to  the 
amount  of  capital  adopted.  The  owner  of  the  mine,  for  an  agreed 
number  of  shares  and  in  consideration  of  the  promises  of  the  other 
parties  to  assist  in  the  development  of  the  mine,  conveys  the  mine 
and  receives  for  it  the  amount  of  stock  agreed  upon.  The  other 
parties,  for  their  services  in  organizing  and  managing  the  company  and 
its  business,  receive  a  large  portion  of  the  stock,  this  being  usually  a 
considerable  amount  of  stock  reserved  by  the  company,  which  is  put 
upon  the  market  and  sold  for  such  price  as  can  be  obtained,  to  raise 
a  fund  to  secure  machinery  and  develop  the  mine.  The  price  of  this 
stock  is  of  course  determined  by  the  prospect  of  the  mine,  its  location, 
and  its  probable  richness,  and  the  confidence  of  the  public  reposed  in 

1  7  Sawyer,  30 ;  8  Sawyer,  366.  2  8  Sawyer,  U.  S.  366. 

131 


§  106    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.   [PART  I. 

the  experience,  ability,  and  character  of  those  having  the  management. 
Mining  corporations  are  sui  generis.  They  are  organized  and  carried  on 
upon  principles  wholly  different  from  banking,  railroad,  insurance,  and 
ordinary  commercial  corporations  having  a  subscribed  capital  stock."1 

But  nowhere  is  the  speculative  element  in  the  valuation  of 
property  better  considered  than  by  the  Supreme  Court  of  Penn- 
sylvania, in  the  case  of  Iron  Co.  et  al,  v.  Hays  et  al?  The  facts 
in  this  case  briefly  stated  are  as  follows  : 

A  corporation  was  organized  by  two  co-partners  to  take  over 
certain  lands  owned  or  leased  by  them  and  believed  to  contain 
gas  and  oil.  They  capitalized  the  company  for  $500,000,  and 
issued  the  whole  of  its  capital  stock  to  themselves  against  the 
properties  above  referred  to.  These  latter  had  an  intrinsic  value 
representing  but  a  very  small  percentage  of  the  capitalization  of 
the  company.  The  incorporators  retained  $175,000  of  the  capital 
stock  of  the  corporation  for  their  own  benefit,  and  transferred 
the  balance  to  the  corporation  in  trust  to  be  sold  by  the  board  of 
directors  thereof  for  the  purpose  of  procuring  working  capital  for 
the  corporation.  Later  on,  the  lands  proved  to  be  practically 
worthless,  and  the  company  became  insolvent,  and  creditors 
thereof  sued  the  stockholders,  alleging  that  the  stock  held  by 
them  had  not  been  fully  paid  for.  In  passing  upon  the  various 
legal  questions  involved,  the  court  spoke  as  follows : 

"  Attention  should  be  called  first  to  the  method  of  organization,  to 
the  facts  showing  the  situation  of  the  parties,  the  necessity  for  ob- 
taining corporate  powers,  and  the  provision  made  for  a  working  capi- 
tal with  which  to  enter  upon  the  proposed  corporate  enterprise. 

"  The  corporators  had  been  partners.  As  such  they  had  been  en- 
gaged in  procuring  leases  and  drilling  wells  in  search  for  oil.  In 
their  search  they  had  not  been  successful,  but  two  of  the  wells  drilled 
by  them  proved  to  be  valuable  gas  wells.  This,  taken  in  connection 
with  other  developments  in  the  same  general  region,  was  well  calcu- 
lated to  induce  the  belief  that  they  were  the  possessors  of  a  large  and 
valuable  gas  territory  that  should  be  promptly  developed  and  utilized 
or  its  value  would  steadily  decline  by  reason  of  drainage  from  the 
operation  of  others.  They  could  not  utilize  their  gas  without  trans- 
porting it  to  a  market.  They  could  not  transport  it  to  advantage 
except  as  a  natural  gas  company  possessing  the  powers  conferred  by 

1  In  re  South  Mountain  Con.  Min.  Co.,         2  165  Pa.  St.  489  ;  30  Atl.  936. 
8  Saw.  366. 

132 


CHAP.  IV.]      ISSUANCE    AND    PAYMENT   OF   CAPITAL   STOCK.  §  106 

law.  This  determined  them  to  organize  a  corporation  for  the  pro- 
duction and  transportation  of  natural  gas  and  to  transfer  their  gas- 
wells  and  leases  to  the  corporation.  When  this  had  been  decided  on, 
the  first  question  to  present  itself  was,  how  shall  the  partnership  con- 
vey its  property  to  the  corporation  so  as  to  secure  to  its  members  the 
same  relative  interest  in  the  stock  of  the  corporation  they  now  have 
in  the  partnership  property?  The  next  question  was,  how  shall  we 
secure  the  necessary  working  capital  to  enable  the  corporation  to  go 
forward  with  the  work  of  producing,  transporting,  and  selling  natural 
gas?  In  a  general  way  these  questions  were  answered  by  the  adop- 
tion of  the  scheme  already  referred  to.  The  value  of  the  properties 
held  by  the  firm  was  set  down  at  $175,000,  the  working  capital  needed 
at  $325,000.  To  meet  both  purposes  the  capital  stock  of  the  corpora- 
tion was  fixed  at  $500,000.  It  teas  all  to  be  issued  as  paid  up  stock  in 
exchange  for  the  property  conveyed  to  the  corporation,  subject  to  the 
agreement  that  all  except  $175,000  thereof  was  to  be  contributed  to 
the  treasury  to  be  sold  as  a  means  of  raising  the  money  needed  for  a 
working  capital.  .  .  . 

"  In  what  respect,  then,  have  the  defendant  stockholders  failed  in  the 
performance  of  their  undertaking  to  the  corporation  ?  The  scheme 
was  to  turn  over  all  the  gas  wells,  leases,  etc.  to  the  corporation  for 
6175,000,  and  provide  it  with  the  means  of  prosecuting  the  gas  busi- 
ness by  putting  into  its  treasury  paid  up  stock,  or  what  should  be  sold  as 
paid  up  stock,  to  the  amount  of  $325,000  more.  .  .  . 

"  The  court  below  found  'that  the  facts  in  evidence,  connected  with 
the  fact  that  within  a  few  months  it  was  demonstrated  that  the  prop- 
erty was  of  very  small  value,  threw  on  the  stockholders  the  burden  of 
showing  clearly  that  the  sale  from  themselves  to  themselves  was  in 
good  faith  on  a  reasonable  belief  in  the  value  of  the  property.'  But 
what  has  the  fact  that,  after  some  months  spent  in  development  of  their 
territory,  the  corporation  found  itself  disappointed  in  its  productiveness 
and  a  heavy  loser  in  consequence,  to  do  with  the  good  faith  of  their  pur- 
chase or  the  reasonableness  of  the  price  ? 

"  These  are  to  be  judged  of  by  the  facts  before  them  when  the  arrange- 
ment was  made.  The  character  of  the  gas  wells  already  opened,  the 
extent  of  the  territory  covered  by  the  leases,  its  relation  toother  develop- 
ments, its  nearness  to  an  a  den  a  ate  market,  and  the  i>rububle.  duration  of 
the  supply  within  reach,  were  the  consider  at  inns  that  would  affect  the 
judgment  of  buyers  and  sellers  and  of  the  business  public  as  to  its  value. 
The  subsequent  disappointment  must  therefore  be  left  nut  of  the  ens,',  and 
the  transaction  examined  in  the  light  in  which  it  was  seen  when  the 
arrangement  was  entered  into.  When  this  is  done  and  the  absence  of 
any  suggestion  or  finding  of  fraud  is  remembered,  it  is  not  easy  to  see 

L33  ' 


§  106    INCORPORATION  AND    ORGANIZATION    OP    CORPORATIONS.  [PART  I. 

what  there  is  in  the  case  to  shift  the  burden  of  proof  or  to  require  the 
stockholders  to  establish  the  good  faith  of  the  transaction  which  the 
plaintiffs  have  not  attacked.  The  action  proceeds  on  the  theory  that 
the  subscriptions  to  the  capital  stock  are  wholly  unpaid.  The  proofs 
show  that  they  were  paid  exactly  in  accordance  with  the  agreement,  and 
that  this  payment  had  been  recognized  by  the  corporation  from  the 
first.  The  decree,  as  finally  made,  seems  to  rest  on  the  conclusion  that 
although  paid  they  were  paid  in  property  which  was  taken  at  too  high  a 
price.  It  is  true  that  no  such  thing  was  alleged  in  the  bill  or  shown  in 
the  proofs,  but  if  the  value  of  the  property  is  to  be  determined  in  the 
light  of  subsequent  events,  a  light  which  the  parties  did  not  have  when 
this  sale  was  arranged,  the  conclusion  of  the  court  below  would  be 
reasonable.  The  trouble  with  it,  however,  is,  that  it  rests  on  the  in- 
trinsic value  of  the  property  as  ascertained  by  actual  developments 
made  after  the  sale,  while  the  real  question  relates  to  the  apparent  value 
as  indicated  by  the  circumstances  existing  at  the  time  of  the  sale.  .  .  . 
"  We  should  agree  with  the  court  below  that  the  property  was  sold 
at  more  than  its  actual  value,  if  that  value  was  to  be  determined  by 
subsequent  results  rather  than  by  prospects  as  they  appeared  at  the 
time  of  sale.  But  if  the  parties  were  mistaken  in  relation  to  its  value, 
we  do  not  see  how,  in  the  absence  of  any  averment  of  fraud  in  the 
transaction,  the  sale  can  be  disregarded  and  the  subscriptions  to  the 
capital  stock  treated  as  unpaid.  The  proofs  show  that  they  were 
paid  exactly  in  accordance  with  the  agreement  under  which  they 
were  made,  and  until  that  agreement  is  attacked  as  fraudulent,  the 
creditors  stand  in  no  better  position  than  the  corporation  itself.  The 
decree  is  reversed  so  far  as  it  requires  payment  of  the  stock  subscrip- 
tions or  any  part  thereof."  * 

So  much,  then,  for  the  question  as  to  the  proper  basis  for  ap- 
praising property  of  a  speculative  character  when  the  same  is 
transferred  to  the  corporation  in  exchange  for  its  capital  stock. 
Let  us  add  a  few  more  words  to  what  was  said  in  the  foregoing 
opinion  relative  to  the  question  as  to  where  the  burden  of  proof 
lies  in  such  cases,  when  the  valuation  placed  upon  the  property  is 
impeached  by  creditors  who  seek  to  enforce  an  alleged  stock- 
holder's liability  for  unpaid  stock  subscriptions.  Let  us  note  in 
this  connection,  first,  the  statement  of  the  law  made  by  the  Court 
of  Appeals  of  Maryland  in  Brandt  v.  Ehlen,2  where  the  court 
observed  "  we  take  the  law  to  be  well  settled,  that  a  company 

i  See  also  Kelly  v.  Clark,  21    Mont.  2  59  Md.  1. 

291 ;    53    Pac.    959 ;    Montana    Ry.    Co. 
v.  Warren,  6  Mont.  275 ;  12  Pac.  641. 

134 


CHAP.  IV.]      ISSUANCE    AND    PAYMENT   OF   CAPITAL   STOCK.  §  106 

may  receive,  in  payment  of  the  shares  of  its  capital  stock,  any 
property  which  it  may  lawfully  purchase.  So  long  as  the  trans- 
action stands  unimpeached  for  fraud,  the  courts  will  treat  as 
a  payment  that  which  the  parties  shall  agree  to  be  a  payment,  and 
this  too  in  cases  where  the  rights  of  creditors  are  involved."  The 
Supreme  Court  of  Massachusetts  in  a  recent  case 1  observed  that 
it  appears  to  be  well  settled  that  in  the  absence  of  fraud  an  agree- 
ment can  ordinarily  be  made  by  which  stockholders  can  be 
allowed  to  pay  for  their  shares  in  patents,  mines,  or  other  property 
to  which  it  is  not  easy  to  assign  a  determinate  value.  At  least, 
one  court  of  high  authority  has  adopted  the  rule  that  where  one 
becomes  a  creditor  of  a  corporation  knowing  the  manner  in  which 
its  stock  has  been  paid,  he  is  deemed  to  waive  his  right  to  assert 
that  there  has  been  an  over-valuation  of  the  property  against  which 
the  corporation  issued  its  stock.2  It  is  to  go  but  a  step  for- 
ward to  say  that  in  the  case  of  corporations  engaged  in  speculative 
enterprises  it  is  a  matter  of  common  knowledge  that  shares  are  to 
be  paid  for  in  property  appraised  at  its  potential  rather  than  its 
present  intrinsic  value,  and  that  therefore  the  rule  stated  above 
should  obtain,  even  in  the  absence  of  actual  knowledge  on  the  part 
of  creditors  as  to  the  manner  in  which  the  capital  stock  of  the 
corporation  had  been  issued.  Again,  where  stock  has  been  paid  for 
by  the  conveyance  of  property  to  a  corporation  of  the  character 
known  as  "  speculative  "  and  upon  which  a  valuation  has  been 
placed,  —  not  its  present  intrinsic  value,  but  rather  its  prospective 
value  after  development  thereof,  —  then  in  such  cases  the  courts 
should  presume  that  the  valuation  was  honestly  made  and  place  the 
burden  upon  the  creditor  of  attacking  the  transfer.3 

The  ordinary  practice,  as  has  been  observed,  is  for  corporations 
engaged  in  non-speculative  enterprises  to  issue  stock  for  property 
which  has  a  well-recognized  market  value  or  one  which  can  be 
easily  ascertained.  In  regard  to  such  corporations,  where  the  nature 
and  condition  of  its  property  is  such  that  its  value  is  well  known  or 
understood  or  is  capable  of  being  readily  estimated  and  ascertained, 
and  the  same  is  transferred  to  the  corporation  at  a  gross  over- 
valuation for  paid  up  shares,  it  would  unquestionably  be  proper 

i  N.   II.    II.  N.   Co.  v.  Company,   142  8   So.   496;   Coleman   v.    Howe,    154    111. 

Mass.  349,  7  N.  E.  773.  458  ;  39  N.  E.  725 ;  Carr  v.  Le  F<\  re,  l'7 

2  Callanan  v.  Windsor,  78  la.  193;  Pa.  St.  489;  Shield  w.  Company,  94  Tenn. 
42  N.  W.  652.  123  ;  28  S.  W.  668. 

3  Davis   v.    Company,    101    Ala.    127; 

L35 


§  106    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

for  courts  to  treat  such  transactions  as  presumptively  fraudulent, 
and  to  place  the  burden  of  proof  upon  the  stockholders  in  such 
cases  to  rebut  such  presumption  by  clear  and  satisfactory  proof. 
On  the  other  hand,  where  the  corporation  is  engaged  in  specula- 
tive enterprises  of  the  character  above  referred  to,  and  stock  is 
issued  against  property  accepted  by  the  corporation  at  a  valuation 
not  based  upon  the  present  intrinsic  value  of  the  same,  but  avow- 
edly (as  is  the  universal  custom)  at  its  potential  speculative  value 
(to  be  determined  after  development  thereof  by  the  corporation 
which  has  acquired  the  property),  then  the  practical  attitude  for 
the  courts  to  take  in  such  cases  would  be  to  adopt  what  is  termed 
here  the  "  speculative  value  rule,"  and  to  attach  to  the  valuation 
placed  by  the  corporation  upon  such  property  the  presumption 
that  it  was  honestly  made,  and  place  the  burden  of  proof  in  such 
cases  upon  the  creditor  attacking  the  transaction.  In  practical 
operation  it  will  be  found  that  the  shifting  of  the  burden  of  proof 
would  be  equivalent  in  nearly  all  cases  to  making  the  valuation 
placed  upon  the  property  in  any  case,  whether  speculative  or  non- 
speculative  in  character,  conclusive  respectively  upon  the  stock- 
holders and  the  creditors.  The  reason  of  this  is  that  in  the  case  of 
non-speculative  properties  it  is  easy  to  demonstrate  that  the  same 
has  been  grossly  overvalued;  as,  for  example, by  showing  the  market 
value  of  the  same.  Again,  in  the  case  of  speculative  enterprises 
the  same  is  true  for  the  reason  that  the  valuation  placed  upon  the 
properties  from  a  speculative  standpoint,  if  honest  and  fair,  would 
be  such  as  to  render  it  practically  impossible  as  a  matter  of  proof 
to  show  that  such  valuation  was  fraudulent  or  grossly  overvalued, 
—  this  for  the  reason  that  in  every  such  case  it  will  be  found  that 
there  exists  an  immense  margin  for  honest  difference  of  opinion, 
and  although  it  may  appear  that  there  were  serious  errors  of  judg- 
ment, nevertheless  it  will  be  found  in  practice  that  such  valu- 
ations should  not  and  will  not  be  set  aside  except  for  actual  fraud. 

It  is  the  recognition  of  the  necessity  of  shifting  the  burden  of 
proof  according  to  whether  the  property  against  which  stock  is 
issued  is  speculative  in  character  or  not,  which,  in  connection 
with  the  basis  of  appraisal  already  referred  to,  affords  a  practical 
basis  for  the  operation  of  the  speculative  value  rule.  Finally,  the 
following  may  be  said  : 

Upon  principle  and  in  the  interest  of  justice  both  to  the  stock- 
holders and  creditors  alike,  in  determining  the  question  whether 
136 


CHAP.  IV.]       ISSUANCE   AND    PAYMENT   OF   CAPITAL   STOCK.  §  107 

stock  has  been  in  fact  fully  paid,  the  line  should  be  drawn  with 
the  utmost  clearness  and  distinctness  between  ordinary  corpora- 
tions such  as  trading,  mercantile,  banking,  insurance,  etc.,  whose 
capital  stock  is  formally  subscribed  for  and  ordinarily  paid  in  in 
cash  or  in  real  and  personal  property  having  a  well-recognized  or 
easily  established  market  value  on  the  one  hand,  and  those  cor- 
porations on  the  other  hand  incorporated  for  the  express  and 
avowed  purpose  of  engaging  in  speculative  enterprises  —  such,  for 
example,  as  corporations  organized  to  take  over  mining  properties, 
oil  and  gas  lands,  patent  and  patent  rights,  secret  processes,  con- 
cessions, franchises,  etc.  In  this  era  of  speculative  enterprises 
the  courts  can  no  longer  remain  blind  to  the  fact  that  the  stock  of 
such  corporations  is  not  intended  by  the  incorporators  or  under- 
stood by  the  creditors  or  the  public  generally  to  represent  any- 
thing but  certain  property  having  a  speculative  value,  which  may 
or  may  not  ultimately  prove  to  be  worth  the  par  value  of  the  stock 
ao-ainst  which  the  latter  has  been  issued.  The  credit  obtained  by 
such  corporations  concerning  which  the  courts  have  in  the  past 
displayed  such  intense  solicitude  in  the  interest  of  creditors  to  the 
exclusion  of  the  interests  of  equally  meritorious  stockholders,  is 
seldom,  if  ever,  extended  to  the  corporation  without  full  knowl- 
edge on  the  part  of  creditors  as  to  the  nature  of  the  assets  of  the 
corporation,  or  as  to  the  manner  in  which  the  stock  has  been 
issued  in  exchange  for  property  of  a  speculative  value. 

§  107.  Effect  of  Appraisal  of  Property  by  Directors  under  Stat- 
utory Authority,  when  taken  in  Exchange  for  Stock. — The  incor- 
poration acts  of  Connecticut,  Delaware,  Maine,  Montana,  New 
Jersey,  New  York,  North  Carolina,  South  Carolina,  Virginia,  and 
West  Virginia  all  contain  provisions  relating  to  the  effect  of  ap- 
praisal of  property  by  directors  when  taken  by  the  corporation  in 
exchange  for  its  capital  stock.  The  provisions  of  the  New  Jersey 
act  may  be  given  as  an  example  of  such  legislation.  The  statute 
referred  to  reads  as  follows  :  ' 

"  Any  corporation  formed  under  this  act  may  purchase  mines, 
manufactories,  or  other  property  necessary  for  its  business  or  the 
stock  of  another  company  or  companies  owning  a  mine,  manufactory, 
or  producing  mijls  or  other  property  necessary  for  its  business,  and 
issue  stock  to  the  amount  of  the  value  thereof,  in  payment  therefor, 

i  Public  Laws  of  New  Jersey,  1896,  chap.  85,  §  49. 

L37 


§  107   INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

and  the  stock  so  issued  shall  be  full-paid  stock  and  not  liable  to  any- 
further  call,  nor  shall  the  holder  thereof  be  liable  for  any  further  pay- 
ments under  any  of  the  provisions  of  this  act,  and  in  the  absence  of 
actual  fraud  in  the  transaction  the  judgment  of  the  directors  as  to 
the  value  of  the  property  purchased  shall  be  conclusive." 

In  commenting  upon  the  foregoing  section  in  the  case  of  Donald 
v.  American  Smelting  &  Refining  Co.,1  the  court  spoke  as  follows : 

"  The  distinction  between  the  contemplated  issue  of  corporate  stock 
for  property  and  its  issue  for  money  lies  not  in  the  rule  for  valuation, 
but  in  the  fact  that  different  estimates  may  be  formed  of  the  value  of 
property.  When  such  differences  are  brought  before  judicial  tribunals, 
the  judgment  of  those  who  are  by  law  entrusted  with  the  power  of 
issuing  stock  to  the  amount  of  the  value  of  the  property,  and  upon 
whom  therefore  is  placed  the  first  duty  of  valuing  the  property,  may 
be  accorded  considerable  weight.  But  it  cannot  be  deemed  conclusive 
when  duly  subjected  to  judicial  scrutiny,  nor  is  it  necessary  that  con- 
scious over-valuation  or  any  form  of  fraudulent  conduct  on  the  part 
of  its  primary  valuers  should  be  shown  to  justify  judicial  interposi- 
tion. Their  honest  judgment,  if  reached  without  due  examination 
of  the  elements  of  value,  or  if  based  in  part  upon  an  estimate  of  mat- 
ters which  really  are  not  property,  or  if  plainly  weighed  by  self- 
interest,  may  lead  to  a  violation  of  the  statutory  rule  as  surely  as  would 
corrupt  motives.  The  original  issue  of  corporate  stock  is  a  special 
function  in  the  exercise  of  which  the  legislature  has  fixed  the  stand- 
ard to  be  observed,  and  it  is  the  duty  of  the  courts,  so  far  as  their 
jurisdiction  extends,  to  see  that  this  standard  is  not  violated  either 
intentionally  or  unintentionally.  When  corporate  stock  has  once 
been  issued  for  property  purchased,  then  the  legislature  has  directed 
the  application  of  a  different  rule.  In  the  words  of  the  statute,  '  the 
stock  so  issued  shall  be  full-paid  stock,  and  not  liable  to  any  further 
call,  neither  shall  the  holder  thereof  be  liable  for  any  further  payment 
under  the  provisions  of  this  act  ;  and  in  the  absence  of  actual  fraud 
in  the  transaction  the  judgment  of  the  directors  as  to  the  value  of  the 
property  purchased  shall  be  conclusive.  Under  these  provisions,  after 
the  property  has  been  purchased  and  the  stock  issued  therefor,  noth- 
ing short  of  actual  fraud  in  the  transaction  can  impair  the  right  of  the 
holder  to  hold  his  stock  as  full-paid  stock,  free  from  further  call.'  "  2 

i  61  N.  J.  Eq.  458 ;  48  Atl.  786.  45    W.   Va.  134  ;  30  S.  E.  92 ;   Clark  v. 

2  See  also  Wetherbee  v.  Baker,  35  N.  J.  Bever,  139  U.  S.  96  ;  11  S.  Ct.  468  ;  Fogg 

Eq.  501;  Bank  v.  Lumber  Co.,  32  W.  Va.  v.   Blair,   139  U.  S.  118;  11  S.  Ct.  496; 

-357  ;  9  S.  E.  243 ;  Riehardson  v.  Graham,  Liebke  v.  Knapp,  79  Mo.  22. 

138 


CHAP.  IV.]     ISSUANCE   AND   PAYMENT   OP   CAPITAL   STOCK.  §  108 

§  108.  Effect  of  Appraisal  of  Value  of  Property  by  State  Officials 
when  the  same  is  taken  by  Corporations  in  Exchange  for  their 
Capital  Stock.  —  Owing  to  the  coniiicting  decisions  of  the  courts 
of  the  various  States  relative  to  what  does  and  what  does  not  con- 
stitute as  against  creditors  full  payment  of  the  capital  stock  of  a 
corporation,  attempts  have  been  made  by  the  legislatures  of 
a  number  of  the  States  to  remedy  this  situation  by  means  of  stat- 
utory enactments.  Such  legislative  enactments  may  be  said  to  be 
indicative  of  the  public  policy  of  the  State  in  that  regard.  The 
■"  public  policy  of  the  State,"  as  the  term  is  used  in  this  connec- 
tion, frequently  varies  from  time  to  time.  In  the  absence  of 
-express  statutes  of  the  character  here  referred  to,  it  has  been  said 
that  it  is  not  to  be  measured  by  the  private  combinations  or  notions 
of  the  persons  who  happen  to  be  exercising  judicial  functions,  but 
by  reference  to  the  enactments  of  the  law-making  power,  and  in 
the  absence  of  them  to  the  decisions  of  the  courts.  When,  how- 
ever, the  legislature  has  spoken  on  a  particular  subject  and  within 
the  limits  of  its  special  powers,  its  utterance  then  becomes  the 
public  policy  of  the  State.1  In  view  of  the  fact  that  the  near 
future  is  likely  to  see  many  attempts  by  other  legislatures  to 
solve  the  question  here  referred  to  by  the  enactment  of  statutes 
governing  the  same,  the  matter  now  under  consideration  should 
receive  careful  attention. 

It  is  a  fair  supposition  to  say  that  the  passage  of  such  acts  in 
this  country  originated  doubtless  in  a  desire  to  transfer  to  this 
country  certain  sections  of  what  is  known  as  the  "  English  Com- 
pany's Act  of  1867."  Under  the  act  just  referred  to,  corporations 
which  desired  to  accept  property  in  exchange  for  their  capital 
stock  were  required  to  register  in  a  designated  government  office 
a  description  of  the  property  against  which  any  particular  cor- 
poration proposed  to  issue  its  full-paid  shares.  The  construction 
by  the  English  courts  put  upon  this  section  of  the  English  Com- 
pany's Act  does  not  seem  to  give  to  the  legislative  provision 
referred  to  the  full  effect  which  is  claimed  for  such  statutes  in  this 
country.  In  substance  the  holding  of  the  English  courts  in 
this  regard  is  as  follows : 

That  where  the  property  is  so  registered  under  the  act  it  is  not 
unlawful  for  the  vendor  to  sell  such  property  to  the  corporation  in 

1  See  MacGinniss  v.  Company  (Mont),  75  Pac.  89;  United  Statas  v.  Association, 
166  U.  S.  290;  17  S.  Ct.  540. 

139 


§108   INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

exchange  for  stock  having  a  par  value  in  excess  of  what  the  vendor 
paid  for  the  property.  That  ordinarily  the  court  will  not  in  the 
interests  of  stockholders  or  creditors  go  behind  the  contract  and 
inquire  whether  the  consideration  represents  the  full  value  against 
which  the  shares  are  issued  unless  the  contract  itself  is  impeached 
or  the  consideration  on  the  face  thereof  appears  to  be  insufficient 
or  elusory.1 

Turning  now  to  the  statutory  enactments  in  this  country  of  the 
same  character,  they  may  be  explained  as  follows  :  In  Florida 
the  incorporation  act  there  in  force  provides  that  incorporators 
may  provide  in  the  charter  that  the  capital  stock,  either  in  whole 
or  in  part,  shall  be  payable  in  property,  labor,  or  services,  at  a 
valuation  fixed  in  the  charter.  The  latter  must  also  contain 
a  general  description  of  the  property  to  be  taken  in  exchange  for 
stock.  In  Utah  the  statute  is  very  similar  to  the  one  in  force  in 
Florida.  In  Massachusetts  the  articles  of  organization  must  set 
forth  the  amount  of  capital  stock  to  be  issued,  the  amount  thereof 
to  be  paid  for  in  cash,  and  the  amount  thereof  to  be  paid  for  in 
property.  If  such  property  consists  of  real  estate,  its  location  and 
the  amount  of  stock  to  be  issued  therefor  must  be  stated.  If  any 
part  of  such  property  is  personal,  it  must  be  described  in  de- 
tail. The  whole  matter  is  then  submitted  to  and  passed  upon 
by  the  commissioners  of  corporations.  But  the  statute  makes  no 
provision  relative  to  what  the  legal  effect  thereof  shall  be  as  to 
creditors  where  the  issuance  of  stock  in  exchange  for  property  i& 
approved  by  the  commissioners  of  corporations. 

Unquestionably  the  most  effective  statute  in  existence  is  to  be 
found  in  the  Michigan  act,2  which  in  prescribing  the  requisites  of 
articles  of  incorporation  reads  in  part  as  follows :  "  The  amount 
of  capital  paid  in  at  the  time  of  executing  the  articles,  which 
shall  not  be  less  than  ten  per  cent  of  the  authorized  capital,  etc. 
Such  capital  stock  may  be  paid  in  either  cash  or  in  other  property  r 
real  or  personal  ;  but  where  payment  is  made  otherwise  than  in 
cash  there  shall  be  included  in  the  articles  an  itemized  descrip- 
tion of  the  property  in  which  such  payment  is  made,  with  the 
valuation  for  which  such  item  is  taken,  which  valuation  shall  be 
conclusive  in  the  absence  of  actual  fraud." 

i  In   re  Wragg,  L.  R.   1    Chan.   796;  2  Session  Laws  of  1903,  §  232. 

Ooregum  Gold  Min.  Co.  v.  Ropes,  61  L.  J. 
Chau.  337. 

1-10 


CHAP.  TV.]      ISSUANCE    AND    PAYMENT    OF    CAPITAL    STOCK.  §   109 

The  intent  of  the  legislature  would  clearly  appear  to  be  to 
■establish  conclusively  that  the  property  received  and  accepted  by 
the  corporation  under  the  authority  of  the  State  in  exchange  for 
its  stock  constituted  a  fair  equivalent  of  the  amount  of  stock  so 
■given.  It  would  seem  to  forbid  all  claim  of  fraud  thereafter  to  be 
made,  and  to  establish  the  valuation  as  conclusive  upon  both  stock- 
holders and  creditors.1 

§  100.  Meaning  of  Non-Assessable  Stock.  —  In  entering  upon 
the  subject  of  non-assessable  stock  as  contrasted  with  full-paid 
stock  the  discussion  of  the  former  will  be  confined  to  ques- 
tions arising  between  the  corporation  and  its  stockholders,  while 
the  latter  will  be  discussed  from  the  standpoint  of  the  stock- 
holder in  his  relation  to  creditors.  It  is  unquestionably  within 
the  power  of  a  corporation  to  agree  with  stockholders  that  stock 
shall  be  issued  to  them  at  less  than  par,  and  that  when  so  issued 
shall  not  be  subject  to  any  further  assessments  on  the  part  of  the 
•corporation.2 

In  West  Virginia,  Nevada,  Wyoming,  and  other  States  this 
principle  has  found  recognition  in  the  incorporation  acts  in  force 
in  those  Commonwealths.  The  West  Virginia  act  will  serve  as 
a  fair  example.  The  law  there  provides  in  substance  as  follows  : 
that  upon  the  vote  of  three-fourths  of  the  stockholders  corporate 
stock  may  be  sold  or  disposed  of  at  less  than  par.  The  act  then 
goes  on  to  provide  that  nothing  therein  contained  shall  be  con- 
strued as  to  prevent  any  mining  or  manufacturing  company  from 
issuing  stock  and  negotiating  the  sale  of  the  same  in  payment  of 
real  and  personal  estate  for  the  use  of  the  corporation  at  such  price 
and  upon  such  terms  and  conditions  as  may  be  agreed  upon  by  the 
owners  and  directors  or  stockholders  of  the  corporation,  and  any 
subscriber  to  the  capital  stock  of  any  such  corporation  may  pay 
for  the  same  by  the  transfer  and  conveyance  to  such  corporation 
of  real  or  personal  property  upon  such  terms  as  may  be  mutually 
agreed  upon.  All  stock  so  issued  shall  be  full  paid  and  not  liable 
to  any  further  call  or  assessment. 

Such  a  statute  as  is  here  referred  to  unquestionably  has  the  effect 
of  making  the  stock  non-assessable  as  between  the  corporation 
and  the  subscribers  to  its  capital  stock,  but  it  clearly  has  not  the 
effect  of  preventing  subsequent  creditors  in  case  of  insolvency 

1  See  State  v.  Webb  et  «/.,  110  Ala.  a  Esgen  V.  Smith,  113  la.  25 ;  84  N.  W. 
214;  20  So.  462.  954. 

141 


§  110    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

compelling  the  payment  of  any  unpaid  balance  on  such  stock.1 
On  this  subject  Judge  Showalter,  in  Northern  Trust  Co.  v.  Colum- 
bia Straw  Paper  Co.,2  spoke  as  follows  : 

11  Whatever  may  have  been  in  fact  the  value  of  the  property 
turned  over  to  the  company  for  its  stock,  the  latter  agreed  to  take 
it  for  the  stock.  The  persons  interested  were  the  stockholders,  and 
there  was  no  dissent  on  the  part  of  any  person  in  what  was  done. 
Neither  any  person  then  holding  stock,  nor  any  person  who  afterwards 
became  a  stockholder  by  assignment  from  one  who  then  held  the  stock, 
can  now  make  complaint  on  behalf  of  the  corporation  against  the  law- 
fulness of  that  transaction.  This  I  take  to  be  the  settled  law  on  that 
subject." 

In  the  absence  of  statutory  authority  conferred  upon  the  corpo- 
ration or  in  the  absence  of  unanimous  consent  of  all  the  stock- 
holders, it  is  clear  that  the  directors  of  a  corporation  have  no 
power  to  assess  shares  which  have  been  fully  paid  up.3 

§  110.  Meaning  of  Full-Paid  Stock.  — The  term  "  full-paid  stock  " 
as  here  used  may  be  defined  to  be  stock  whose  par  value  has  been 
paid  either  in  cash  or  in  property,  the  ownership  of  which  does 
not  subject  the  holder  thereof  to  any  further  liability  either  to 
the  corporation  or  to  the  creditors.  The  mere  declaration  that 
stock  is  full  paid,  either  by  resolution  or  by  stamping  upon 
the  stock  this  statement,  does  not  make  it  so,  at  least  as  to 
creditors.4 

It  has  already  been  said  that  stock  may  be  issued  for  less  than 
its  par  value  to  subscribers  as  full  paid  and  non-assessable  and  be 
binding  as  between  the  corporation  and  the  stockholders.5  Where 
statutes  exist  declaring  that  stock  issued  in  a  particular  manner 
shall  be  full  paid  and  non-assessable,  they  are  merely  to  be  con- 
strued to  the  effect  that  stock  may  be  issued  in  this  manner,  and 
that  the  holders  thereof  shall  not  be  held  liable  to  further  calls  or 
assessments  on  the  part  of  the  corporation,  but  such  immunity 

i  The  Wyoming  statute  would  appear  Pacific  Fruit  Co.  v.  Coon,  107  Cal.  447; 

to  be  materially  different  from  the  West  40  Pac.  542. 
Virginia  and  Nevada  acts.  i  Upton  v.  Triblecock,  91  U.  S.  345 ;  23. 

a  75  Fed.  936.  L.  E.  203;  F.  N.  Bank  v.  Company,  42. 

3  Wells  v.  Company,  90  Wis.  442  ;  64  Minn.  327 ;  44  N.  W.  198 ;  National  Tube 

N".  W.  69  ;  Ventura,  etc.  Ry.  Co.  v.  Hart-  Works   v.   Gilfillan,    124   N.    Y.   302 ;  2& 

man,  116  Cal.  260;  48  Pac.  65;  Handley  N.  E.  538  ;  Kroenert  v.  Johnston,  19  Wash. 

v.  Stutz,  39  U.  S.  417 ;  11  S.  Ct.  530  ;  Gary  96  ;  25  Pac.  605. 
v.  Company,  9  Utah,  464  ;  35  Pac.  494  ;         5  See  Scoville  v.  Thayer,  105  U.  S.  143. 

142 


CHAP.  IV.]      ISSUANCE   AND    PAYMENT   OF   CAPITAL   STOCK.  §  11(/ 

will  not  be  extended  in  such  suit  so  as  to  prevent  subsequent 
creditors  enforcing  their  claims  for  the  payment  of  the  unpaid 
residue.1  Many  of  the  States  have  statutory  provisions  to  the 
effect  that  no  corporation  shall  issue  stock  except  for  money  paid, 
labor  done,  or  property  actually  received,  declaring  all  fictitious 
increase  of  stock  to  be  void.  Under  such  provisions  an  original 
issue  of  stock  as  fully  paid  at  less  than  par  will  be  held  to  be 
void.2 

Many  cases  will  be  found  bearing  upon  the  question  as  to  the 
validity  of  so-called  "  bonus  "  or  "  promotion  stock."  In  regard  to 
the  validity  of  such  stock  the  courts  differ.  One  line  of  decisions 
is  represented  by  the  courts  of  New  York  and  Massachusetts.  In 
Christensen  v.  Eno3  the  New  York  Court  of  Appeals  spoke  as 
follows : 

"  It  may  be  admitted  that  the  liability  of  subscribers  on  unpaid 
stock  subscriptions  constitutes  an  asset  of  the  corporation  which  can- 
not be  given  up  by  the  corporation  without  consideration  on  the  part 
of  creditors.  The  unissued  shares  of  a  corporation  are  not  assets. 
When  issued,  they  represent  the  proportionate  interest  of  the  share- 
holders in  the  corporate  property,  —  an  interest,  however,  subordinate 
to  the  claims  of  creditors.  There  are  unquestionably  public  evils 
growing  out  of  the  creation  and  multiplication  of  shares  of  stock  in 
corporations  not  based  upon  corporate  property.  The  remedy  is  with 
the  legislature.  But  the  liability  of  a  shareholder  to  pay  for  the 
stock  does  not  arise  out  of  his  relation,  but  depends  upon  his  con- 
tract, express  or  implied,  or  upon  some  statute,  and  in  the  absence  of 
either  of  these  grounds  of  liability,  we  do  not  perceive  how  a  person 
to  whom  shares  have  been  issued  as  a  gratuity  has  by  accepting  them 
committed  any  wrong  upon  the  creditors  or  made  himself  liable  to 
pay  the  nominal  face  of  the  shares  as  upon  his  subscription  or 
contract." 4 

On  the  other  hand,  courts  of  almost  equal  authority  have  refused 
to  treat  such  stock  in  the  interest  of  creditors  as  full  paid  and  non- 
assessable, and  have  enforced  in  their  favor  an  alleged  stockholders' 

1  Vt.  Marble  Co.  o.  Company,  1.35  Cal.  Cal.  624;  37  Pac.  0.3 8 ;  Kellerman  v. 
579  ;  67  Pac.  1057.  Maier,  116  Cal.  46;  48  Pac.  .377  ;  Garrett 

2  Williams  v.  Evans,  87  Ala.  725;  6  v.  Company,  11.3  Mo.  330;  20  S.  W. 
So.  702;  Perry  v.  Mill  Co.,  98  Ala.  364;  965. 

9  So.  217  ;  Heitman  v.  Steiner,  98  Ala.  3  106  N.  Y.  97  ;  12  N.  E.  648. 

241  ;  13  So.  87;  Stein  v.  Howard,  65  Cal.  «  Same    rule  in  N.    EL    I'.   X.   Co.    v. 

616;  4  Pac.  662;  Jefferson  v.  Hewitt,  103     Company,  142  Mass.  349;  V  i\r.  B.  77.3. 

143 


§110    INCORPORATION  AND   ORGANIZATION  OP  CORPORATIONS.    [PARTI. 

liability  thereon.1  It  has  been  held,  however,  that  even  though  a 
stockholder  has  paid  nothing  for  his  stock,  he  is  entitled  to  vote 
the  same.2 

1  See  Peninsula  Savings  Bank  v.  Com-  N.  W.  894  ;  Scoville  v.  Thayer,  105  U.  S. 

pany,    105    Mich.    535;    63   N.    W.   514;  143;  Garrett  v.  Company,  113  Mo.  330; 

Handley  v.  Stutz,   139  U.   S.  417;  11    S.  20  S.  W.  965. 

Ct.   530;    De   La   Vergne   Refrigerating  2  Cartwright  v.   Dickinson,    88  Tenn. 

Machine  Co.  v.  German  Savings  Institu-  476;  12   S.    W.    1030;  W.   E.  L.   Co.   v. 

tion,  175  U.  S.  40;  20  S.  Ct.  20;  44  L.  E.  Landy,  66  Vt.  248;  29  Atl.  248;  see  also 

65;  Rogers  v.  Gross,   67  Minn.   224;   69  Busey  v.  Hooper,  35  Md.  15. 


144 


CHAP.  V.]    LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  112 


CHAPTER   V. 

LEGISLATIVE   CONTROL   OVER  DOMESTIC   CORPORATIONS. 

§  111.  Statement  of  Principal  Methods  by  which  Legislative 
Control  over  Domestic  Corporations  is  obtained.  —  Under  our 
modern  system  legislative  control  over  domestic  corporations 
ordinarily  takes  the  following  forms,  to  wit :  (1)  control  over 
amendment  of  corporate  charters ;  (2)  reservation  on  the  part 
of  the  State  of  the  right  to  repeal  all  charters ;  (3)  control 
over  dissolution  of  corporations ;  (4)  by  the  exercise  through 
State  officials  of  the  right  to  forfeit  charters  by  means  of  quo 
warranto  proceedings ;  (5)  by  means  of  the  exercise  of  the 
police  power;  (6)  through  legislative  investigation  into  corpo- 
rate   affairs ;    (7)  by  requiring  annual   reports  of   corporations ; 

(8)  by  compelling  corporations  to  permit  inspection  of  their 
books  and  records  for  the  benefit  of  stockholders  and  creditors ; 

(9)  by  means  of  anti-trust  legislation ;  (10)  by  the  enactment  of 
statutes  regulating  the  internal  affairs  of  the  corporation  ;  (11)  by 
the  imposition  of  liability  upon  stockholders  for  corporate  debts 
over  and  beyond  their  liability  for  unpaid  stock  subscriptions ; 
(12)  enactment  of  statutes  imposing  liability  upon  directors  for 
misfeasance  or  non-feasance  in  office ;  (13)  by  means  of  legisla- 
tive control  over  the  extension  of  corporate  existence;  (14)  by 
the  exercise  of  the  right  of  taxation  upon  corporations  ;  (15)  by 
regulating  the  right  of  consolidation  of  corporations. 

§112.  Amendment  of  Charters.  —  A  glance  at  the  general 
business  acts  in  force  in  the  several  States  and  Territories  will 
serve  to  show  that  in  all  of  them  more  or  less  attention  has  hem 
paid  by  the  legislatures  to  the  question  of  the  right  to  amend  — 
with  more  or  less  freedom  —  articles  of  incorporation.  In  a  ma- 
jority of  these  the  power  of  amendment  will  be  found  to  he  prac- 
tically unlimited.  In  nine  the  limitations  imposed  are  not  wide  in 
scope,  while  in  eleven  the  power  referred  to  may  be  characterized 
10  145 


§  112    INCORPORATION  AND  ORGANIZATION  OP  CORPORATIONS.    [PART  I. 

as  being  very  narrow  in  its  practical  operation.1  The  practical 
questions  to  be  considered  in  this  immediate  connection  have 
reference,  first,  to  ascertaining  in  what  body  the  legislatures  have 
seen  fit  to  place  the  power  of  amendment,  and,  secondly,  an  inquiry 
whether  the  power  when  granted,  apparently  in  the  broadest 
terms,  is  in  legal  effect  without  any  limitations  whatsoever. 

As  a  general  rule,  the  directors  have  no  power  to  amend  charters 
unless  such  right  is  expressly  conferred  upon  them  by  statute. 
Power  to  amend  resides  exclusively  in  the  stockholders.2  Turn- 
ing now  to  the  second  inquiry  referred  to  above,  the  following  may 
be  said.  With  respect  to  the  right  on  the  part  of  majority  stock- 
holders to  exercise  the  power  of  amendment,  there  are  two  prac- 
tical views  of  the  question  which  deserve  consideration.  The  first 
has  reference  to  the  effect,  if  any,  the  exercise  of  such  right  may 
have  upon  the  right  of  the  corporation  to  enforce  stock  subscrip- 
tions which  were  made  in  reliance  upon  the  corporate  purposes 
set  forth  in  the  original  charter.  The  other  relates  to  the 
binding  effect  of  such  amendments,  when  had,  upon  dissenting 
minority  stockholders  who  have  previously  paid  up  their  stock 
subscriptions. 

In  the  first  case  it  appears  to  be  the  generally  accepted  view 
that  when  a  party  makes  a  subscription  to  the  capital  stock  of  a 
corporation  he  does  it  in  reliance  upon  the  implied  understanding 
that  no  changes  shall  be  made  in  the  charter  without  his  consent 
which  produce  material  and  fundamental  changes  therein.3  The 
rule  however  can  clearly  not  apply  where  the  changes  made  were 
trifling  or  immaterial  or  were  in  furtherance  of  the  original  objects 
of  the  corporation.4  There  is  a  well-defined  tendency  at  the 
present  time  on  the  part  of  many  courts  to  take  the  view  that  in 
order  that  a  subscriber  to  the  capital  stock  may  escape  liability 
on  his  subscription  on  the  ground  that  there  has  been  a  material 
amendment  to  the  charter  since  his  subscription  was  made,  that 

1  See  Part  II.,  Synopsis-Digest  of  the  133  ;  Abbott  v.  Company,  33  Barb.  (N.  Y.> 
Corporation  Acts  of  the  Several   States,     583. 

under  the  head  "  Amendments."  3  Mowrey  v.  Company,  4  Bissell  (U.  S.), 

2  Gill  v.  Bayless,  72  Mo.  424;  Ky.  Co.  78;  Printing  House  v.  Trustees,  104  U.  S. 
v.  Allerton,  18  Wall.  U.  S.  233 ;  Olleshei-     711. 

mer  v.  Mfg.  Co.,  44  Mo.  Ap.  172 ;  Clough  4  Fry's  Executors  v.  Company,  2  Met- 

v.  Company,  25  Col.  520;  55  Pac.  809;  calf  (Ky.),  322;  Peoria  v.  Preston,  35  la. 
State  v.  Oftedal,  72  Minn.  488;  75  N.  W.  115  Milford,  etc.  Turnpike  Co.  v.  Brush, 
692 ;  Commonwealth  v.  Cullen,  13  Pa.  St.     10   0.    St.    Ill;   Durfee   v.  Company,   5- 

Allen  (Mass.),  230. 

146 


CHAP.  V.]   LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  112 

such  amendment  must  necessarily  have  brought  about  changes 
of  the  most  radical  and  fundamental  character.1 

Turning  now  to  the  second  question  here  referred  to,  the  fol- 
lowing may  be  said.  Important  questions  frequently  arise  as  to 
the  right  of  majority  stockholders  to  amend  the  charter  of  the 
corporation  against  the  dissent  of  minority  stockholders  so  as 
practically  to  create  an  entirely  new  corporation  with  purposes 
and  powers  wholly  different  from  those  conferred  in  the  original 
charter. 

Before  the  passage  of  the  modern  liberal  amendment  acts, 
specifically  authorizing  majority  stockholders  to  change  ad  libitum 
corporate  purposes  and  powers,  the  rule  undoubtedly  was  that 
majority  stockholders  had  no  power  to  depart,  under  the  guise  of 
an  amendment  to  the  charter,  from  the  objects  for  the  accom- 
plishment of  which  the  corporation  was  created.  At  that  time 
majority  stockholders  would  be  enjoined  on  the  application  of 
minority  stockholders  from  making  fundamental  and  radical 
changes  in  the  original  corporate  purposes,  which  had  the  effect 
of  practically  creating  a  new  corporation,  with  power  to  engage 
in  lines  of  business  wholly  foreign  to  that  set  forth  in  the  original 
charter.2  But  whatever  the  rule  may  have  been  in  times  past, 
changed  conditions  have  brought  about  material  modifications 
therein. 

Owing  to  the  recent  statutory  enactments  in  the  great  majority 
of  the  Commonwealths  relative  to  amendment  of  charters,  it  may 
be  said  that  this  question  has  ceased  to  be  one  of  great  practical 
importance  at  the  present  time,  however  it  may  have  been  in  the 
past.  In  view  of  these  statutory  provisions  it  may  be  said  that  as 
a  general  rule  the  extent  of  the  power  of  amendment  when  exercised 
by  a  majority  of  the  stockholders  according  to  the  statute  in  such 
case  made  and  provided,  depends  entirely  upon  the  terms  of  such 
statute  and  the  construction  given  by  the  courts  thereto.3    If  broad 

1  Banet  v.  Company,  13  111.  504 ;  Pa-  Natusch  v.  Irving,  1  Smith's  Cases,  226 ; 
cific  Ry.  Co.  v.  Renshaw,  18  Mo.  210;  Union  LockB  and  Canals  v. Towne,  1  N.  H. 
Spragu'e  v.  Company,  19  111.  174;  Irvine  44;  Ashton  v.  Burbank,  2  Dill.  435;  Fed. 
v.  Turnpike  Co.,  2  Pen.  &  W.  (Pa.)  466;  Cases  No.  582;  H.  &  N.  II.  Ky.  Co.  v. 
Cross  v.  Company,  90  Pa.  St.  392;  Troy,  Croswell,  5  Hill  (N.  Y.),  383. 

etc.  Ry.   Co.    t;. 'Kerr,    17  Barb.  (N.  Y.)  8  Day    v.   Company,   75   la.    694;    38 

607;  Worcester   v.  Company,  109    Mass.  N.  W.   113;   GoMer  t>.   Bressler,   105  111. 

103;  Del.   Ry.   Co.   v.  Tharp,    1    Houst.  419;  Spriggw.  Company,  46  Md.  67;  Hope 

(Del.)  149.  Mutual    Fire     Ins.    Co.    v.    Beckman,    47 

2  Zabriskie  v.  Company,  18  N.  J.  Eq.  Mo.  93;  Detroit  Chamber  of  Commerce  v. 
178;    Stevens  v.  Company,  29    Vt.    545;  Secretary    of   State,    109    Mich.    691;    67 

147 


§  112    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

in  scope,  they  unquestionably  permit  majority  stockholders  to 
bring  about  radical  and  even  fundamental  changes  in  corporate 
purposes  and  powers  if  they  so  desire. 

The  question  here  presented  is  one  of  so  much  practical  im- 
portance that  it  deserves  more  attention  than  has  been  yet  given 
it.  The  New  York  Court  of  Appeals  in  Buffalo  &  New  York  City 
Railroad  Co.  v.  Dudley1  laid  the  foundation  for  the  establishment 
in  that  State  of  the  present  just  rule  that  there  obtains  with 
reference  to  the  right  of  majority  stockholders  to  materially 
change  the  corporate  purposes  against  the  dissent  of  minority 
stockholders.  In  that  case  the  court  permitted  a  change  of  name 
and  an  extension  of  the  line  of  the  railway  by  means  of  an  amend- 
ment to  the  original  charter.  In  passing  upon  this  point  the 
court  spoke  as  follows  : 

"  The  stock  subscription  having  been  valid  so  as  to  give  a  right 
of  action  in  case  of  non-payment  to  the  corporation,  did  the  altera- 
tion of  the  charter  and  the  extension  of  the  road  subsequently  absolve 
the  defendant  from  his  liability  upon  such  subscription  ?  The  right 
to  alter  was  reserved  in  the  charter,  and  the  subscription  must  be 
taken  to  have  been  made  subject  to  having  such  additional  powers 
conferred  as  the  legislature  might  deem  essential  and  expedient. 
The  change  is  not  fundamental.  The  new  powers  conferred  are 
identical  in  kind  with  those  originally  given.  They  are  enlarged 
merely,  the  general  objects  and  purposes  of  the  corporation  remain- 
ing still  the  same.  It  may  be  admitted  that  under  this  reserved 
power  to  alter  and  repeal  the  legislature  would  have  no  right  to 
change  the  fundamental  character  of  the  corporation  and  convert  it 
into  a  different  legal  being,  for  instance,  a  banking  corporation, 
without  absolving  those  who  did  not  choose  to  be  bound.  But  this 
they  have  not  attempted  to  do.  The  additional  powers  are  of  the 
•same  character  and  have  been  regularly  acquired  from  a  legitimate 
source  of  power,  and  if  they  had  been  fairly  exercised  the  defendant, 
although  the  change  may  have  operated  to  his  pecuniary  disadvan- 
tage, is  still  bound  by  his  undertaking.  The  whole  matter  is  mani- 
festly a  question  of  power;  and  if  the  power  was  legitimately 
acquired  and  has  been  exercised  without  fraud,  the  rights  of  the 
parties  are  in  no  respect  changed  as  between  themselves  whether 
the  alteration  is  beneficial  or  injurious  to  the  defendant's  interest. 

N.  W.  897;  Mercantile  Statement  Co.  People  v.  Green,  116  Mich.  505;  74  N.  W. 
v.  Kneal,  51    Minn.  263;  53  N.  W.  632;     714. 

l   14  N.  Y.  342. 

148 


CHAP.  V.]  LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.    §  112 

Whether  he  has  made  or  lost  by  the  change  in  no  respect  affects  the 
question  of  authority  iu  the  plaintiff." 

Many  years  later  this  same  court,  in  discussing  the  respective 
rights  of  majority  and  minority  stockholders  or  corporations,  spoke 
as  follows : 

"The  court  would  not  be  justified  in  interfering  even  in  doubtful 
cases,  where  the  action  of  the  majority  might  be  susceptible  of  dif- 
ferent constructions.  To  warrant  the  interposition  of  the  court  in 
favor  of  the  minority  shareholders  in  a  corporation  or  joint-stock 
association,  as  against  the  contemplated  action  of  the  majority,  where 
such  action  is  within  the  corporate  powers,  a  case  must  be  made  out 
which  plainly  shows  that  such  action  is  so  far  opposed  to  the  true 
interests  of  the  corporation  itself  as  to  lead  to  the  clear  inference 
that  no  one  thus  acting  could  have  been  influenced  by  any  honest 
desire  to  secure  such  interests,  but  that  he  must  have  acted  with  an 
intent  to  subserve  some  outside  purpose,  regardless  of  the  conse- 
quences to  the  Company  and  in  a  manner  inconsistent  with  its 
interests.  Otherwise  the  court  might  be  called  upon  to  balance  prob- 
abilities of  profitable  results  to  arise  from  the  carrying  out  of  the 
one  or  the  other  of  different  plans  proposed  by  or  on  behalf  of  the 
different  shareholders  in  a  corporation,  and  to  decree  the  adoption  of 
that  line  of  policy  which  seemed  to  it  to  promise  the  best  results,  or 
at  least  to  enjoin  the  carrying  out  of  the  opposite  policy.  This  is  no 
business  for  any  court  to  follow."  1 

It  is  difficult  to  find  a  better  presentation  of  the  more  modern 
and  better  view  taken  of  the  question  now  under  discussion  than 
that  to  be  found  in  the  opinion  of  the  Massachusetts  Supreme 
Court  in  Durfee  v.  Old  Colony  &  Fall  River  Railway  Company.2 
While  the  case  had  special  reference  to  the  right  of  a  State  legis- 
lature to  exercise  its  reserved  right  to  amend  corporate  charters 
so  as  to  produce  radical  changes  in  the  purposes  named  in  the 
original  charter,  nevertheless  the  reasoning  is  equally  applicable 
to  those  cases  where  majority  stockholders  attempt  equally  radical 
amendments  under  general  acts  permitting  such  stockholders  to 
amend  charters  on  their  own  initiative. 

"  We  suppose,"  said  Chief  Justice  Bigelow  in  the  case  referred 
to,  "  it  may  be  stated  as  an  indisputable  proposition,  that  every 


1  Gamble  v.  Company,  123  N.  Y.  91 ;  25  Allen,  230. 

25  N.  E.  201. 


149 


§  112   INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

person  who  becomes  a  member  of  a  corporation  aggregate  by  pur- 
chasing and  holding  shares  agrees  by  necessary  implication  that 
he  will  be  bound  by  all  acts  and  proceedings,  within  the  scope  of 
the  powers  and  authority  conferred  by  the  charter,  wrhich  shall 
be  adopted  or  sanctioned  by  a  vote  of  the  majority  of  the  corpora- 
tion, duly  taken  and  ascertained  according  to  law.  This  is  an 
unavoidable  result  of  the  fundamental  principle  that  the  majority 
of  the  stockholders  can  regulate  and  control  the  lawful  exer- 
cise of  the  powers  conferred  on  a  corporation  by  its  charter.  A 
holder  of  shares  in  an  incorporated  body,  so  far  as  his  indi- 
vidual rights  and  interests  may  be  involved  in  the  doings  of  the 
corporation,  acting  within  the  legitimate  sphere  of  its  corporate 
power,  has  no  other  legal  control  over  them  than  that  which  he 
can  exercise  by  his  single  vote  in  the  meetings  of  the  company. 
To  this  extent  he  has  parted  with  his  personal  right  or  privilege 
to  regulate  the  disposition  of  that  portion  of  his  property  which 
he  has  invested  in  the  capital  stock  of  the  corporation,  and  sur- 
rendered it  to  the  will  of  a  majority  of  his  fellow  corporators. 
The  jus  disponendi  is  vested  in  them  so  long  as  they  keep  within 
the  line  of  the  general  purpose  and  object  for  which  the  corpora- 
tion was  established,  although  their  action  may  be  against  the  will 
of  a  minority  however  large.  It  cannot,  therefore,  be  justly  said 
that  the  contract,  express  or  implied,  between  the  corporation 
and  the  stockholders  is  infringed  or  impaired  by  any  act  or  pro- 
ceeding of  the  former  which  is  authorized  by  a  majority,  and 
which  comes  within  the  terms  of  the  original  statute  creating  and 
establishing  their  franchise,  and  conferring  on  them  capacity  to 
exercise  control  over  the  rights  and  property  of  their  members. 
On  the  contrary,  the  fair  and  reasonable  implication  resulting 
from  the  legal  relation  of  the  stockholders  and  the  corporation  is, 
that  the  majority  may  do  any  act  either  coming  within  the  scope 
of  the  corporate  authority,  or  which  is  consistent  with  the  terms 
and  conditions  of  the  original  charter,  without  and  even  against 
the  consent  of  an  individual  member."  Again,  in  this  same  opinion 
the  court  observed  that,  "  in  creating  a  corporation,  no  contract 
is  made  by  the  legislature  with  the  individual  members  or  stock- 
holders, any  further  than  they  are  represented  by  the  artificial 
body  which  the  act  of  incorporation  calls  into  being.  They  have 
no  other  rights  except  those  which  exist  or  grow  out  of  the  con- 
stitution of  the  body  corporate  of  which  they  are  members.  To 
150 


CHAP.  V.]   LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  112 

this  can  we  only  look,  in  order  to  ascertain  whether  there  has 
been  any  breach  of  contract  or  violation  of  chartered  rights.  It 
constitutes,  of  itself,  the  contract  by  which  the  rights  of  all  parties 
are  to  be  governed.  When,  therefore,  it  is  expressly  provided 
between  the  legislature  on  the  one  hand  and  the  corporation  on 
the  other,  as  part  of  the  original  contract  of  incorporation,  that 
the  former  may  change  or  modify  or  abrogate  it  or  any  portion 
of  it,  it  cannot  be  said  that  any  contract  is  broken  or  infringed 
when  the  power  thus  reserved  is  exercised  with  the  consent  of  the 
artificial  body  of  whose  original  creation  and  existence  such  reser- 
vation formed  an  essential  part.  The  stockholder  cannot  say 
that  he  became  a  member  of  the  corporation  on  the  faith  of  an 
agreement  made  by  the  legislature  with  the  corporation,  that  the 
original  act  of  incorporation  should  undergo  no  change  except 
with  his  assent.  Such  a  position  may  be  asserted  with  more 
plausibility,  if  there  was  an  absence  of  a  clause  in  the  original 
act  of  incorporation  providing  for  an  alteration  in  its  terms.  In 
such  a  case  it  might  perhaps  be  maintained  that  there  was  a 
strong  implication  that  the  charter  should  remain  inviolate,  and 
that  the  holders  of  shares  invested  their  property  in  the  corpora- 
tion relying  upon  a  contract  entered  into  between  it  and  the 
legislature  that  the  provisions  of  the  act  creating  it  should  remain 
unchanged.  But  it  is  difficult  to  see  how  such  a  construction  can 
be  put  on  a  contract  which  contains  an  express  stipulation  that  it 
shall  be  subject  to  amendment  and  alteration.  If  it  be  asked  by 
whom  such  amendment  or  alteration  is  to  be  made,  the  answer 
is  obvious :  by  the  parties  to  the  contract,  the  legislature  on  the 
one  hand  and  the  corporation  on  the  other  ;  the  former  expressing 
its  intention  by  means  of  a  legislative  act,  and  the  latter  assenting 
thereto  by  a  vote  of  the  majority  of  the  stockholders,  according 
to  the  provisions  of  its  charter.  It  is  nothing  more  than  the 
ordinary  case  of  a  stipulation  that  one  of  the  parties  to  a  contract 
may  vary  its  terms  with  the  assent  of  the  other  contracting  party. 
In  such  case,  all  persons  claiming  derivative  rights  or  interests 
under  the  original  contract,  with  notice  of  its  terms,  would  be 
bound  by  the  amendment  or  alteration  to  which  the  parties  should 
agree.  It  is  a  mistake,  therefore,  to  say  that  the  contract  of  a 
stockholder  with  a  corporation  established  under  our  statutes 
binds  the  latter  to  undertake  no  new  enterprise  and  engage  in  do 
business  or  operation  other  than  that  contemplated  by  fche  original 

151 


§  112   INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

charter.  This  interpretation  puts  aside  the  express  provision 
authorizing  an  amendment  or  alteration  of  the  act  of  incorporation, 
and  gives  it  no  effect  as  against  a  stockholder  without  his  assent, 
although  he  bought  his  stock  or  subscribed  for  his  shares  subject 
to  the  legal  effect  of  such  a  stipulation.  The  real  contract  into 
which  the  stockholder  enters  with  the  corporation  is,  that  he 
agrees  to  become  a  member  of  an  artificial  body  which  is  created 
and  has  its  existence  by  virtue  of  a  contract  with  the  legislature, 
which  may  be  amended  or  changed  with  the  consent  of  the  com- 
pany, ascertained  and  declared  in  the  mode  pointed  out  by  law. 
Having,  by  virtue  of  the  relation  which  subsists  between  himself 
and  the  corporation  as  a  holder  of  shares,  assented  to  the  terms 
of  the  original  act  of  incorporation,  he  cannot  be  heard  to  say 
that  he  will  not  be  bound  by  a  vote  of  the  majority  of  the  stock- 
holders accepting  an  amendment  or  alteration  of  the  charter 
made  in  pursuance  of  an  express  authority  reserved  to  the  legis- 
lature, and  which  by  such  acceptance  has  become  binding  on  the 
corporation." 

In  some  few  of  the  States,  as  for  example  Ohio,1  the  law  provides 
that  no  amendment  shall  change  substantially  the  original  pur- 
poses of  the  organization.  In  many  of  the  States  great  similarity 
is  to  be  observed  in  the  formalities  necessary  to  be  taken  in  order 
to  legally  amend  the  charter.  Usually  the  matter  is  brought  to 
the  attention  of  the  stockholders  by  a  resolution  passed  by  the 
board  of  directors  directing  the  calling  of  a  meeting  of  the  stock- 
holders for  the  purpose  of  passing  upon  certain  proposed  amend- 
ments. A  meeting  of  the  stockholders  is  then  called  in  the  manner 
prescribed  by  statute,  if  any,  or  according  to  the  method  set  forth 
in  the  by-laws.  If  the  requisite  number  of  stockholders  vote  in 
favor  of  such  amendment,  a  certificate  to  that  effect  is  usually 
made  by  the  officers  of  the  corporation  and  filed  in  the  same  offices 
as  is  required  in  the  case  of  the  original  articles  of  incorporation. 
Thereupon  the  amendment  ordinarily  becomes  effective.  If  the 
statute  does  not  prescribe  the  method  of  amending  the  charter, 
the  only  safe  plan  to  pursue  is  to  adopt  substantially  the  same 
procedure  therefor  as  is  prescribed  by  statute  in  the  case  of  original 
articles.2 

i  See   Revised  Statutes  of  Ohio,  sec.         2  Day  v.   Company,   75   la.   694;    38 
3258a  ;  also  State  v.  Taylor,  55  O.  St.  61 ;     N.  W.  113. 
Picard  v.  Hughey,  58  O.  St.  577. 
152 


CHAP.  V.]   LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  113 

§  113.  Reserved  Right  of  the  State  to  repeal  Charters.  —  Without 
exception,  under  the  system  of  incorporation  now  in  vogue,  each 
of  the  several  States  and  Territories  reserves  the  right  in  the  grant- 
ing of  corporate  charters  under  general  acts  to  alter,  amend,  or 
repeal  the  same  at  any  future  time.  The  presence  of  such  enact- 
ments is  due  to  the  decision  of  the  United  States  Supreme  Court 
in  Dartmouth  College  v.  Woodward,1  wherein  that  tribunal  an- 
nounced the  principle  that  the  charter  of  a  private  corporation 
was  entitled  to  protection  from  alteration,  amendment,  or  repeal 
on  the  part  of  State  legislatures  under  the  clause  of  the  Federal 
Constitution  forbidding  impairment  of  the  obligation  of  contracts. 
When  this  case  was  decided,  it  became  obvious  at  once  that "  many 
acts  of  incorporation  which  had  been  passed  as  laws  of  a  public 
character,  partaking  in  no  general  sense  of  a  bargain  between  the 
States  and  the  corporations  which  they  created,  but  which  yet  con- 
ferred private  rights,  were  no  longer  subject  to  alteration,  amend- 
ment, or  repeal  except  by  the  consent  of  the  corporate  body,  and 
that  the  general  control  which  the  legislatures  creating  such 
bodies  had  previously  supposed  they  had  the  right  to  exercise,  no 
longer  existed."  It  was  no  doubt  with  a  view  to  suggesting  a 
method  by  which  the  State  legislatures  could  retain  in  a  large 
measure  this  important  power  without  violating  the  provisions  of 
the  Federal  Constitution,  that  Justice  Story,  in  his  concurring 
opinion  in  the  Dartmouth  College  Case,  suggested  that,  "  when  the 
legislature  was  enacting  a  charter  for  a  corporation,  a  provision 
in  the  statute  reserving  to  the  legislature  the  right  to  amend  or 
repeal  it  must  be  held  to  be  a  part  of  the  contract  itself,  and  the 
subsequent  exercise  of  the  right  would  be  in  accordance  with  the 
contract  and  could  not  therefore  impair  its  obligation."2 

With  respect  to  the  right  to  repeal,  the  power  of  the  legislature 
in  this  regard,  when  exercised,  is  all  but  absolute,  and  the  courts 
ordinarily  will  not  inquire  into  the  legislative  motive  for  exercis- 
ing it.  Under  such  circumstances  it  will  be  presumed  that  the 
power  is  properly  exercised.3  The  only  exception  appears  to  be 
that  the  courts  will  interfere  where  the  legislature  has  exercised 
its  power  of  repeal  so  wantonly  and  causelessly  as  palpably  to 
violate  the  principles  of  natural  justice.4 

1  4  Wheaton,  5 1 8,  decided  in  1819.  Wagner  Free  Institution  V.  Philadelphia! 

2  Greenwood  v.  Company,  105    U.  8.     132  Pa.  St.  612. 

18.  4  Lothrop  ei  «/.  v.  Stedman  el  «/.,  Fed. 

8  Greenwood  v.  Company,  105  U.  S.  IS;     Cases,  N<»   8519. 

L53 


§  114   INCORPORATION  AND  ORGANIZATION  OP  CORPORATIONS.    [PART  I. 

Another  question,  however,  is  presented  when  the  legislature 
attempts  to  alter  or  amend  the  charter.  In  order  to  justify  the 
exercise  of  this  power  by  the  legislature  the  same  must  be  so 
exercised  as  not  to  defeat  or  substantially  impair  the  object  of 
the  grant  or  any  rights  vested  under  it  which  the  legislature  may 
deem  necessary  to  secure  either  that  object  or  some  public  right.1 
From  the  foregoing  it  is  to  be  seen  that  the  reserved  power  to 
repeal  and  alter  is  not  unlimited.  On  this  subject  the  U.  S. 
Supreme  Court,  in  Union  Pacific  Railroad  Co.  v.  United  States,2 
spoke  as  follows : 

"  That  the  power  to  alter  or  amend  a  charter  even  when  reserved  has 
a  limit  no  one  can  doubt.  All  agree  that  it  cannot  be  used  to  take 
away  the  property  already  acquired  under  the  operation  of  the 
charter  or  to  deprive  the  corporation  of  the  fruits  actually  reduced 
to  possession  of  contracts  lawfully  made.  It  may  safely  be  affirmed 
that  the  reserve  power  may  be  exercised  to  almost  any  extent  to  carry 
into  effect  the  original  purposes  of  the  grant  or  to  secure  the  due 
administration  of  its  affairs  so  as  to  protect  the  rights  of  stockholders 
and  creditors,  and  for  the  proper  distribution  of  its  assets.  Also 
to  protect  the  rights  of  the  public  and  of  the  incorporators  or  to 
promote  the  due  administration  of  the  affairs  of  the  corporation. 
The  alterations  must,  however,  be  reasonable.  They  must  be  made  in 
good  faith,  and  be  consistent  with  the  object  and  scope  of  the  act  of 
incorporation.  Sheer  oppression  and  wrong  cannot  be  inflicted  under 
the  guise  of  alteration  or  amendment." 

§  114.  Legislative  Control  over  Dissolution  of  Corporations.  — 
Legislative  control  over  dissolution  of  domestic  corporations 
(omitting  any  reference  to  forfeiture  of  charters  by  State  action, ) 
is  exercised  in  the  following  four  ways :  (1)  by  prescribing  the 
maximum  duration  of  corporate  charters;  (2)  by  permitting 
corporations  to  surrender  their  charters  before  organization  ; 
(3)  by  authorizing  voluntary  dissolution,  with  or  without  recourse 
to  the  courts;  (4)  by  enacting  statutes  authorizing  involuntary 
dissolution  on  application  of  stockholders  or  creditors.  Each  of 
these  matters  will  now  be  taken  up  briefly  for  discussion. 

(1)  Legislative  limitations  upon  corporate  duration.  In  the 
absence  of  any  provision  in  the  governing  statute  or  in  the  charter 
limiting  corporate  duration,  the  corporation  is  entitled  to  perpetual 

i  N.  Y.  &  N.  E.  Railway  Co.  v.  Town  2  99  U.  S.  700. 

of  Bristol,  151  U.  S.  556. 
154 


CHAP.  V.]    LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.   §  114 

existence.1  The  legislature  may  however,  if  it  sees  fit,  limit 
the  duration  of  corporate  existence  to  any  specific  number  of 
years.  This  right  has  been  exercised  in  a  majority  of  the 
States.  Upon  expiration  of  the  period  of  time  limited  in  the 
charter  as  the  duration  of  corporate  life,  dissolution  results  by 
operation  of  law.3  If  the  articles  provide  for  a  longer  period 
of  duration  than  the  law  allows,  then  the  excess  is  of  no  force 
or  effect.4 

In  many  of  the  States  statutes  exist  continuing  the  existence  of 
corporations  after  the  expiration  of  the  period  limited  in  their 
charters  for  certain  periods  of  years  in  order  to  permit  them  to 
close  up  their  corporate  affairs.  Such  statutes  may  be  lawfully 
enacted  subsequent  to  the  creation  of  the  corporation,  for  the 
reason  that  they  provide  for  the  enforcement  of  rights  which 
equity  recognizes  even  in  the  absence  of  statute.5 

(2)  Surrender  of  charter  before  organization.  Statutes  exist 
in  the  States  of  Connecticut,  Delaware,  Maine,  Massachusetts, 
Nevada,  New  Jersey,  New  York,  North  Carolina,  Virginia,  West 
Virginia,  and  Wisconsin  expressly  permitting  corporations  to 
surrender  their  charters  either  prior  to  organization  or  to  the 
commencement  of  corporate  business.  It  is  unquestionably  true 
that  in  order  to  render  such  a  surrender  valid  it  must  have  been 
made  under  authority  of  the  statutory  provision  enacted,  which 
is  of  course  equivalent  to  acceptance  by  the  State.6 

(3)  Voluntary  dissolution  with  or  without  recourse  to  the 
courts.  "  Charters,"  it  has  been  said,  "  are  in  many  respects  com- 
pacts between  the  government  and  the  corporators.  And  as  the 
former  cannot  deprive  the  latter  of  their  franchises  in  violation  of 
the  compact,  so  the  latter  cannot  put  an  end  to  the  compact  with- 
out the  consent  of  the  former.  It  is  equally  obligatory  on  both 
parties.  The  surrender  of  a  charter  can  only  be  made  by  some 
formal  act  of  the  corporation,  and  will  be  of  no  avail  until  ac- 
cepted by  the  government.  There  must  be  the  same  agreement 
of  the  parties  to  dissolve  that  there  was  to  form  the  compact.     It 

1  F.  L.  &  S.  Co.  v.  Clowes,  3  N.  Y.  470.     v.    Hutchinson,    183    111.   605;    56   N.   E. 

3  Mason    v.    Company,   25   Fed.   882;     388. 

Bradley  v.  Reppell,  133  Mo.  545  ;  32  S.  W.  e  Taylor  v.  Holmes,  14  Fed.  98  :  Revere 

6-t5.  ».  Company,  15  Pick.  (Mass.)  351;  Combes, 

4  People  v.  Cheeseman,  7  Col.  376;  3  ,.  Keyes,  89  Wis.  _".i:  ;  62  N.  W.  89; 
Pac.  716.  Law  v.  Rich,  47  VV.  Va.  634  ;  35  S.  E.  858  ; 

6  Foster  0.  Bank,  16  Mass.  245  ;  Singer     Mariners  v.  Sewall,  50  Me.  220  ;  Barton  '■ 

Association,   114  Ind.  226;   16  N.  B.  186. 

155 


§  114    INCORPORATION   AND   ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

is  the  acceptance  which  gives  efficiency  to  the  surrender.  Dis- 
solution of  a  corporation  extinguishes  all  its  debts.  The  power 
of  dissolving  itself  by  its  own  act  would  be  a  dangerous  power, 
and  one  which  cannot  be  supposed  to  exist." 1 

The  foregoing  statement  of  the  law  is  unquestionably  based 
upon  both  reason  and  authority.  Accordingly,  a  corporation  may 
dispose  of  all  its  assets,  cease  entirely  to  do  business,  and  neglect 
to  elect  officers  or  hold  meetings  of  any  kind,  yet  it  cannot  be 
legally  dissolved  by  any  action  of  its  stockholders  or  a  surrender 
of  its  charter  unless  such  surrender  is  authorized  by  some 
statute.2 

Where  statutes  exist  authorizing  dissolution  of  corporations 
prior  to  the  termination  of  the  period  limited  in  their  charters, 
such  statutes  are  of  course  equivalent  to  an  acceptance  by  the 
legislature  of  the  surrender  of  the  charter.  All  that  is  necessary 
is  that  the  statute  shall  be  substantially  complied  with  in  order 
that  the  dissolution  may  be  effective.3 

It  may  be  remarked,  in  passing,  that  no  cessation  or  abandon- 
ment of  its  corporate  business,  failure  to  hold  corporate  meetings 
or  to  elect  officers,  alienation  or  loss  of  all  its  property,  has  the 
effect  in  law  of  dissolving  the  corporation.4 

(4)  Involuntary  dissolution  on  application  of  stockholders  and 
creditors.  Most  of  the  States  have  enacted  statutes  giving  courts 
possessing  equitable  powers  the  right  to  wind  up  corporations  for 
cause  shown  upon  application  of  some  stockholder  or  on  petition 
of  creditors.  But  such  proceedings,  even  when  the  corporation  is 
insolvent,  do  not  necessarily  dissolve  the  corporation,  unless  the 
statute  that  is  invoked  expressly  so  provides.5 

It  has  been  expressly  held  that  corporations  are  not  dissolved  by 


i  Boston  Glass  Manufactory  v.  Lang-  222  ;  Boston  Glass  Manufactory  v.  Lang- 
don,  24  Pick.  49;  see  also  Olds  v.  Company  don,  24  Pick.  (Mass.)  49  ;  Kincaid  v.  Dwi- 
(Mass.),  70  N.  E.  1022.  nelle,  59  N.  Y.   548;  Jones  v.  Edson,  10 

Kan.  Ap.  110;  62  Pac.  249  ;  State  v.  Trus- 
tees, 5  Ind.  44  ;  Wilmington  &  Reading 
Ry.  Co.  v.  Downward  (Del.),  14  Atl.  720; 
Muscatine    Turnverein   v.  Funck,  18   la. 


2  Everetts  v.  Company,  20  Conn.  448 
Rorke  v.  Thomas,  56  N.  Y.  559 ;  People  v 
Ballard,  134  N.  Y.  269 ;  32  N.  E.  54 
Commonwealth  v.   Silfer,  53   Pa.  St.  71 


Wilson  v.    Proprietors,  etc.,  9  R.  I.  590 ;  469 ;  U.  S.  v.  Company,  1  Fed.  700 ;  Brad. 

State  v.  Association,  35  O.  St.  258.  ley  v.  McKee,   5  Cranch  C.  C.  298 ;  Fed. 

3  Commonwealth  v.  Slifer,  53  Pa.  St.  Cases,  No.  1784. 

71  ;  In  re  Lincoln  Co.,  190  Pa.  St.  124  ;  42  5  Sprague    Brimmer  Mfg.  Co.  v.  Com- 

Atl.   538;  Wilson   v.  Proprietors,  etc,  9  pany,  26  Fed.  572  ;  Stolzeu.  Company,  100 

r.  i.  590.  Wis.  208 ;  75  N.  W.  987  ;  Olds  v.  Com- 

*  People  v.  B.  &  R.  T.  Road,  23  Wend,  pany  (Mass.),  70  N.  E.  1022. 
156 


CHAP.  V.]   LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  115 

statutory  proceedings  in  bankruptcy  or  insolvency,  or  by  appoint- 
ment of  receivers  in  equity  or  by  assignment  for  the  benefit  of 
creditors.1 

§  115.  Forfeiture  of  Charters.  —  At  common  law  forfeiture  of 
charters  was  accomplished  by  means  of  scire  facias,  or  by  an 
information  by  the  proper  State  officials  in  the  nature  of  a  writ 
of  quo  warranto.2  "  An  information  for  the  purpose  of  dissolving 
a  corporation  or  of  seizing  its  franchises,"  it  has  been  said,  "  can- 
not be  brought  except  by  the  authority  of  the  Commonwealth, 
exercised  by  the  legislature  or  by  the  attorney  or  solicitor-general 
acting  under  its  direction  or  ex  officio  in  its  behalf.  For  the 
Commonwealth  may  waive  any  provision  of  any  condition,  express 
or  implied,  on  which  the  corporation  was  created  ;  and  courts  can- 
not give  judgment  for  the  seizure  by  the  Commonwealth  of  the 
franchises  of  any  corporation  unless  the  Commonwealth  be  a  party 
in  interest  to  the  suit  and  assents  to  the  judgment."3 

A  corporation  cannot  within  the  meaning  of  the  law  forfeit  its 
rights  and  seal  up  the  corporation.  A  corporation  without  rights, 
without  legal  capacity  to  do  anything,  not  even  to  acquire  rights, 
is  an  impossibility.  It  has  never  been  seriously  contended  that 
mere  non-performance  of  conditions  subsequent  on  the  part  of 
a  corporation  has  the  effect  ex  proprio  vigore  to  put  an  end 
to  corporate  life.  By  such  non-performance  the  corporation  is 
not  ipso  facto  dissolved  or  deprived  of  its  corporate  existence 
or  corporate  rights,  but  it  is  simply  exposed  to  proceedings  in 
behalf  of  the  State  to  establish  and  enforce  a  forfeiture.  The 
State  which  gave  the  corporate  life  may  take  it  away.  The  State 
which  imposed  the  conditions  may  waive  their  performance,  and 
the  corporate  life  may  run  on  until  the  State  by  proper  proceedings 
(ordinarily  quo  tvarranto,  or  in  the  nature  of  quo  ivarranto)  inter- 
poses and  enforces  a  forfeiture.4 

Courts  of  equity  have  no  inherent  jurisdiction,  in  the  absence 
of  statute  conferring  the  same,  to  decree  a  dissolution  of  a  cor- 
poration or  declare  a  forfeiture  of  its  charter  on  any  grounds.5 

1  Chamberlain  v.  Company,  118  Mass.  N.  V.  366;  W.  &  B.  T.  Co.  v.  Maryland, 
532;  Taylor?'.  Company,  14  Allen  (Mass.),      19  Ml.  239. 

■353;    Montgomery   v.    Men-ill,   is   Midi.  8  Commonwealth  v. Company,  5  Mass. 

•338;  Boston  Glass  Manufactory  v.  Lang-  230. 

don,   24    Pick.   (Mass.)   49;    Central    Nat.  '   Matter    of    Brooklyn    Elevated    Ry. 

Bank  v.  Company,  104  U.  S.  54.  Co.,  125  N.  Y.  434  ;  26  N.  E.  474. 

2  Bex  v.  Passmore,  3  Term  Reports,  6  Wheeler  v.  Company,  L4S  111.  197; 
199;  Slee  v.   Bloom,  5  Johnson's  Chan.  32  N.  E.  420;  Denike    v.   Company,  80 

i:.7 


§  115    INCORPORATION  AND  ORGANIZATION  OP  CORPORATIONS.  [PART  T. 

The  principal  grounds  under  the  statute  upon  which  charters  will 
be  forfeited  may  be  enumerated  as  follows :  (1)  non-user  of  cor- 
porate franchises ;  (2)  mis-user  or  abuse  of  corporate  powers ;  (3) 
for  non-performance  of  conditions  precedent  to  valid  existence  as 
a  corporation  ;  (4)  for  non-performance  of  conditions  subsequent 
to  valid  continuance  of  existence  as  a  corporation ;  (5)  for  viola- 
tion of  express  statutes ;  (6)  for  non-payment  of  taxes ;  (7)  for 
insolvency.  These  will  now  be  taken  up  briefly  for  separate 
consideration. 

(1)  Forfeiture  for  non-user  of  corporate  franchises.  It  is  a  well- 
established  doctrine  of  the  law  that  courts  should  proceed  with 
extreme  caution  in  proceedings  which  have  for  their  object  the 
forfeiture  of  corporate  franchises ;  nor  should  such  a  penalty  be 
visited  except  for  plain  abuse  of  power  by  which  the  corporation 
fails  to  fulfil  the  designs  and  purposes  of  its  organization.1  Again 
it  has  been  well  said :  "  It  is  not  every  failure  to  perform  a  duty 
imposed  that  will  work  a  forfeiture.  It  must  be  something  more 
than  accidental  negligence,  something  more  than  an  excess  of 
power,  something  more  than  a  mere  mistake  in  the  mode  of 
executing  the  acknowledged  powers ;  and  though  a  single  act 
of  simple  non-feasance  may  be  a  ground  of  forfeiture,  a  specific 
act  of  non-feasance  not  committed  wilfully  and  not  producing 
or  tending  to  produce  mischievous  consequences  to  any  one, 
and  not  being  contrary  to  formal  regulations  of  the  charter,, 
will  not  be."2 

All  these  judicial  utterances  are  little  more  than  a  declaration 
of  the  fact  that  the  policy  of  the  State,  of  its  officers  and  courts 
should  be  to  encourage  in  all  legitimate  ways  the  organization 
and  operation  of  all  corporations  organized  to  promote  any  legit- 
imate enterprise.  "  The  rights,  privileges,  and  franchises  of  such 
corporations,"  it  has  been  well  said,  "  should  not  be  declared 
forfeited,  and  they  should  not  be  ousted  and  excluded  therefrom, 
except  for  solid,  weighty,  and  cogent  reasons,  for  the  violation  of 
a  positive  or  prohibitory  statute  and  not  of  a  statute  whose  pro- 
visions are  permissive  and  apparently  directory,  and  never  upon 
mere  technical  grounds."  3 

The  term  "  forfeiture  of  charter  for  non-user  of  corporate 
franchises,"   as   here   used,  has  a  very   broad    signification.     It 

N.Y.599.    See  however  Miner  v.  Company,  x  State  v.  Chemical  Bank,  10  0.  St.  535. 

93  Mich.  97  ;  Arents  v.  Company,  101  Fed.  '2  State  v.  Company,  8  R.  I.  182. 

138.  3  Moore  v.  State,  71  Ind.  478. 

158 


CHAP.  V.]   LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  115 

may  have  reference  to  action  taken  by  the  State  with  a  view- 
to  forfeiture  of  corporate  charters  on  any  one  of  the  following 
grounds:  failure  to  organize  the  corporation  within  the  time 
prescribed  by  statute ; :  failure  to  carry  on  the  business  enu- 
merated in  its  articles;2  failure  to  elect  officers;3  failure  to 
maintain  domiciliary  office  within  the  State;4  failure  to  com- 
mence business  within  the  time  designated  by  statute.5 

(2)  Forfeiture  for  misuse  or  abuse  of  corporate  powers.  "  To 
work  a  forfeiture  on  the  ground  of  misuser  or  abuse  of  corporate 
powers,  there  should  not  only  be  a  wrong,  but  one  arising  from 
wilful  abuse  or  improper  neglect.  The  corporate  default  must 
be  something  more  than  accidental  negligence  or  mere  mistaken 
excess  of  power,  or  mistake  in  the  mode  of  exercising  an  acknowl- 
edged power.  There  must  be  an  abuse  of  trust,  of  such  a  nature  as 
would  render  a  trustee  liable  to  forfeit  his  station  on  the  complaint 
of  his  cestui  que  trust  if  the  question  stood  on  the  relation  between 
them.  Corporations  are  political  trustees.  Have  they  fulfilled  the 
purposes  of  their  trust  or  acted  in  good  faith  with  a  view  to  fulfil- 
ment ?  is  the  question  to  be  asked  when  they  are  called  upon  to 
forfeit  their  charter,  either  for  acts  of  commission  or  omission."  6 

"  It  appears  to  be  settled,"  observed  the  New  York  Court  of 
Appeals,  "  that  the  State  as  prosecutor  must  show  on  the  part 
of  the  corporation  accused  some  act  against  the  law  of  its  being 
which  has  produced  or  tends  to  produce  injury  to  the  public.  The 
transgression  must  not  be  merely  formal  or  accidental,  but  mate- 
rial and  serious,  and  such  as  to  harm  or  menace  the  public  welfare. 
For  the  State  does  not  concern  itself  with  the  quarrels  of  private 
litigants.  It  furnishes  for  them  sufficient  courts  and  remedies, 
but  interferes  only  where  some  public  interest  requires  its  action. 
Corporations  may  and  often  do  exceed  their  authority  where  only 
private  rights  are  affected.  But  when  the  transgression  has  a 
wider  scope  and  threatens  the  welfare  of  the  people,  they  may 
summon  the  offender  to  answer  for  the  abuse  of  its  franchises  or 
the  violation  of  its  corporate  duty."  7 

1  State  v.  Simonton,  78  N.  C.  57.  6  W.F.C.F.  Co.  i\  Kittridge,  5  Saw.  44  ; 

2  W.  C.  M.  Co.  v.  Burns,  1 14  N.  C.  353  ;  People  v.  Bank,  129  111.  618;  22  N.  E.  288. 
19  S.  E.  238.  c  People  v.  B.  &  R.  T.  Road,  28  Wend. 

3  State  v.  Barron,  58  N.  II.  370.  222. 

4  State  v.  Company,  58  Minn.  330;  59  7  IVople  v.  Company,  121  \.  F.582;  24 
N.  W.  1048;  State  v.  Company,  59  Kan.  N.  E.  834  ;  see  also  M.  O.  &  R.  R.  Co.  v. 
151  ;  52  Pac.  422;  State  v.  Company,  45  Cross,  20  Ark.  443. 

Wi.s.  579. 

l.V.i 


§  116    INCORPORATION  AND  ORGANIZATION  OP  CORPORATIONS.    [PART  I. 

(3)  Forfeiture  for  non-performance  of  conditions  precedent. 
Even  a  corporation  defectively  organized  may  have  what  is 
termed  a  "  de  facto  existence,"  so  that  it  cannot  ordinarily  be 
impeached  by  parties  other  than  the  State.  Nevertheless  the 
right  to  bring  proceedings  to  forfeit  the  charter  of  such  cor- 
poration vests  with  the  State  which  may  bring  proceedings  to 
forfeit  the  same  and  oust  it  from  the  exercise  of  corporate 
powers.1 

(4)  Forfeiture  for  non-performance  of  conditions  subsequent.  It 
has  been  well  settled  that  charters  of  corporations  may  be  forfeited 
by  proper  action  brought  by  the  State  for  failure  to  comply  with 
conditions  subsequent  which  are  clearly  mandatory  and  not  merely 
directory  in  their  nature.2 

(5)  Forfeiture  for  violation  of  express  statute.  This  is  one  of 
the  clearest  grounds  for  the  exercise  by  the  State  of  its  right 
to  forfeit  charters.  The  most  common  ground  for  the  exercise 
thereof  is  in  connection  with  anti-trust  legislation.3 

(6)  Forfeiture  for  non-payment  of  taxes.  Several  of  the  States 
authorize  forfeiture  of  charters  for  non-payment  of  organization 
and  annual  franchise  taxes.  This  right  has  been  exercised  with 
great  frequency,  and  constitutes  unquestionably  a  valid  exercise 
of  the  power  of  such  legislature  over  corporations.4 

(7)  Forfeiture  for  insolvency.  In  the  absence  of  statutory  pro- 
vision to  that  effect,  insolvency  alone  will  not  authorize  the  State 
to  forfeit  corporate  charters.5  However,  it  is  unquestionably  valid 
for  a  State  to  prescribe  that  if  a  corporation  be  insolvent  for  a 
certain  length  of  time  it  shall  constitute  a  forfeiture  of  its  charter.6 

§  116.  The  Police  Power  of  the  State.  —  The  police  power  of  the 
State  comprehends  all  those  general  laws  of  internal  regulation 
which  are  necessary  to  secure  the  peace,  good  order,  health,  and 

i  Holraan  v.  State,  105  Ind.  569  ;  People  bers,  42  Cal.  201  ;  People  v.  Bank,  129  111. 

v.  City  Bank,  7  Col.  226 ;  3  Pac.  214.  618 ;  22  N.  E.  288 ;  24  N.  E.  834. 

2  State   v.  Company,   1   Term.   Cases,  4  Hugbesdale  Mfg.  Co.  v.  Vanner,  12 

511  ;  People  v.  Company,  131  N.  Y.  140;  R.  I.  491 ;  Bank  v.  Company,  17  Ap.  Div. 

Hammond  v.  Strauss,  53  Md.  1.  (N.  Y.)  524. 

8  Simmons  v.  Company,  113  N.  C.  147  ;  5  People   v.  Bank,  6   Cowen  (N.  Y.), 

State  v.  Company,  24  Texas,  80;  Huyler  211 ;  A.  &  L.  T.  Co.  v.  Holthonse,  7  Ind. 

v.  Company,  40  N.  J.  Eq.  392;  People  v.  59;  State  v.  Bank,  13  Smeads&M.  (Miss.) 

Company,  60  How.  Pr.  82 ;  People  v.  Com-  569 ;   Chicago   Life  Ins.   Co.    v.  Needles, 

pany,  130  111.  268;  State*;.  Standard  Oil  113  U.  S.  574. 

Co."  49  O.  St.   137;  People  v.  Company,  6  People  v.  Bank,  12  Mich.  526;  C.  M. 

121  N.  Y.  582  ;  see  also  People  v.  Cham-  L.  &  I.  Ass'n  v.  Hunt,  127  111.  257  ;  Denike 


v.  Company,  80  N.  Y.  599. 


160 


CHAP.  V.]   LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.   §  116 

comfort  of  society,  but  the  proper  limit  in  its  bearing  upon  charter 
rights  and  privileges  of  private  corporations  for  public  uses 
would  seem  to  be  this  :  That  the  legislature  may  at  all  times  regu- 
late the  exercise  of  the  corporate  franchises  by  general  laws  passed 
in  good  faith  for  the  legitimate  ends  contemplated  by  State  police 
power;  that  is,  for  peace,  good  order,  health,  comfort,  and  welfare 
of  society  ;  but  it  cannot  under  the  color  of  such  laws  destroy  or 
impair  the  franchises  itself,  or  any  of  the  rights  or  powers  which 
are  essential  to  the  exercise  of  it.1 

After  the  decision  of  the  United  States  Supreme  Court  in  Dart- 
mouth College  v.  Woodward,2  that  court  proceeded  to  enunciate 
the  doctrine  that  in  the  exercise  of  what  is  termed  "  police  power," 
the  several  States  might  pass  laws  as  a  valid  exercise  of  such 
powers  when  otherwise  they  would  be  forbidden  to  do  so  under 
Section  10,  Article  1,  of  the  Constitution  of  the  United  States, 
which  forbids  the  impairing  of  the  obligations  of  contracts  by 
means  of  laws  enacted  by  them. 

The  police  power  arises  primarily  from  the  nature  of  the  social 
contract,  just  as  when  each  person  upon  becoming  a  member  of  a 
society  must  of  necessity  relinquish  some  of  the  rights  and  priv- 
ileges which,  as  an  individual  and  considered  alone,  he  might 
retain.  The  Supreme  Court  of  Massachusetts  in  Commonwealth 
v.  Alger  3  says :  "  All  property  is  subject  to  such  reasonable  re- 
strictions and  regulations  established  by  law  as  the  legislature 
under  the  governing  and  controlling  power  vested  in  them  by  the 
Constitution  may  think  necessary  and  expedient." 

In  Gibbons  v.  Ogden4  the  United  States  Supreme  Court  held 
that  the  police  power  is  lodged  with  the  several  States.  In  Prov- 
idence Bank  v.  Billings5  the  court  took  another  step  forward,  and 
held  that  the  abandonment  on  the  part  of  the  State  of  its  power  of 
regulation  in  this  regard  ought  never  to  be  presumed  in  any  case 
where  the  purpose  of  the  State  to  abandon  it  does  not  clearly  appear. 

In  the  License  Cases  6  the  court  held  that,  in  the  exercise  of  its 
police  power,  a  State  may  pass  quarantine  and  sanitary  laws  damag- 
ing and  even  destroying  property  in  some  cases.  In  Bartemeyer 
v.  Iowa 7  the  court  held  that  a  State  law  prohibiting  the  manufac- 

1  V.  W.  B.  It.  It.  Co.  v.  Bowers,  4  IIous-  *  9  Wheat.  1. 
ton,  Del.  506.  6  4  Patera,  514. 

2  4  Wheat.  518.  6  5  Boward,  404. 

3  7  Cuah.  84.  i  18  Wal.  138. 

11  l.ll 


§  116    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

ture  and  sale  of  intoxicating  liquors  was  a  valid  exercise  of  the 
police  power.  In  Beer  Company  v.  Massachusetts 2  the  court  held 
that  as  a  measure  of  police  regulation,  looking  to  the  preservation 
of  public  morals,  a  State  law  prohibiting  the  manufacture  and  sale 
of  intoxicating  liquors  is  not  repugnant  to  any  clause  of  the  Con- 
stitution of  the  United  States. 

In  Mugler  v.  Kansas  2  it  was  held  that  a  State  may  absolutely 
prohibit  the  manufacture  and  sale  of  intoxicating  liquors  as  a 
beverage,  and  may  declare  places  where  such  liquors  are  manufac- 
tured or  sold  to  be  nuisances,  and  may  authorize  the  destruction  of 
such  liquors  found  therein,  and  of  all  property  used  in  keeping  and 
manufacturing  such  nuisances.  Such  a  statute  is  valid  as  to  such 
liquors  lawfully  manufactured  before  the  enactment  of  the  statute, 
and  although  it  greatly  deteriorates  the  value  of  the  property  law- 
fully used  in  such  manufacture  before  the  enactment  of  the  statute. 
In  Munn  v.  Illinois 3  it  was  held  that  when  the  owner  of  property 
devotes  it  to  a  use  in  which  the  public  has  an  interest,  he  in  effect 
grants  to  the  public  an  interest  in  such  use,  and  must  to  the 
extent  of  that  interest  submit  to  be  controlled  by  the  public  for 
the  common  good  as  long  as  he  maintains  the  use. 

In  Fertilizing  Company  v.  Hyde  Park4  the  right  of  State 
authorities  to  compel  the  removal  of  a  bone  fertilizing  business 
from  a  location  near  the  village  to  a  point  farther  removed,  was 
held  to  be  valid  as  an  exercise  of  the  police  power. 

In  the  Slaughter  House  Cases 5  the  court  held  that  the  power 
of  State  legislatures  to  make  a  contract  of  such  a  character  that 
under  the  provisions  of  the  Constitution  it  cannot  be  modified  or 
abrogated  does  not  extend  to  subjects  affecting  public  health  and 
public  morals,  so  as  to  limit  the  further  exercise  of  legislative 
power  over  those  subjects,  to  the  prejudice  of  the  general  welfare. 
To  summarize  briefly  the  general  doctrine  of  the  federal 
Supreme  Court  on  this  subject,  the  same  may  be  done  by  present- 
ing the  following  abstract  propositions  : 

(1)  Laws  for  the  welfare  and  safety  of  a  community  being 
essential  to  the  existence  of  every  State,  it  cannot  be  supposed  to 
have  been  within  the  intention  of  the  original  thirteen  States  to 
limit  this  power  by  assenting  to  the  Federal  Constitution.6 

i  97  U.S.  25.  5  HI  U.  S.  746. 

2  123  U.  S.  623.  6  Louisville  &  N.  K.  Co.  v.  Kentucky, 

»  94  U.S.  113.  161  U.  S.  677;  40  L.  E.  849. 

*  97  U.  S.  659. 
162 


CHAP.  V.]   LEGISLATIVE  CONTROL  OYER  DOMESTIC  CORPORATIONS.  §  116 

(2)  Generally  speaking,  the  extent  to  which  a  State  can 
regulate  the  business  or  affairs  of  a  corporation  depends  upon 
the  nature  of  the  business  —  whether  it  affects  the  public  closely 
or  remotely.  If  it  is  of  such  a  character  or  magnitude  that  the 
public  are  directly  interested  in  its  proper  management,  then  it 
falls  within  the  proper  sphere  of  legislative  control.1 

(3)  Being  an  inherent  right  as  well  as  a  duty,  the  legislature 
may  pass  enactments  looking  towards  the  safety  of  life  and  prop- 
erty,  and  general  laws  of  this  nature  are  a  legitimate  exercise  of 
the  "  police  power."  Thus  it  may  compel  railroads  to  fence  tracks, 
maintain  cattle  guards,  put  up  signboards  at  crossings,  construct 
viaducts,  require  all  trains  to  stop  at  intersections  of  railroads,  etc.2 

(4)  Laws  intended  to  prevent  or  remove  nuisances  are  clearly 
within  the  "  police  power  "  of  the  State.3 

(5)  A  State  may  pass  laws  for  the  protection  of  its  inhabitants 
against  the  evils  of  intemperance,  even  though  existing  contracts 
be  affected  thereby.4 

(6)  Laws  regulating  the  employment  of  persons  of  a  certain 
age  in  manufactories  are  a  valid  exercise  of  the  general  power  of 
the  State  to  enact  laws  to  secure  the  health  and  education  of 
the  community.5 

(7)  A  State  may  by  statute  protect  the  interest  of  employees 
when  the  common  law  affords  no  protection  ;  as  for  example, 
a  law  providing  that  all  railroad  companies  shall  be  liable  for 
wages  due  to  day  laborers  employed  by  contractors  engaged 
to  construct  the  company's  railroad  and  works  was  held  to  be 
valid.6 

(8)  A  State  may  by  general  laws  regulate  the  use  and  dis- 
position of  property  within  its  jurisdiction,  although  existing 
incorporated  companies  be  thereby  affected.7 

(9)  A  State  may  pass  laws  for  the  protection  of  the  morals 

1  Munn  v.  Illinois,  94   U.   S.  113  ;  24  28  L.  E.  629  ;  Mugler  v.  Kansas,  123  U.  S. 

L.  E.  77;  Pearsall  v.  Company,  161  U.  S.  623. 

646;  40  L.  E.  838.  5  Knoxville  Iron  Co.  v.  Harbison,   183 

»'  Reid  v.  Colorado,  187   U.  S.    137;  47  U.  S.  13;  46  L.  E.  55. 

L.  E.  108;  Smith  v.  Company,  181  U.  S.  6  Knoxville  Iron  Co.  v.  Harbison,  183 

248-  45  L.  E.  847.  U.  S.  13  ;  46  L.  E.  55;    Butchers'  Union, 

3' Slaughter  House  Cases,  16  Wall.  36;  etc.  v.  Company,  111  U.  S.  746;  28  L.  E. 

21  L.  E.  394.  585  ;  Dent  v.  West  Virginia,  129  V.  S.  114 j 

4  Reymann    Brewing   Co.   v.   Brister,  32  L.  E.  623;  Iloldcn  r.  Hardy,  169  U.  S. 

179  U.  S.  445;  45  L.  E.  269;    Rhodes  v.  366;  42  L.  E.  780. 

State  of  Iowa,  170   U.  S.  412;  42  L.  E.  7  Budd  v.  New  York,   143  U.  S.  517; 

1088;  Foster  v.  Kansas,  112    U.  S.  201;  36  L.  E.  247. 

1G3 


§  118    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

of  its  citizens,  even  though  vested  corporate  rights  be  thereby 
affected.1 

§  117.  Legislative  Investigation  into  Corporate  Affairs. — The 
statutes  of  California,  Michigan,  Minnesota,  North  Dakota,  Okla- 
homa, South  Dakota,  and  Wisconsin  contain  express  provisions 
for  the  appointment  of  legislative  committees  to  examine  into 
the  affairs  of  corporations  organized  under  their  laws.  The  pro- 
visions of  the  South  Dakota  act  may  be  quoted  as  exemplifying 
the  nature  of  such  statutory  provision.     It  reads  as  follows : 

"The  legislative  assembly,  or  either  branch  thereof,  may  examine 
into  the  affairs  and  condition  of  any  corporation  in  this  State  at  all 
times ;  and  for  that  purpose  any  committee  appointed  by  the  said 
assembly,  or  either  branch  thereof,  may  administer  all  necessary 
oaths  to  the  directors,  officers,  and  stockholders  of  such  corporation, 
and  may  examine  them  on  oath  in  relation  to  the  affairs  and  con- 
ditions thereof ;  and  may  examine  the  safes,  books,  papers,  and  docu- 
ments belonging  to  such  corporation,  or  pertaining  to  its  affairs  and 
condition,  and  compel  the  production  of  all  keys,  books,  papers,  and 
documents  by  summary  process,  to  be  issued  on  application  to  any 
circuit  court  or  any  judge  thereof,  under  such  rules  and  regulations  as 
the  court  may  prescribe."  2 

Such  an  inquiry  as  is  authorized  by  the  statutes  just  referred  to 
has  been  held  not  to  constitute  a  judicial  act,  and  is  therefore  con- 
sidered a  valid  exercise  of  legislative  powers.3  On  this  particular 
subject  the  Supreme  Court  of  Massachusetts  spoke  as  follows : 

"  The  inquiry  into  the  affairs  or  defaults  of  a  corporation  with  a 
view  to  continue  or  discontinue  it,  is  not  a  judicial  act.  No  issue  is 
framed.  No  decree  or  judgment  is  passed.  No  forfeiture  is  adjudged. 
No  fine  or  imprisonment  is  imposed.  But  an  inquiry  is  had  in  such 
form  as  is  deemed  most  wise  and  expedient,  with  a  view  to  ascertain- 
ing facts  upon  which  to  exert  legislative  power  or  to  learn  whether 
a  contingency  has  happened  upon  which  legislative  action  is  required."4 

§  118.  Legislative  Requirement  of  Annual  Reports  from  Corpora- 
tions. —  Statutes   exist    in    thirty-three    of   the    Commonwealths 

1  Austin  v.  Tennessee,  179  U.  S.  343;  2  Sec.  478,  Rev.  Civ.  Code  ;  sec.  2970, 

45  L.  E.  224  ;  Petit  v.  Minnesota,  177  U.  S.  Comp.  L. 

164;  4  L.  E.  716;  Hanningtonr.  Georgia,  3  Lothrop  v.   Stedman,  42  Conn.  583; 

161  U.    S.  299;  41  L.  E.   166;  L'Hote    v.  Fed.  Cas.  No.  8519. 
Hew  Orleans,  77  U.  S.  587 ;  44  L.  E.  899.  4  Crease  v.  Babcock,  23  Pick.  344. 

164 


CHAP.  V.]    LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.   §  119 

requiring  annual  reports  from  domestic  corporations.  The  valid- 
ity of  such  statutes  was  considered  by  the  Supreme  Court  in  the 
case  of  Eagle  Insurance  Company  v.  State  of  Ohio.1  The  court 
in  its  opinion  therein  spoke  as  follows : 

"  The  right  of  the  plaintiff  in  error  to  exist  as  a  corporation  and  its 
authority  in  that  capacity  to  conduct  the  particular  business  for  which 
it  was  created  were  granted  subject  to  the  condition  that  the  privileges 
and  franchises  conferred  upon  it  should  not  be  abused  or  so  employed 
as  to  defeat  the  ends  for  which  it  was  established,  and  that  when  so 
abused  or  misemployed  they  might  be  withdrawn  or  reclaimed  by  the 
State  in  such  way  and  by  such  modes  of  procedure  as  were  con- 
sistent with  law.  Although  no  such  condition  is  expressed  in  the 
plaintiff's  charter,  it  is  implied  in  every  grant  of  corporate  existence. 
Equally  implied  in  our  judgment  is  the  condition  that  the  corporation 
shall  be  subject  to  such  reasonable  regulations  in  respect  to  the  general 
conduct  of  its  powers  as  the  legislature  may  from  time  to  time  pre- 
scribe which  do  not  materially  interfere  with  or  obstruct  the  sub- 
stantial enjoyment  of  the  privileges  the  State  has  granted  only  to 
secure  the  ends  for  which  the  corporation  was  created.  If  this  con- 
dition be  not  implied,  then  the  creation  of  corporations  with  rights 
and  privileges  which  do  not  belong  to  individual  citizens  may  become 
dangerous  to  the  public  welfare  through  the  ignorance  or  misconduct  or 
fraud  of  those  to  whose  management  their  affairs  are  entrusted.  It 
would  be  extraordinary  for  the  legislative  department  of  a  govern- 
ment, charged  with  the  duty  of  enacting  such  laws  as  may  promote 
the  health  or  morals  or  prosperity  of  the  people  might  not  when 
unrestrained  by  constitutional  limitations  upon  its  authority,  provide 
by  reasonable  regulations  against  the  misuse  of  special  corporate 
privileges  which  it  has  granted,  and  which  could  not  except  by  its 
sanction,  express  or  implied,  have  been  exercised  at  all." 

The  conclusion  of  the  court  in  the  case  just  referred  to  was  that 
the  charter  of  the  corporation  did  not  exempt  it  from  obligations 
to  comply  with  the  subsequently  established  police  regulations  of 
the  State,  requiring  certain  corporations  to  make  annual  state- 
ments of  their  condition. 

§  119.  Inspection  of  Corporate  Books.  —  In  all  the  Common- 
wealths but  five  statutes  have  been  enacted  requiring  the  keeping 
of  certain  corporate  books  and  giving  to  stockholders,  and  some- 
times to   creditors   as   well,  the  right  to  inspect  the  same.     At 

l  153  U.  S.  446. 

1G5 


§  119    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

common  law  stockholders  had  the  right  to  inspect  books  and 
papers  of  the  corporation  at  reasonable  times  and  for  a  proper 
purpose.1     Creditors  had  no  such  common  law  rights. 

On  this  subject  the  New  York  Court  of  Appeals  in  the  Matter 
of  Steinway  2  spoke  as  follows  : 

"  The  elementary  works  unite  in  holding  that  the  incorporator  has 
the  right  in  question  and  that  mandamus  is  the  proper  remedy.  We 
think  that  according  to  the  decided  weight  of  authority  a  stockholder 
has  the  right  at  common  law  to  inspect  the  books  of  his  corporation 
at  a  proper  time  and  place  and  for  a  proper  purpose,  and  that  if  this 
right  is  refused  by  the  officers  in  charge,  writ  of  mandamus  may  issue 
in  the  sound  discretion  of  the  court  with  suitable  safeguards  to 
protect  the  interests  of  all  concerned.  It  should  not  be  issued  to  aid 
a  blackmailer,  nor  withheld  simply  because  the  interest  of  the  stock- 
holder is  small,  but  the  court  should  proceed  cautiously  and  dis- 
creetly, according  to  the  facts  of  the  particular  case.  To  the  extent, 
however,  that  an  absolute  right  is  conferred  by  statute,  nothing  is 
left  to  the  discretion  of  the  court  but  the  writ  to  issue  as  a  matter 
of  course,  although  even  then  doubtless  due  precautions  may  be  taken 
as  to  time  and  place  so  as  to  prevent  interruption  of  business,  or 
other  serious  inconvenience.  We  do  not  think,  however,  that  the 
statute  now  in  force  in  this  State  is  exclusive,  or  that  it  has  abridged 
the  common  law  right  of  stockholders  with  reference  to  the  examina- 
tion of  the  corporate  books.  By  enabling  the  stockholder  to  get  some 
information  in  a  new  way,  it  did  not  impliedly  repeal  the  common 
law  rule,  which  enabled  him  to  get  other  information  in  another  way, 
for  the  courts  do  not  hold  the  common  law  to  be  repealed  by  impli- 
cation unless  the  intention  is  obvious.  By  simply  providing  an  addi- 
tional remedy  the  existing  remedy  was  not  taken  away.  The  statute 
merely  strengthens  the  common  law  rule  with  reference  to  one  part 
thereof,  and  left  the  remainder  intact." 

The  right  of  inspection  of  corporate  books  is  not  the  inspection 
of  the  idle,  the  impertinent,  or  the  curious,  but  an  inspection  with 
a  laudable  object  to  accomplish,  or  a  real  and  actual  interest  upon 
which  is  predicated  the  request  for  information  disclosed  by  the 
books.3 

1  People  v.  Eadie,  63   Hun,  320 ;    133  2  159  N.  Y.  250. 

N.  Y.  573 ;    Burham  v.  Company,  76  Cal.  3  State  ex  rel.  Bourdette  v.  Company, 

24;  17  Pac.  940;  Phceuix  Iron  Co.  v.  Com-     49  La.  Ann.  1556  ;  22  So.  815. 
monwealth,  113  Pa.  St.  563;  Hemingway 
v.  Hemingway,  58  Conn.  443. 

.     166 


CHAP.  V.]  LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  120 

The  purpose  of  requiring  a  copy  of  stock  books  and  books  of 
account  at  the  corporation's  domiciliary  office  is  to  protect  the 
rights  of  stockholders  and  to  aid  the  State  in  exercising  its  visito- 
rial  powers,  or  to  enable  creditors  or  stockholders  to  ascertain  the 
number  of  shares  standing  in  the  names  of  each  so  as  to  levy 
execution  and  attachment  thereon.  The  mere  fact  that  a  domestic 
corporation  has  kept  its  books  in  another  State  when  required  by 
law  to  keep  its  books  at  its  domiciliary  office,  is  not  a  ground  for 
dissolving  the  corporation  when  parties  entitled  to  inspection  of 
such  books  have  never  been  refused  the  right  to  inspect  the  same 
at  the  domiciliary  office.1 

§120.  Anti-Trust  Legislation.  —  The  term  "trust"  includes 
any  form  of  combination  or  combinations  between  corporations  or 
between  corporations  and  individuals  for  the  purpose  of  regulating 
production  and  repressing  competition  by  means  of  the  power 
thus  centralized.2 

Under  the  common  law  agreements,  pools,  trusts,  or  combina- 
tions between  persons  or  corporations  looking  towards  any  absolute 
restraint  of  trade  or  to  regulate  prices  or  to  promote  monopolies, 
were  against  public  policy,  and  as  such  were  unlawful  and  void. 
But  when  the  question  of  public  policy  is  at  issue,  certain  matters 
should  be  noted. 

It  has  been  well  said  "  that  the  public  policy  of  the  State  varies 
from  time  to  time.  It  is  not  to  be  measured  by  the  private  com- 
bination or  combinations  of  the  persons  who  happen  to  be  exer- 
cising judicial  functions,  but  by  reference  to  the  enactment  of  the 
law-making  power,  and  in  the  absence  of  them  to  the  decisions  of 
the  courts.  When,  however,  the  legislature  has  spoken  upon  a 
particular  subject  and  within  the  limits  of  its  constitutional 
powers,  its  utterance  is  the  public  policy  of  the  State."3 

Congress  dealt  with  illegal  trade  combinations  in  relation  to 
interstate  commerce  as  early  as  1887,  when  it  passed  the  Inter- 
State  Commerce  Act,  and  later  on,  July  2, 1890,  it  passed  what  is 
known  as  the  "  Sherman  Anti-Trust  Act."  Since  that  time  thirty- 
three  of  the  States  have  passed  more  or  less  stringent  anti-trust 
acts.      All  this  legislation  has  been  framed  with  the  same  purpose. 

1  Ribling  Stock  Co.  v.  People,  147  111.  3  MacGinniss  v.  Company  (Mont.),  75 
234  ;  35  X.  E.  008.  Pac.  89  ;  United  States  v.  Association,  166 

2  MacGinniss  v.  Company  (Mont.),  75  U.  S.  290;  41  L.  E.  1007. 
Pac.  89. 

L67 


§  121   INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.   [PART  I, 

In  some  of  these  acts  an  arbitrary  distinction  is  made  between 
dealers  and  producers.  Such  provisions  have  under  certain  cir- 
cumstances been  declared  to  be  "  class  legislation,"  and  as  such 
are  invalid  under  the  Fourteenth  Amendment  to  the  Federal 
Constitution. 

Under  this  principle  the  anti-trust  acts  of  Illinois  and  Texas 
have  recently  been  declared  to  be  unconstitutional.1 

In  the  note  below  will  be  found  the  dates  of  the  passage  of  the 
earlier  anti-trust  acts  in  the  several  States.2 

§  121.  Regulation  of  Internal  Affairs. — In  many  of  the  States 
the  regulation  of  the  internal  affairs  of  corporations  has  been 
largely  delegated  by  statute  to  the  corporations  themselves.  Such 
is  the  case  in  Alabama,  Connecticut,  Delaware,  Iowa,  Maryland, 
Massachusetts,  New  Jersey,  Nebraska,  New  York,  North  Carolina, 
South  Carolina,  Tennessee,  Utah,  Virginia,  West  Virginia,  and 
Wisconsin. 

In  other  of  the  Commonwealths,  without  express  provision  of 
law  permitting  the  same,  State  officials  allow  clauses  for  the 
regulation  of  the  internal  affairs  of  the  corporation  to  be  in- 
corporated in  articles  of  incorporation  filed  with  them.     As  an 


1  Connolly  v.  Union  S.  P.  Co.,  184 
U.  S.  540 ;  46  L.  E.  679  ;  State  v.  Shippers 
&  Compress  Warehouse  Co.,  95  Texas,  603; 
69  S.  W.  58;  Ford  v.  Association,  155  111. 
166;  39  N.  E.  651  ;  Harding  v.  Company, 
182  111.  551  ;  55  N.  E.  577.  See  also 
Northern  Securities  Co.  v.  United  States, 
193  U.  S.  197. 

2  The  Federal  Anti-Trust  Act  commonly 
known  as  "the  Sherman  Act"  was  ap- 
proved July  2,  1890.  The  following  is  a 
list  of  the  States  wherein  anti-trust  legis- 
lation of  a  more  or  less  comprehensive 
character  was  passed,  together  with  the 
date  the  same  went  into  effect : 

Alabama,  Insurance  Act,  Feb.  18,  1897; 
Arkansas,  Anti-Trust  Act,  Mar.  16,  1897  ; 
California,  Cattle  Trust  Act,  Feb.  27,1893  ; 
Delaware,  Life  Insurance  Act,  Feb.  15, 
1891  ;  Florida,  Trade  in  Cattle,  June  11, 
1 897 ;  Georgia,  Anti-Monopoly  Act,  Dec.  23, 
1896 ;  Illinois,  Prohibitory  Pools,  Trusts, 
and  Combinations,  Original  Act,  July  11, 
1891,  amended  June  10,  1897;  Indiana, 
Mar.  5,  1897,  General  Anti-Trust;  Iowa, 
General  Anti-Trust,  May  6,  1890  ;  Kansas, 
Mar.  8,  1897,  defines  a  trust  in  five  sec- 

1G8 


tions  ;  Kentucky,  General,  May  20,  1890; 
Louisiana,  General  went  into  effect  July  7, 
1892  ;  Maine,  General,  Mar.  7,  1889  ;  Mich- 
igan, became  a  law  July  1,  1889;  Minne- 
sota, April  20,  1891  ;  Mississippi,  Part  of 
the  Code  of  the  General  St.  Laws  of  Mis- 
sissippi adopted  in  1892,  and  amended 
March  11,  1896;  Missouri,  Original  Act, 
April  2,  1891,  revised  under  Act  of 
April  11, 1895,  and  revised  again  March  24, 
1897  ;  Montana,  Annotated  Code  of  1895, 
sees.  321-325  ;  Nebraska,  Act  of  April  8, 
1897;  New  Mexico,  Feb.  4,  1891  ;  New 
York,  May  7,  1897 ;  North  Carolina, 
March  11,  1889;  North  Dakota,  March  9, 
1897;  Oklahoma,  Dec.  25,  1890;  South 
Carolina,  Feb.  25,  1897;  South  Dakota, 
March,  1,  1897  ;  Tennessee,  April  6,  1889 
amended  March  30,  1891  ;  Texas,  Origi- 
nal Act,  March  30, 1889,  amended  April  30, 
1895  ;  Utah,  March  9,  1896  ;  Washington, 
Con.,  Art.  XII  sec.  22,  and  also  Act  of 
March  21,  1895,  Session  Laws,  1895, 
chap,  cxlviii. ;  Wisconsin,  April  27,  1897. 
(See  "  Biography  of  Commercial  Trusts," 
by  Wm.  H.  Winters,  Librarian  of  the 
N.  Y.  Law  Institute  in  1890.) 


CHAP.  V.J    LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  122 

example  of  the  statutes  above  referred  to,  attention  is  called  to  the 
provisions  of  the  New  Jersey  Act,  which  reads  as  follows : 

"  The  certificate  of  incorporation  may  also  contain  any  provision 
which  the  incorporators  may  choose  to  insert  for  the  regulation  of  the 
business  and  for  the  conduct  of  the  affairs  of  the  corporation,  and  any 
provision  creating,  defining,  limiting,  and  regulating  the  powers  of  the 
corporation,  the  directors,  and  the  stockholders  or  any  class  or  classes 
of  stockholders."  1    ' 

Without  such  statutory  authority  State  officials  are  unquestion- 
ably justified  in  refusing  to  allow  articles  of  incorporation  to  be 
filed  containing  such  clauses  as  are  here  referred  to.2 

The  Court  of  Appeals  of  New  York  in  an  early  case,  commenting 
upon  the  legal  effect  of  the  insertion  of  provisions  in  the  articles 
not  authorized  by  the  incorporation  act,  spoke  as  follows : 

"  The  want  of  authority  for  this  provision  would  not  affect  the 
validity  of  the  corporation.  The  articles  must  contain  the  statements 
affirmatively  required  by  the  act,  because  those  statements  constitute 
the  conditions  precedent  to  the  right  of  the  company  to  become 
incorporated.  If  unauthorized  provisions  are  added,  all  the  acts  done 
pursuant  to  such  provisions  will  be  void,  but  until  the  company  is 
proceeded  against  for  abuse  of  its  franchises  its  rights  as  a  corporation 
will  not  be  affected  by  such  unauthorized  provisions."  3 

The  more  modern  view  in  regard  to  such  matters  is  that  where 
State  officials  are  either  expressly  or  impliedly  empowered  to  pass 
upon  the  validity  of  articles  of  incorporation  submitted  to  them 
with  a  view  to  filing  in  their  office,  the  approval  of  such  State 
official  once  obtained  renders  such  clauses  as  are  here  referred  to 
valid  as  against  all  but  the  State,  even  when  their  insertion  in  the 
articles  is  not  expressly  authorized.4 

§  122.  Liability  of  Stockholders  for  Debts  of  the  Corporation.  — 
The  general  subject  of  stockholders'  liability  may  be  best  dis- 
cussed under  three  heads:  (a)  Liability  for  unpaid  stock  subscrip- 
tions; (5)  Double    liability  as   established   by  statute  in  certain 

1  New  Jersey  Session  Laws  of  1896,  8  Eastern  Plank  Road  Co.  v.  Vaughan, 
chap.  185,  sec.  8,  subdivision  7.  14  N.  Y.  .r>.r>l. 

2  In  re   Stevedores'  Beneficial  Ass'n,         4  See  ante,  sec.  6. 
14  Pliila.  Pa.  130;  see  ante,  sec.  5. 

1G9 


§122   INCORPORATION  AND  ORGANIZATION  OP  CORPORATIONS.    [PART  I. 

States ;  (c)  Special  liability  as  established  by  statute  in  certain 
States. 

(a)  Liability  for  unpaid  stock  subscription.  The  statutes  which 
exist  in  nearly  every  Commonwealth  in  the  Union  making  stock- 
holders liable  for  unpaid  stock  subscriptions  are  merely  declaratory 
of  the  common  law.1  The  liability  of  stockholders  of  corporations 
for  unpaid  stock  subscriptions  with  reference  to  creditors  is  often- 
times confused  with  their  liability  to  the  corporation  itself.  The 
latter  liability  is  directory  and  the  right  to  enforce  it  may  be 
waived  by  the  corporation.  In  the  absence  of  such  waiver  the 
subscribing  stockholders  are  bound  by  the  contract  of  subscription 
to  pay  the  full  value  of  their  shares  in  such  instalments  and  in 
such  manner  as  may  be  prescribed  by  the  laws  of  the  State  or  by- 
laws of  the  corporation.  In  such  cases  the  liability  may  be  enforced 
by  the  ordinary  remedies.  The  corporation  usually  has  a  lien 
upon  the  stock,  and  may  sell  the  same  in  satisfaction  of  the  debt, 
and  may  collect  the  deficiency,  if  any,  by  action  against  the  delin- 
quent stockholders. 

On  the  other  hand,  as  the  corporation  is  a  legal  entity  distinct 
from  the  stockholders  who  constitute  it,  no  debts  or  obligations 
incurred  by  it  can,  in  the  absence  of  a  direct  statutory  provision, 
impose  any  lawful  liability  upon  the  stockholders.  But  in  equity, 
under  what  is  termed  the  "  trust  fund  doctrine,"  the  debts  of  the 
stockholders  to  the  corporation  are  regarded  as  equitable  assets  of 
the  corporation  and  may  be  reached  by  the  creditors  if  the  legal 
assets  prove  insufficient.  This  trust  fund  doctrine  derives  its  main 
support  at  the  present  time  from  the  Supreme  Court  of  the  United 
States,  but  it  has  secured  recognition  in  many  jurisdictions. 

As  stated  in  Sanger  v.  Upton,2  "  The  capital  stock  of  an  incor- 
porated company  is  a  fund  set  apart  for  payment  of  its  debts.  It 
is  publicly  pledged  to  those  who  deal  with  the  corporation  for  their 
security.  Unpaid  stock  is  as  much  a  part  of  this  pledge,  and  as 
much  a  part  of  the  assets  of  the  company  as  the  cash  which  has 
been  paid  in. 

"  The  stockholders  thus  become  individually  liable  for  the  debts 
of  the  corporation,  to  the  extent  of  the  unpaid  balance  on  their 
stock.  They  are  also  in  some  States  subject  to  other  statutory 
liabilities  hereinafter  set  forth.  The  statutory  remedy  is  usually 
by  equitable  action,  but  in  some  States   by  an  action  at  law. 

1  Taylor  v.  Cummings,  127  Fed.  108.  2  91  U.  S.  60. 

170 


CHAP.  V.]  LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  122 

Under  nearly  all  such  statutory  provisions,  the  liability  of  stock- 
holders is  intended  merely  as  a  secondary  security  for  creditors 
in  case  the  assets  of  the  corporation  are  insufficient  to  meet  its 
debts,  but  in  special  cases  stockholders  may  be  made  parties 
defendant  in  an  original  action,  and  if  they  are  obliged  to  pay  any 
debt  of  the  corporation  they  may  bring  an  action  against  the  cor' 
poration  for  the  amount  so  paid,  and  are  usually  entitled  also 
to  exact  contribution  from  the  other  stockholders."' 

The  only  other  questions  which  are  of  practical  importance  in 
connection  with  the  present  subject  may  be  restricted  to  two  classes  : 
one  relates  to  the  liability  for  unpaid  stock  subscriptions  to  cred- 
itors as  between  the  transferor  and  the  transferee,  and  the  other  re- 
lates to  the  liability  to  creditors  of  pledgees  and  trustees  of  stock. 

With  reference  to  the  first  question  it  may  be  said  that  the 
question  depends  upon  the  law  of  the  State  in  which  the  stock- 
holder may  reside  and  in  which  action  may  be  brought.1  In  most 
States  transferors  of  stock  are  not  subject  to  stockholders'  liability, 
and  are  thereafter  released  from  liability  for  assessments  made  by 
the  corporation.2 

In  the  absence  of  statutory  provision  to  the  contrary,  a  bona  fide 
transfer  of  stock  perfected  on  the  books  of  the  corporation,  dis- 
charges the  transferor  from  any  further  liability  either  to  the 
corporation  or  to  creditors  for  calls  made  after  the  transfer  and  for 
calls  made  prior  thereto,  and  the  transferee  takes  his  place  and 
becomes  liable  for  calls  made  after  the  transfer  but  not  for  calls 
made  before.3  The  distinction  which  clearly  obtains  between  one 
who  holds  his  stock  by  transfer  and  one  who  is  an  original  sub- 
scriber to  the  stock  of  the  corporation,  must  be  carefully  noted. 
The  former  may  in  good  faith  discharge  himself  from  liability  for 
unpaid  instalments  by  due  transfer  of  his  shares,  while  the  latter 
cannot  obtain  immunity  in  this  way.  The  subscriptions  for  stock 
and  the  acceptance  of  a  certificate  for  the  shares  constitute  a  con- 
tract between  the  subscriber  and  the  corporation  by  which  he 
engages  to  pay  the  remaining  instalments  on  demand  from  the 
corporation.  From  this  agreement  the  subscriber  cannot  recede 
without  the  consent  of  the  corporation.4     In  some  of  the  States 

1  Glenn  v.  Hunt,  120  Mo.  330;  25  also  Sigua  Iron  Co.  v.  Brown,  271  N.  Y. 
8.  W.  181.  488;  64  N.  E.  194. 

2  M   L.  T.  Co.  v.  Ward,  13  Ohio,  120.  4  Hood  v.  McNaughton,  54  N.  J.  Law, 

3  Pullman  v.  Upton,  96  U.  S.  328 ;  see  425;  24  Atl.  497. 

171 


§  122    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

this  matter  is  regulated  by  statute.  In  Maine,  Massachusetts, 
North  Carolina,  West  Virginia,  the  original  subscriber  alone  is 
liable.  In  Illinois,  Iowa,  Nebraska,  New  Hampshire,  Rhode 
Island,  and  Virginia  the  original  subscriber  remains  liable  as  well 
as  the  transferee.1  In  Georgia,  Ohio,  Tennessee,  and  Oregon  the 
original  subscriber  is  liable  upon  default  in  payment  by  the  trans- 
feree. In  Mississippi  and  Wisconsin  the  original  subscriber 
remains  liable  for  the  debts  contracted  before  his  ownership  or 
those  contracted  thereafter.  In  California,  Indiana,  Kentucky, 
Maryland,  Michigan,  Minnesota,  New  York,  and  Tennessee  the 
original  subscriber  remains  liable  for  the  debts  of  the  corporation 
contracted  during  his  ownership  and  not  for  debts  contracted  after 
such  transfer.  In  Alabama,  Arizona,  Arkansas,  Colorado,  Con- 
necticut, Delaware,  District  of  Columbia,  Florida,  Idaho,  Kansas, 
Louisiana,  Massachusetts,  Minnesota,  Missouri,  Montana,  New 
Jersey,  North  Dakota,  Oklahoma,  Pennsylvania,  South  Carolina, 
South  Dakota,  Texas,  Utah,  Vermont,  Washington,  and  Wyoming 
upon  the  transfer  of  stock  the  transferee  becomes  liable  for  all 
debts  contracted  both  before  and  after  transfer,  and  the  transferor 
is  discharged  in  all  these  States  as  to  debts  contracted  after  such 
transfer,  and  in  some  of  these  States  from  liability  for  debts  con- 
tracted before  such  transfer  as  well.2 

Turning  now  to  the  question  of  liability  of  pledgees  and  trustees 
of  stock,  it  may  be  said  that  unless  protected  by  statute,  as  is  the 
case  in  New  York,  Missouri,  California,  and  Michigan,  the  pre- 
vailing rule  seems  to  be  that  pledgees  and  trustees  of  stock  are 
liable  thereon  to  the  extent  of  the  unpaid  portion  of  the  stock  held 
by  them.3 

On  the  other  hand  the  Supreme  Court  of  the  United  States  has 
enunciated  a  different  doctrine  to  the  effect  that  a  pledgee  of  stock 
taken  as  collateral  security  or  as  a  loan  is  not  subject  to  personal 
liability  for  the  debts  of  the  corporation  imposed  on  other  share- 
holders unless  he  has  either  become  the  owner  of  the  shares  in  fact 
or  has  held  himself  out  to  be  the  owner,  and  thereby  estopped  him- 
self from  denying  his  personal  liability  as  such.4 

i  White  v.  Greene  (Iowa),   70  N.  W.  65  S.  W.  630 ;  Germania  National  Bank 

182;  Sprague  v.  Bank,  172  111.  149;  50  v.  Case,  99  U.  S.  628;  McMahon  v.  Macy, 

N.  E.  190.  51  N.  Y.  155. 

2  Van  Cott  v.  Van  Brunt,  82  N.  Y.  535.  *  Rankin  v.  F.   I.    T.   &   D.  Co.,    189 

3  Hole  v.  Walker,  31   la.  344;  Union  U.  S.  242. 
Savings  Ass'n  v.  Seligman,  92  Mo.  635 ; 

172 


CHAP.  V.]   LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.   ^1-2 

(b)  Double  liability  as  established  by  statute  in  certain  States. 
What  is  known  as  the  "  double  liability  "  of  stockholders  for  debts 
of  the  corporation  which  existed  formerly  in  a  large  number  of 
States,  has  now  been  so  far  removed  by  statute  that  it  exists  at 
the  present  time  in  the  case  of  ordinary  business  corporations  in 
only  two  States,  to  wit,  California  and  Minnesota.1  In  the  last- 
mentioned  State  it  does  not  exist  in  the  case  of  corporations 
organized  exclusively  for  the  purpose  of  carrying  on  a  manufac- 
turing, mining,  or  mechanical  business.2 

(c)  Special  liability  as  established  by  statute  in  certain  States. 
Stockholders  at  common  law  were  not  liable  for  debts  of  the 
corporation  beyond  their  liability  for  unpaid  stock  subscriptions.8 
Personal  responsibility  of  stockholders  is  inconsistent  with  the 
conception  of  corporate  liability  at  common  law,  and  for  this 
reason,  if  it  exists  at  all,  must  rest  upon  some  positive  statute.4 

The  particular  liability  under  consideration  here  arises  by 
reason  of  the  existence  of  statutory  provisions  that  may  be  stated 
as  follows :  Liability  of  incorporators  as  partners  through  failure 
to  legally  organize  the  corporation.  In  Florida,  Iowa,  Minnesota, 
Nebraska,  and  Wisconsin  stockholders  are  individually  liable  by 
statute  for  failure  to  comply  with  certain  prescribed  regulations  in 
regard  to  organization  and  publicity.5  In  a  few  of  the  States  the 
courts  construe  the  liability  of  incorporators  where  they  have  failed 
to  legally  organize  the  corporation,  not  as  partners  at  all.  This 
on  the  ground  that  no  such  relationship  or  liability  is  contemplated 
by  the  incorporators,  and  that  the  creditors'  only  remedy  is  against 
the  officers  and  agents  who  actually  made  the  contract.6 

In  Indiana,  Massachusetts,  Michigan,  New  York,  North  Dakota, 

1  The  liability  may  possibly  still  exist  N.  J.  Law,  52 ;  Ciar  v.  Iglehart,  3  O.  St. 
in  Indiana  and  Kansas  ;  see  pages 306, 321.  457. 

2  Sacramento  Bank  v.  Pacific  Bank,  5  Kaiser  v.  Bank,  56  Iowa,  104;  8  N.  \V. 
124  Cal.  147;  56  Pac.  787;  Danielson  v.  772;  Fuller  v.  Rowe,  57  N.  Y.  23 ;  Connor 
Yoakum,  116  Cal.  382  ;  48  Pac.  322  ;  N.  H.  v.  Abbot,  35  Ark.  366  ;  Johnson  v.  Corser, 
H.  N.  Co.  v.  Company,  142  Mass.  349  ;  7  34  Minn.  355  ;  25  N.  W.  799  ;  Hurt  v. 
N  E  773  •  Bates  v.  Day,  198  Pa.  St.  513  ;  Salisbury,  55  Mo.  310  ;  Bergeron  v.  Hobbs, 
48  Atl.  407  ;  Whitman  v.  Bank,  176  U.  S.  96  Wis.  641  ;  71  N.  W.  1056;  Clegg  v. 
559;  Willis  v.  Mabon,  48  Minn.  140;  Company,  61  Iowa,  121;  15  N.  W.  365; 
50  N.  W.  1110  ;  Marshall  v.  Sherman,  148  Slocum  v.  Head,  105  Wis.  431  :  81  N.  W. 
N  Y.  9  ;  42  N.  E.  419  ;  Tuttle  v.  National  673. 

Bank    161  111.  497;  44  N.  E.  984.  ,;  Ward    v.    Brigham,    127    Mass.   24; 

a  Toner  v.  Faulkerson,   125  Ind.  224;  Rutherford  v.  Hill,  22  Ore.  218;  25  Pac 

25  N    E    218-   Hood  v.  McNaughton,  54  546;   Canfield  v.  Gregory,  66  Conn.  9;  33 

N.  J.  L.  425 ;  24  Atl.  497.  Atl.  536  ;  Bank  v.  Hall,  35  O.  St.  158. 

*  S   L.  C  N.  Bank  v.  Hendrickson,  40 

173 


§  123    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.     [PART  I. 

Oklahoma,  Pennsylvania,  South  Dakota,  Tennessee,  and  Wiscon- 
sin they  are  liable  for  the  wages  of  employees  of  the  corporation. 
In  New  York,  in  what  is  known  as  full  liability  corporations, 
stockholders  are  liable  for  debts  of  the  corporation  in  full.  In 
Arkansas,  Delaware,  Iowa,  Maine,  Michigan,  Minnesota,  New 
Hampshire,  New  Jersey,  North  Carolina,  Vermont,  and  West 
Virginia  stockholders  are  individually  liable  to  the  extent  of 
any  part  of  the  corporate  assets  refunded  to  them  respectively. 
In  Idaho,  Minnesota,  North  Carolina,  and  South  Carolina  stock- 
holders are  individually  liable  for  any  fraud  or  misconduct  on 
their  part.  In  Arizona,  Delaware,  Iowa,  and  Nebraska  stock- 
holders are  personally  liable  for  the  debts  of  the  corporation, 
unless  they  limit  this  liability  by  provision  therefor  in  the 
charter.1 

§  123.  Statutory  Liability  of  Directors. —  With  the  exception 
of  a  very  limited  number  of  States,  all  of  the  Commonwealths 
have  statutes,  either  civil  or  penal,  imposing  liability  upon 
directors  for  certain  designated  acts  of  misfeasance  or  non- 
feasance. These  statutes  are  diverse  both  in  scope  and  charac- 
ter. It  will  only  be  possible  in  this  connection  to  enumerate 
without  discussion  the  several  liabilities  thus  imposed  upon 
directors. 

(1)  For  illegal  declaration  of  dividends.2 

(2)  For  illegal  withdrawal  of  capital  stock.3 

(3)  For  making  false  reports,  or  keeping  false  books  of 
account,  or  making  false  representations.4 

1  Van  Pelt  v.  Gardner,  54  Neb.  701 ;  Pittsburg,  etc.  R.  R.  Co.  v.  Allegheny  Co., 
75  N.  W.  974.  63  Pa.  St.  126. 

2  Such  liability  exists  in  Alaska,  Ar-  3  Such  liability  exists  in  Alaska,  Cali- 
kansas,  California,  Colorado,  Connecticut,  fornia,  Connecticut,  Georgia,  Idaho,  Iowa, 
Delaware,  District  of  Columbia,  Florida,  Mississippi,  Montana,  Nevada,  New  Jersey, 
Georgia,  Idaho,  Illinois,  Indiana,  Iowa,  New  Mexico,  North  Carolina,  Oklahoma, 
Kansas,  Kentucky,  Maine,  Maryland,  Mas-  Oregon,  South  Dakota,  Washington,  and 
sachusetts,   Michigan,  Minnesota,   Missis-  West  Virginia. 

sippi,      Missouri,      Montana,     Nebraska,  4  Such    liability   exists    in    Delaware, 

Nevada,   New   Hampshire,  New   Mexico,  District  of  Columbia,  Indiana,  Kentucky, 

New  Jersey,  New  York,  North  Carolina,  Montana,  Nevada,  New  Hampshire,  New 

North    Dakota,    Ohio,     Oklahoma,    Ore-  York,  Rhode  Island,  South  Carolina,  Ten- 

gon,  Pennsylvania,   Rhode  Island,  South  nessee,  and  Virginia.     See  Huntington  v. 

Dakota,  Tennessee,  Texas,  Vermont,  Vir-  Attrill,    118   N.    Y.  365;    23   N.  E.  544; 

ginia,  Washington,  West  Virginia,  Wis-  Gidding  v.  Holter,  19  Mont.  263;  48  Pac. 

consin,  and   Wyoming.     See  Dykman   v.  8;  Felker  v.  Company,  148  Mass   226;  19 

Keeney,   160  N.  Y.  677;  54  N.  E.  1090;  N.  E  225;  Githers  v,  Clarke,  158  Pa.  St. 

Chamberlain  v.  Company,  118  Mass.  552;  616;    28    Atl.    232;    Thompson    Houston 

174 


CHAP.  V.J    LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  123 

(4)  For  failure  to  file  annual  reports.1 

(5)  For  violation  of  express  statutes.2 

(6)  For  authorizing  the  contraction  of  debts  in  excess  of  the 
amount  limited  by  law.3 

(7)  For  contracting  debts  before  statutory  requirements,  such 
as  subscriptions  for  stock,  either  in  whole  or  in  part,  publication 
of  articles,  etc.,  have  been  complied  with.4 

(8)  For  failure  to  file  certificates  as  to  reduction  of  capital 
stock.5 

(9)  For  false  oaths  to  articles  of  incorporation.6 

(10)  For  making  loans  to  directors.7 

(11)  For  making  loans  to  stockholders.8 

(12)  For  loss  of  funds  through  negligence.9 

(13)  For  failure  to  display  name  or  itemized  accounts  at 
domiciliary  office.10 

(14)  For  failure  to  allow  inspection  of  books.11 


Electric  Co.  v.  Murray,  60  N.  J.  L.  20; 
37  Atl.  443. 

1  Such  liability  exists  in  Colorado, 
Michigan,  Montana,  New  Hampshire,  New- 
York,  and  Oklahoma.  See  Garrison  v. 
Howe,  IT  N.  Y.  458;  Van  Etten  v.  Eatou, 
19  Mich.  187;  Shanklin  v.  Gray,  111  Cal. 
88 ;  43  l'ac.  399  ,  Cincinnati  Cooperage  Co. 
v.  O'Keeffe,  120  N.  Y.  603;  24  N.  E.  993  ; 
Wallace  w.  Walsh,  125  N.  Y.  26  ;  25  N.  E. 
1076  ;  Glenn  Falls  Paper  Co.  v.  White,  18 
Hun  (N.  Y.),  214;  Bolen  v.  Crosby,  49 
N.  Y.  183  ;  Tabor  v.  Bank,  62  Fed.  383  ;  10 
C.  ('.  A.  429 

2  Such  liability  exists  in  Arkansas, 
Idaho,  Indiana,  Kentucky,  Michigan, 
North  Dakota,  and  South  Dakota.  See 
Patterson  v.  Stewart,  41  Minn.  84 ;  42 
N.  W.  926  ;  Loverin  v.  McLaughlin,  161 
111.  417  ;  44  N.  E.  99  ;  Clow  v.  Brown,  150 
Ind.  185;  48  N.  E.  1034;  49  N.  E.  1057; 
Gunther  v.  Company,  21  Ky.  L.  Hep.  655  ; 
52  S.  W.  931. 

'■'■  Such  liability  exists  in  California, 
Illinois,  Idaho,  Mississippi,  Montana,  New 
Hampshire,  New  Mexico,  North  Dakota, 
Oklahoma,  Rhode  Island,  Tennessee,  Ver- 
mont, and  Wyoming.  See  Tradesmen 
Pub.  Co.  v.  Company,  95  Tenn.  634;  32 
S.  W.  1097  ;  Lewis  v.  Montgomery,  145 
111.  30 ;  33  N.  E.  880 ;  Horuor  v.  Henning, 
93  U.  S.  228. 


4  Such  liability  exists  in  Illinois,  Ohio, 
Vermont,  and  Wisconsin.  See  Kent  v. 
Clark,  181  111.  237  ;  54  N.  E.  967;  Clow  v. 
Brown,  150  Ind.  185  ;  48  N.  E.  1034;  49 
N.  E.  1057  ;    Hequembourg  v.   Edwards, 

155  Mo.  514;  55  S.  W.  490;  Loverin  v. 
McLaughlin,  161  111.  417  ;  44  N.  E.  99. 

5  Such  liability  exists  in  Indiana,  New 
Jersey,  and  North  Carolina. 

6  Such  liability  exists  in  Massachusetts. 

7  Such  liability  exists  in  Massachusetts 
and  New  York.     See  Thacher   v.  King, 

156  Mass.  490;  31  N.  E.  648;  Connecticut 
River  Bank  v.  Fiske,  62  N.  II.  178;  Wit- 
ters v.  Sowles,  31  Fed.  1. 

8  Such  liability  exists  in  District  of 
Columbia,  Mississippi,  Missouri,  New 
Hampshire,  New  York,  Oklahoma,  Rhode 
Island,  and  Tennessee.  See  Working- 
men's  Banking  Co.  v.  Rautenberg,  103 
111.  460;  Bank  Commissioners  v.  Bank  of 
Buffalo,  6  Paige  (N.  Y.),  497. 

9  Such  liability  exists  in  Minnesota. 
See  Horn  Silver  Mining  Co.  v.  Ryan,  42 
Minn.  196  ;  44  N.  W.  56;  M.  F.  N.  Hank 
v.  Harper,  61  Minn.  375;  63  N.  W.  1079. 

"|  Such  liability  exists  in  California 
and  New  Jersey.  See  Eyre  v.  Harmon, 
92  Cal.  580;  28  Pac.  779  ;  Hall  v.  Toman, 
119  Cal.  35;  51  l'ac.  546. 

ii  Such  liability  exists  in  New  Jersey. 

175 


5 


§124    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

(15)  For  embezzlement  of  officers.1 

(16)  For   failure   to  make   certificate   of  payment   of  capital 

stock.2 

(17)  For  making  false  appraisal  as  to  value  of  property  taken 
an  exchange  for  corporate  stock.3 

(18)  For  not  producing  list  of  stockholders  at  the  annual 
•election  of  directors.4 

(19)  For  permitting  an  illegal  issue  of  stock  or  bonds. 

(20)  For  making  prohibited  transfers  of  property.6 

(21)  For  issuing  stock  as  full  paid  when  less  than  its  par 
value  is  paid  thereon.7 

§  124.  Extension  of  Corporate  Existence.  —  In  order  to  extend 
corporate  existence  special  legislative  action  is  necessary.8  In 
nearly  all  of  the  States  statutes  exist  providing  that  for  a  period 
of  three  years  after  the  term  of  existence  limited  by  its  charter 
has  expired,  the  corporation  shall  continue  to  exist  for  the  pur- 
pose of  winding  up  its  affairs.  Express  power  to  extend  cor- 
porate existence  is  granted  in  twenty-five  of  the  Commonwealths. 

Where  corporations  are  permitted  under  their  charter  to  make 
their  term  of  existence  perpetual,  this  right  to  extend  corporate 
•existence  is  of  very  little  practical  importance.  As,  however, 
perpetual  existence  is  permitted  in  only  twenty-seven  of  the 
States,  it  is  a  question  of  much  practical  importance  in  the  re- 
mainder. It  has  been  held  by  at  least  one  court  of  excellent 
repute  that  where  the  power  of  amendment  of  the  charter  is 
unlimited,  even  though  it  does  not  refer  specifically  to  the  right 
to  extend  corporate  existence,  it  may  nevertheless  be  used  for 
that  purpose.10 

When  so  extended,  it  must  pay  an  organization  tax  if  the  law 

1  Such  liability  exists  in  Colorado,  New  5  Such  liability  exists  in  North  Dakota 
Mexico,  and  Pennsylvania.  See  Scott  v.  and  New  York.  See  Clow  v.  Brown,  150 
Depeyster,    1    Edw.    Ch.    (N.    Y.)    513 ;     Ind.  185 ;  48  N.  E.  1034. 

Wallace  v.  Bank,  89  Tenn.  630 ;  13  S.  W.  6  Such  liability  exists  in  New  York. 

48  ;  Ouderkirk  v.  Bank,  119  N.  Y.  263  ;  23  7  Such  liability  exists  in  North  Dakota. 

N.  E.  875.  See  Schley  v.  Dixon,  24  Ga.  273. 

2  Such  liability  exists  in  Colorado,  8  People  v.  Pfister,  57  Cal.  532 ;  Attor- 
Delaware,  Maryland,  New  Hampshire,  ney-General  v.  Perkin,  73  Mich.  303; 
North  Carolina,  and  Rhode  Island.  Smith   v.   Company,  58    N.  J.   Eq.    331; 

3  Such  liability  exists  in  Connecticut.  43  Atl.  567;  People  v.  Greene,  116  Mich. 
See  Hequembourg  v.  Edwards,  155  Mo.  505  ;  74  N.  W.  714  ;  Frostberg  Mining  Co. 
514;  56  S.  W.  490;  F.  C.  T.  Co.  v.  Floyd,  v.  Company,  81  Md.  28;  31  Atl.  698. 

47  O.  St.  525;  26  N.  E.  110.  10  People   v.   Greene,    116    Mich.    505; 

4  Such  liability  exists  in  Delaware  and     74  N.  W.  714. 
_New  Jersey. 

176 


CHAP.  V.]    LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §125 

so  provides,  even  though  existence  is  extended  under  guise  of  an 
amendment.1 

§  125.  Taxation  of  Domestic  Corporations.  —  Legislative  control 
over  domestic  corporations  is  exercised  by  means  of  the  un- 
questioned right  of  such  legislatures  to  impose  a  tax  upon 
their  organization  and  annually  thereafter  in  the  form  of  a  fran- 
chise tax.  The  latter  may  be  defined  to  be  a  tax  levied  by  the 
State  upon  the  capital  of  a  corporation  in  return  for  the  privilege 
of  exercising  its  corporate  powers  within  the  limits  of  the  State 
levying  such  tax.  On  the  general  subject  of  franchise  tax  the 
New  York  Court  of  Appeals  in  a  recent  case2  spoke  as  follows : 

"The  system  of  taxation  in  this  State  is  so  complicated  as  to 
invite  mistakes  on  the  part  of  those  who  are  called  upon  to  enforce 
the  law.  In  some  instances  the  tax  is  laid  upon  property  and  in 
others  upon  rights  and  privileges  connected  with  the  property. 
There  is  direct  taxation  of  real  estate  and  of  some  personal  property, 
indirect  taxation  of  other  personal  property,  taxation  of  the  capital 
stock  of  corporations  and  of  their  franchises,  taxation  upon  the  right 
of  succession  to  the  property  left  by  decedents,  and  the  like.   .  .  . 

"  There  is,  first,  an  organization  tax,  payable  to  the  State,  which  is 
imposed  but  once,  and  is  exacted  for  the  privilege  of  becoming  a  cor- 
poration. Next,  there  is  a  tax  upon  the  real  estate  owned  by  the 
corporation  in  this  State,  which  is  assessed  the  same  as  if  it  were 
owned  by  an  individual.  The  personal  property  of  the  corporation 
is  not  directly  taxed,  but  its  capital  stock  and  surplus  after  deduct- 
ing the  assessed  value  of  its  real  estate  and  making  some  other 
deductions,  is  assessed  at  its  actual  value.  Finally,  there  is  a  fran- 
chise tax  on  corporations  which  is  payable  annually  to  the  State, 
«  computed  upon  the  basis  of  the  amount  of  its  capital  stock  employed 
within  this  State.'  This  is  not  a  tax  upon  property,  although  it  is 
measured  by  the  value  of  property,  but  upon  the  right  of  a  corpora- 
tion to  exist  and  exercise  the  powers  granted  by  its  charter.  These 
forms  of  taxation  do  not  all  rest  upon  the  same  principle.  The 
organization  tax  is  in  the  nature  of  a  license  fee  for  the  right  to 
become  a  corporation.  The  tax  upon  real  estate  is  a  direct  tax  upon 
real  property,  while  the  franchise  tax  is  not  laid  upon  property  at 
all,  but  is  imposed  upon  the  corporation  for  the  privilege;  of  currying 
on  business  in  this  State  and  exercising  the  corporate  franchises 
granted  by  the  State.     The  distinction  between  a  tax  upon  the  prop- 

i  Nl.  Lead   Co.  v.  Dickinson   (N.  J.),  a  People exrel.  etc.  v.  Knight,  174  N.Y. 

57  All.  138.  475;  67  N.  E.  65. 


12 


177 


§  126    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  1^ 

erty  of  a  corporation  and  a  franchise  tax,  although  well  established 
and  of  great  importance,  is  easily  overlooked,  as  we  find  from  our 
own  experience." 

"With  reference  to  organization  taxes  there  can  be  no  question 
raised  as  to  the  constitutionality  of  such  taxation.1 

The  constitutionality  of  franchise  taxes  being  imposed  upon 
the  franchise  as  a  species  of  property  is  clearly  within  the  con- 
stitutional powers  of  State  legislatures.2  In  all  of  the  States  and 
Territories,  with  the  exception  of  Alaska,  Arkansas,  District  of 
Columbia,  Georgia,  Indian  Territory,  and  Oklahoma,  graduated 
organization  taxes  are  imposed  upon  domestic  corporations. 

With  respect  to  annual  franchise  taxes  these  are  imposed  only 
in  the  States  of  Alabama,  Colorado,  Delaware,  Maine,  Massachu- 
setts, New  Jersey,  New  York,  North  Carolina,  Ohio,  Oregon, 
Pennsylvania,  South  Carolina,  Texas,  Vermont,  Washington,  and 
West  Virginia.  In  Alabama,  Colorado,  Maine,  North  Carolina, 
Oregon,  South  Carolina,  Texas,  Vermont,  Virginia,  Washington, 
and  West  Virginia  the  tax  is  levied  upon  the  total  amount  of 
authorized  capital  stock,  irrespective  of  the  amount  that  may 
have  been  issued  and  outstanding. 

In  Delaware,  Massachusetts,  New  Jersey,  and  Ohio  the  tax 
is  graded  according  to  the  amount  of  capital  stock  issued  and 
outstanding.  In  New  York  the  tax  is  determined  largely  by  the 
dividends  on  the  par  value  of  the  amount  of  capital  stock 
authorized.  It  is  also  graded  on  the  amount  of  capital  stock 
employed  within  the  State. 

§  126.  Regulation  of  the  Right  of  Consolidation.  —  To  accomplish 
a  valid  consolidation  of  two  corporations  tbat  are  organized  under 
the  laws  of  the  same  or  of  different  States,  legislative  authority  is 
necessary.  It  is  not  over-stating  the  matter  to  say  that  legisla- 
tive authority  is  as  necessary  for  the  accomplishment  of  a  valid 
consolidation  of  existing  corporations  as  it  is  to  the  creation  of  a 
corporation  in  the  first  instance.3     Any  attempt,  therefore,  on  the 

1  United   Horseshoe  Works  v.  Lewis,  2  Society  for  Savings  v.  Coit,  6  Wall. 

1  Abb.  (U.  S.)  518;  Fed.  Cas.  No.  14365;  (U.  S.)  594;  Tidewater  Pipe  Line  Co    v. 

Combined  Saw  &  Planer  Co.  v.  Flournoy,  Berry,   53    N.   J.    L.    212  ;   21    Atl.    490; 

88  Va.  1029  ;  14  S.  E.  976;  State  v.  Hot-  Attorney-General    v.    Bay   State    Mining 

witt,  17  Mont.  41 ;  41  Pac.  1004;  Hughes-  Co.,  99  Mass.  148. 

dale  Mfg.  Co.  v.  Vanner,  12  R.  I.  491  ;  3  Pearce  v.  Company,  22  How.  (U.  S.) 

Jones  v.  Company,  21  Col.  263;  40  Pac.  441 ;  A.  L.  &  T.  Co.  v.  Company,  157  111. 

457.  641 ;  42  N.  E.  153  ;  Cole  v.  Company,  133 


178 


N.  Y.  164 ;  30  N.  E.  847. 


CHAP.  V.]  LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  126 

part  of  corporations  to  consolidate  in  the  absence  of  any  statute 
permitting  consolidation  will  not  be  recognized  by  the  courts.1 
Where  power  is  granted  to  corporations  to  consolidate  it  is  usually 
done  by  means  of  a  general  statute.  Such  statutes  exist  in  a 
comparatively  small  number  of  the  Commonwealths,  the  legis- 
latures of  the  remaining  States  evidently  looking  upon  consolida- 
tion as  a  form  of  a  trust  and  therefore  to  be  restricted.  Some  of 
the  statutes  limit  the  right  of  consolidation  to  corporations  of  the 
same  character  or  engaged  in  the  same  line  of  business.3  Where 
the  right  to  consolidate  existed  at  the  time  the  corporation  was 
created  it  can  ordinarily  be  affected  by  vote  of  a  majority  of  the 
stockholders  against  the  dissent  of  the  minority.4  However,  in 
the  absence  of  such  authority  conferred  prior  to  the  incorporation 
of  a  company,  it  has  been  held  that  consolidation  cannot  be 
affected  against  the  dissent  of  the  minority  stockholders.5 

When  it  comes  to  the  matter  of  consolidation,  creditors  have  no 
right  to  intervene  for  the  purpose  of  preventing  such  a  consolida- 
tion providing  the  same  is  undertaken  under  legislative  authority. 
The  remedy  of  creditors  in  such  cases  is  to  proceed  in  equity  with 
a  view  to  subjecting  the  property  of  the  consolidated  corpora- 
tion to  the  payment  of  their  claims.6  Sometimes,  though  not 
always,  when  a  new  corporation  is  formed  by  the  consolidation 
of  a  domestic  corporation  with  a  foreign  corporation,  it  is  required 
to  pay  an  organization  tax,  at  least  upon  so  much  of  the  capital 
stock  as  is  represented  by  the  capitalization  of  that  of  the  consoli- 
dated domestic  corporation.7 

i  Greenville  Warehouse  Press  Co.  v.  Wis.  13  ;  Mowrey  v.  Company,  4  Bissell, 
Company,  70  Miss.  669;  13  So.  879.  78;  Fed.  Cas.  No.  9891. 

a  See   In   re   Prospect   Park  &  Coney  6  People  i>.  Company,  92  N.    Y.   105. 

Island  Railway  Co.,  67  N.  Y.  371.  See  R.  I.  Ry.  Co.  v.  Moffatt,  75  111.  524 ; 

*  Spero  v.  Company,  7  Ind.  369;  N.  D.  Ry.  Co.  v.  Company,  120  Mass.  397. 
Spragne  v.  Company,  90  111.  174.  7  State  v.  Sherman,  22  O.  St.  411  ;  P. 

5  Clearwater  v.  Meredith,  1  Wall.  Co.  v.  Company,  113  U.  S.  296  ;  A.  &  U. 
flj.  S.)  25  ;  K.  &  R.  I.  Ry.  Co.  v.  Marsh,  17     A.  L.  Co.  v.  State,  63  Ga.  2183  ;  contra. 

People  v.  Company,  129  N.  Y.  474;  29 
N.  E.  951. 


170 


§  127    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 


CHAPTER    VI. 
LEGISLATIVE   CONTROL   OVER  FOREIGN  CORPORATIONS. 

§  127.  Extent  of  Legislative  Power  of  the  various  Common-wealths 
over  Foreign  Corporations.  — A  foreign  corporation  may  be  defined 
as  one  created  under  the  laws  of  a  State,  Territory,  government, 
or  country  other  than  that  wherein  it  seeks  to  do  business.1 
With  some  few  exceptions  nearly  all  of  the  Commonwealths  have 
enacted  statutes  prescribing  the  terms  and  conditions  upon  which 
foreign  corporations  may  carry  on  business  within  their  borders. 
Most  of  these  statutes  closely  resemble  each  other  in  character, 
and  generally  look  to  the  attainment  of  the  same  end.  Thus,  for 
example,  in  order  to  give  courts  of  the  foreign  State  jurisdiction 
over  the  foreign  corporation  and  to  secure  proper  protection 
for  such  of  its  citizens  as  may  transact  business  with  the  latter, 
the  statutes  prescribe  that  foreign  corporations  shall  designate 
an  agent  residing  within  the  State  upon  whom  service  of  process 
upon  the  corporation  may  be  served,  and  also  designate  a  place 
of  business  where  it  may  be  found.  Such  provisions  are  unques- 
tionably valid.3 

Again,  most  of  the  acts  require  that  a  certified  or  sworn  copy 
of  the  charter  of  the  foreign  corporation  shall  be  filed  in  certain 
designated  offices,  usually  with  the  Secretary  of  State  and  in  the 
local  recording  office  of  the  county  where  its  principal  place  of 
business  is  to  be  located.  The  object  of  such  enactment  is  to  fur- 
nish easily  accessible  evidence  of  the  existence  of  the  corporation, 
and  to  protect  parties  dealing  with  it  from  fraud  and  imposition.4 

Still  other  States  require  the  filing  of  reports  enumerating  the 
officers,  giving  information  relativ.e  to  the  business  to  be  trans- 
acted within  the  foreign  State  and  as  to  the  financial  condition 

1  Daly  v.  Company,  64  Ind. 1.  *  Evans  v.  Lee,  11  Nev.  194;  D.  F.  Co. 

3  St.   Clair   v.    Cox,    106    U.    S.   356;  v.  Augustine,   5   Wash.  67 ;  31  Pac.  327 ; 

Lafayette    Ins.    Co.    v.   French,  18  How.  Huffman  v.  Company,  13  Tex.    Civ.  Ap. 

(U.  S.)  404.  169  ;  36  S.  W.  306. 

180 


CHAP.  71.]  LEGISLATIVE  CONTROL  OYER  FOREIGN  CORPORATIONS.    §  127 

of  the  corporation.1  The  right  to  transact  business  in  a  foreign 
State  is  a  matter  of  State  comity,  pure  and  simple.  The  recog- 
nition of  a  foreign  corporation  and  enforcement  of  its  contracts 
in  States  other  than  that  of  its  creation  rests  only  on  comity,  and 
any  conditions  governing  the  right  to  transact  business  outside  of 
the  domiciliary  State  of  the  corporation  may  be  imposed  upon  them 
or  they  may  be  entirely  excluded.2  But  the  conditions  imposed 
must  not  be  repugnant  to  the  Constitution  of  the  United  States 
or  to  the  public  policy  of  the  foreign  State  as  evidenced  by  its 
statutory  enactments  and  judicial  decisions,  nor  can  they  be  re- 
pugnant to  rules  of  public  law.3 

In  this  connection  it  may  be  observed  that  foreign  corporations 
cannot  claim  the  protection  of  the  prohibition  of  the  United  States 
Constitution  against  denying  to  citizens  of  any  State  the  privileges 
and  immunities  of  citizens  of  the  several  States.4  Nor  can  they 
claim  the  benefit  of  the  clause  against  denying  to  any  person  equal 
protection  of  the  law.5 

A  State  may  preclude  all  foreign  corporations  not  engaged  in 
interstate  commerce  or  in"  the  employ  of  the  general  government 
from  transacting  business  within  its  limits,  and  the  courts  cannot 
inquire  into  its  reasons  for  so  doing.6  A  State  may  discriminate 
between  foreign  and  domestic  corporations.7  In  short,  the  power 
of  States  over  foreign  corporations  with  respect  to  imposing  con- 
ditions for  doing  business  are  as  broad  as  those  exercised  over 
domestic  corporations.8  Wherever  a  corporation  transacts  its 
business  it  carries  its  charter  with  it,  and  that  becomes  the  law 
of  its  existence  in  the  foreign  State,  for  the  charter  is  the  same 
abroad  as  it  is  at  home.  Whatever  disabilities  are  placed  upon 
the  corporation  at  home  are  ordinarily  equally  binding  upon  it 
abroad,  and  whatever  proper  legislative  control  it  is  subject  to 
must  in  general  be  recognized  and  submitted  to  by  those  who 
deal  with  it  elsewhere.9     The  foregoing  rule  should  be  qualified 

1  Washington  County  Mut.  Ins.  Co.  v.  6  Boyle  v.  Company,  94  U.  S.  541 ; 
Dawes,  6  Gray,  Mass.  376.  Horn  Silver  Mining  Co.  v.  New  York,  143 

2  Pan!  v.  Virginia,  8  Wall.  (U.  S.)  161.  U.  S.  314. 

3  Lafayette  Ins.  Co.  v.  French,  18  How.  7  Ducat  v.  Chicago,  10  Wall.  (U.  S.)  415. 
407;  S.  P.  Ry.  Co.  v.  Denton,  146  U.  S.  8  Orient  Ins.  Co.  v.  Daggs,  173  V.  S. 
201  ;  Am.,  etc.  Christian  Union  v.  Yount,  566. 

101  U.  S.  356.  9  Canada,  etc.  Ry.  v.  Gebherd,  109  l'.  S 

4  Paul  v.  Virginia,  8  Wall.  (U.  S.)  168.     597  ;  Isle  Royale  Land  Corporation  v.  Sec. 
6  P.  C.  S.  M.  &  C.  Co.  v.  Pennsylvania,     of  State,  76  Mich.  162;  43  N.  W.  14. 

125  U.  S.  181. 

181 


§  127   INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

by  the  statement  that  a  foreign  corporation  can  do  no  act  in  a 
foreign  State  which  cannot  be  done  through  the  intervention  of 
a  mere  agent  and  which  is  not  in  contemplation  of  law  the 
direct  act  of  the  corporation  itself.1 

Comity  between  States  authorizes  a  corporation  to  exercise  its 
charter  powers  within  any  State,  but  it  does  not  permit  the  exer- 
cise of  a  power  where  the  policy  of  that  State  distinctly  marked 
by  legislative  enactments  or  constitutional  provisions  forbids  it.2 
It  has  been  well  said  that  "  no  rule  of  comity  will  allow  one 
State  to  charter  corporations  to  operate  in  another  State  unless 
there  is  willingness  on  the  part  of  the  foreign  State  that  it  should 
be  so.  To  hold  otherwise  would  be  to  say  that  the  right  of  one 
State  by  comity  is  superior  to  the  sovereign  will  of  the  other. 
This  involves  the  surrender  of  sovereignty  to  a  rule  of  comity 
and  to  a  matter  of  international  etiquette,  which  no  sovereign 
State  should  for  a  moment  think  of." 3 

A  great  deal  of  litigation  has  arisen  through  the  question 
whether  or  not  foreign  corporations  may  exercise  the  same 
powers  in  a  foreign  State  that  their  charter  authorizes  them  to 
exercise  in  the  domestic  State.  It  has  been  held  that  foreign  cor- 
porations cannot  exercise  outside  of  the  domicile  State  powers 
which  their  own  charters  do  not  permit  them  to  exercise  within 
the  State  of  their  origin,  nor  can  they  exercise  powers  in  a  foreign 
State  not  permitted  to  corporations  organized  under  the  laws 
thereof.4  They  cannot,  however,  do  any  acts  which  are  contrary 
to  the  public  policy  of  the  foreign  State.5  Nor  can  they  transact 
business  for  which  domestic  corporations  cannot  be  formed  on 
account  of  statutory  prohibition  thereof.6 

In  some  jurisdictions  what  are  termed  "  retaliatory  statutes  " 
have  been  enacted.  The  purpose  of  these  statutes  is  to  put  cor- 
porations coming  from  other  States  upon  the  same  plane  as 
domestic  corporations  of  that  State  are  placed  when  they  seek 
in  turn  to  transact  business  in  the  States  referred  to.7  Some- 
times the  laws  of  the  foreign  State  expressly  provide  that  foreign 

1  Duke  v.  Taylor,  37  Fla.  641  ;  Dema-  Mich.  145;  Clarke  v.  R.  R.  Co.,  50  Fed. 
rest  v.  Flack,  128  N.  Y.  205;  28  N.  E.  645;  338;  State  v.  Water  Co.,  61  Kan.  563; 
Colwell  v.  Company,  100  U.  S.  55.  People  v.  Howard,  50  Mich.  239. 

2  McDonough  v.  Murdoch,  15  How.  5  L.  G.  R.  T.  Co.  v.  Commissioners,  6 
(U.  S.)  413.  Kan.  245. 

3  Empire  Mills  v.  Company  (Tex.  Ap.),  6  Empire  Mills  v.  Company  (Tex.  Ap.), 
15  S.  W.  506.  15  S.  W.  200. 

4  Diamond   Match   Co.  v.  Powers,  51  7  Talbot  v.  Company,  74  Mo.  544. 

182 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.    §  127 

corporations  shall  have  no  rights  or  privileges  other  than  those 
possessed  by  domestic  corporations  of  the  same  character.  A  fair 
interpretation  of  such  statutes  would  seem  to  be  that  such  foreign 
corporations  shall  have  equal  powers  with  domestic  corporations  of 
a  character  similar  to  their  own.1 

In  a  recent  case  an  interesting  question  arose  as  to  the  legal 
effect  of  inserting  powers  in  a  charter  to  be  exercised  only  outside 
of  the  State,  such  powers  being  forbidden  by  the  laws  of  the  State 
in  which  the  corporation  was  organized.2  In  this  case  the  Fed- 
eral Court  of  the  State  of  Washington  spoke  as  follows : 

"  It  has  become  a  habit  of  business  men  in  this  country  to  organize 
corporations  in  one  State  to  operate  in  another,  and  presumably 
there  is  some  advantage  to  be  gained  thereby,  otherwise  the  practice 
would  not  be  continued.  But  no  sound  reason  has  been  advanced, 
and  none  occurs  to  my  mind,  for  giving  additional  encouragement  to 
the  practice  by  judicially  expanding  the  powers  of  such  corporations 
so  as  to  include  additional  rights  and  powers  to  be  exercised  abroad 
but  not  at  home.  Corporations  organized  under  legislative  statutes 
are  not  endowed  with  the  rights  of  natural  persons  to  do  as  they 
please  except  when  restrained  by  prohibitive  laws.  On  the  contrary, 
the  rule  is  that  they  have  only  such  powers  and  rights  as  the  statutes 
confer,  and  the  enumeration  of  their  powers  implies  the  exclusion  of 
all  others  except  such  subordinate  and  incidental  rights  and  powers 
as  are  essential  to  their  existence  and  the  exercise  of  the  rights  and 
powers  conferred  in  express  terms,  and  the  corporation  can  make  no 
contracts  and  do  no  acts  other  than  permitted  by  the  State  which 
created  it  except  such  as  are  authorized  by  its  charter." 

The  general  rule  is  that  foreign  courts  will  not  interfere  in 
the  internal  management  of  foreign  corporations ;  that  is,  except 
in  the  presence  of  extraordinary  circumstances.3  In  this  con- 
nection a  distinction  obtains  where  the  act  complained  of  affects 
the  party  solely  in  his  capacity  as  stockholder,  for  there  he  must 
seek  redress  of  his  grievance  in  the  courts  of  the  domiciliary 
State  of  the  corporation.     But  where  the  act  affects  his  individual 

1  See  sec.  15,  Art.  XII.  California  Con-  2  Seattle  Gas  &  Electric  Co.  v.  Citizens' 

stitution  ;  sec.  11,  Art.  XV.  Montana  Con-  Light  &  Power  Co.,  123  Fed.  588 ;  125  Fed. 

stitutions;  I.  &   M.    B.  Co.  v.  Stone,   174  1001. 

Mo.  1  ;  73  8.  W. 453;  MacGinniBfl  v.  Com-  8  Sidway  v.  Company,  101   Fed.  481; 

pany  (Mont.),  75  Pac.  89 ;  Lowe  v.  Com-  Kimball   v.    Company,  157    Mass.    7;   31 

pany,  52  Cal.  60.  N.  E.  697. 

183 


5  128   INCORPOKATION  AND  ORGANIZATION  OF  CORPORATIONS.  [PART  I. 

rio-hts  he  may  seek  redress  in  any  tribunal  where  jurisdiction 
may  properly  be  acquired.1  Foreign  courts  have  not  the  power 
to  forfeit  charters  of  foreign  corporations.2 

Quo  warranto  is  the  proper  proceeding  to  try  the  right  of  a 
foreign  corporation  to  carry  on  corporate  business  in  a  foreign 

State.3 

The  certificate  of  the  Secretary  of  State  authorizing  a  foreign 
corporation  to  transact  business  within  the  State  is  a  franchise 
emanating  from  the  State,  and  cannot  be  gone  behind  or  revoked 
by  any  authority  but  the  State.4 

§  128.  Doctrine  of  State  Comity.  —  What  is  known  as  the 
"  doctrine  of  State  comity "  is  nothing  more  nor  less  than  a 
recognition  of  the  principle  that  the  right  of  foreign  corporations 
to  engage  in  business  in  a  State  other  than  that  of  their  creation 
depends  solely  on  the  will  of  such  other  State.5 

While  there  are  exceptions  to  this  rule  they  only  exist  where 
the  corporation  created  by  one  State  rests  its  right  to  enter 
another  and  engage  in  business  therein  upon  the  nature  of  its 
business.  As,  for  instance,  where  it  is  necessarily  an  instrumen- 
tality of  interstate  commerce,  and  its  business  constitutes  such 
commerce,  it  is  therefore  wholly  within  the  paramount  authority 
of  Congress.  In  this  case  the  exceptional  business  is  protected 
against  interference  by  such  authority. 

If  the  power  to  regulate  applies  to  all  the  instances  to  which 
such  commerce  gives  rise,  and  to  all  contracts  which  might  be 
made  in  the  course  of  its  transactions,  that  power  would  embrace 
the  entire  sphere  of  mercantile  activity  in  any  way  connected 
with  the  trade  between  the  States,  and  would  exclude  State  con- 
trol over  many  contracts  purely  domestic  in  their  nature.  The 
power  to  exclude  where  it  exists,  embraces  the  power  as  well  to 
regulate  and  to  enforce  all  legislation  in  regard  to  things  done 
within  the  State  which  may  be  directly  or  incidentally  requisite  in 
order  to  render  the  enforcement  of  the  State  powers  efficacious 
to  the  fullest  extent,  subject  always  of  course  to  the  paramount 
authority  of  the  United  States.6     Let  us  now  turn  our  attention 

i  N.  S.  C,  etc.  Co.  v.  Field,  64  Fed.  151 ;  4  State  ex  rel.  v.  Ackerman,  51  O.  St. 

M.  B.  T.   Co.  v.  R.  G.  N.  Co.,  81  N.  Y.  163;  37  N.  E.  828. 
Sup.  302.  8  Hooper  v.  State   of   California,  155 

2  Fritts  v.  Palmer,  132  U.  S.  289.  U.  S.  148. 

3  State  v.  Ins.  Co.,  39  Minn.  538 ;  41  6  W.  U.  Tel.  Co.  v.  Mayer,  28  O.  St 
N.  W.  108.  521. 

184 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  128 

to  the  attitude  maintained  by  the  State  courts  towards  foreign 
corporations. 

One  of  the  familiar  features  of  the  present  day  is  the  organi- 
zation of  corporations  under  the  laws  of  one  State  whose  statutes 
are  particularly  favorable  with  the  intention  of  carrying  on  no 
business  in  the  State  of  its  organization  and  with  the  avowed 
purpose  of  carrying  on  business  in  other  States.  Long  ago 
these  corporations  were  nominated  as  "  tramp  corporations,"  and 
there  was  at  the  outset  some  effort  made  on  the  part  of  the 
courts  to  limit  the  powers  and  question  the  legal  status  of  such 
corporations.  There  was  an  attempt  made  to  induce  the  courts 
to  refuse  to  judicially  recognize  such  corporations,  and  to  hold  their 
stockholders  liable  upon  their  contracts  as  partners  and  upon 
their  torts  as  joint  tortfeasors.1 

But  the  liberal  policy  of  the  American  States  in  extending 
hospitality  to  foreign  corporations  and  the  powerful  influence  of 
interstate  comity  has  completely  overcome  the  tendency  here 
referred  to,  so  that  at  the  present  day  the  doctrine  is  established 
in  practically  every  State  in  the  Union,  that  each  of  these  States 
will  recognize  as  valid  a  corporation  formed  under  the  laws  of 
another  State  for  the  express  purpose  of  doing  business  outside 
of  the  State  of  its  origin.2 

The  broader  view  taken  by  the  courts  on  this  question  is  well 
set  forth  by  the  decision  of  the  New  York  Court  of  Appeals  in 
Merrick  v.  Van  Sanvoort.3  In  this  case  attempt  was  made  to 
establish  the  doctrine  that  where  a  Connecticut  corporation 
conducts  all  its  business  in  the  State  of  New  York,  it  must 
thereby  be  deemed  to  have  migrated  to  New  York  and  to  have 
forfeited  its  charter,  thus  permitting  creditors  of  the  corporation 
to  hold  the  members,  officers,  and  agents  of  the  corporation  per- 
sonally liable  for  the  debts  and  torts  of  the  corporation.  In 
refusing  to  recognize  this  doctrine  the  court  spoke  as  follows: 

"  Hitherto  corporate  enterprise  has  not  been  trammelled  by  un- 
friendly legislation.  No  jealousy  or  competition  or  rivalry  of  adverse 
interest   has   been   permitted   to  convert   State   lines    into   barriers 

i  See  Hill  v.  Beach,  12  N.  J.  Eq.  .31 ;  2  See    Merrick   v.    Van    Sanvoort,   34 

Landgrant,  etc.  Co.  v.  Coffey  Co.,  fi  Kan.  N.  Y.  208;   Deinarest  v.  Flack,  128  N.  Y. 

245;  Montgomery  v.   Forl.es,   148  Mass.  205 ;  State  ex  rel.  v.  Cook  (Mo.),  80  S.  W. 

249;   19   N.  K.  342  ;   Atterljerry  v.   Knox,  929. 
4  B.  Monroe  (Ky.),  90.  8  34  N.  Y.  208. 

185 


8  128    INCOKPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

of  obstruction  to  the  free  course  of  general  commerce.  Its  avenues 
have  been  open  to  all. 

«  In  this  country  our  individual  interests  are  so  interwoven  that 
the  union  of  the  States  is  due,  in  its  continuance,  if  not  iu  its  origin, 
as  much  to  commercial  as  to  political  necessity.  The  citizens  of  each 
claim  a  birthright  in  the  advantages  and  resources  of  all.  They 
demand  from  their  local  authorities  such  facilities  as  the  law-making 
power  can  afford  in  the  employment  of  labor  and  capital.  They 
claim  such  corporate  franchises  and  immunities  as  may  enable  them 
to  compete  on  equal  terms  with  the  citizens  of  other  States.  For 
these,  with  the  structure  of  our  institutions,  they  naturally  look  to 
their  own  government.  They  acknowledge  a  double  allegiance  in 
their  local  and  federal  relations,  which,  by  general  consent,  carries 
with  it  a  correlative  community  of  rights.  They  may  live  in  an 
inland  State,  but  they  are  none  the  less  citizens  of  a  maritime  nation, 
and  they  may  lawfully  organize  companies  at  home  for  traffic  on 
ocean  highways. 

"A  corporate  charter  is  in  the  nature  of  a  commission  from  the 
State  to  its  citizens,  and  their  successors  in  interest,  whether  at  home 
or  abroad.  Each  government,  in  the  exercise  of  its  own  discretion, 
determines  the  conditions  of  its  grant.  It  is  free  to  impose  or  omit 
territorial  restrictions,  but  it  can  confer  general  powers  to  be  exer- 
cised within  its  bounds  or  without  them,  wherever  the  comity  of 
nations  is  respected.  For  the  purpose  of  commerce  such  a  com- 
mission is  regarded  like  a  government  flag,  as  a  symbol  of  allegiance 
.  and  authority  ;  and  it  is  entitled  to  recognition  abroad  until  it  forfeits 
a  recognition  at  home.  .  .  . 

".  .  .  We  think  the  policy  of  this  State  is  in  harmony  with  that 

■  of  the  country,  and  that  it  would  be  neither  provident  nor  just  to 
inaugurate  a  rule  which  would  uDsettle  the  security  of  corporate 
property  and  rights  and  exclude  others  from  the  enjoyment  here  of 
privileges  which  have  always  been  accorded  abroad.  Our  national 
commerce  is  but  the  aggregate  of  that  of  the  States,  and  every 
needless   restriction  by  the   operation  of  local  laws  is  unjust  and 

■  calamitous  to  all.  We  suppose  the  rules  of  comity  on  which  we  have 
hitherto  acted  to  be  generally  accepted  and  approved.  We  see  no 
reason  why  a  Southern  State  may  not  grant  to  a  corporation  of  its 
planters  the  right  to  erect  mills  for  the  manufacture  of  their  cotton 
in  New  England ;   nor  why  the  legislature  of  Massachusetts  may  not 

.authorize  a  company  of  Lowell  millers  to  raise  cotton  in  South 
America  or  the  Sea  Islands.  The  State  of  Illinois  touches  neither 
the  Atlantic  nor  the  Pacific;  but  if  it  should  organize   a  company 

•  of  its  citizens  on  the  ocean  with  its  office  in  the  City  of  New  York 
186 


CHAP.  TI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  128 

and  its  business  conducted  by  managers  elected  annually  in  Chicago, 
the  rights  of  the  corporation  would  be  recognized  wherever  the 
obligations  of  national  law  are  respected." 

Through  the  operation  of  interstate  comity  corporations  or- 
ganized under  the  laws  of  one  State  may  exercise  their  corporate 
powers  outside  of  the  geographical  limits  of  the  State  from  which 
they  have  obtained  their  charter.  The  doctrine  of  the  courts  on 
this  subject  is  well  set  forth  by  the  United  States  Supreme  Court 
in  Cowell  v.  Colorado  Springs  Co.1  as  follows  : 

"  By  the  general  comity  which,  in  the  absence  of  positive  direction 
to  the  contrary,  obtains  through  the  States  and  Territories  of  the 
United  States,  corporations  created  in  one  State  or  Territory  are  per- 
mitted to  carry  on  any  lawful  business  in  another  State  and  Territory, 
and  to  acquire,  hold,  and  transfer  property  there  equally  as  indi- 
viduals. If  the  policy  of  the  State  or  Territory  does  not  permit  the 
business  of  the  foreign  corporations  in  its  limits  or  allow  the  cor- 
poration to  acquire  or  hold  real  property,  it  must  be  expressed  in 
some  affirmative  way ;  it  cannot  be  inferred  from  the  fact  that  its 
legislature  has  made  no  provision  for  the  formation  of  similar  corpo- 
rations or  allows  corporations  to  be  formed  only  by  general  law." 

A  most  instructive  case  in  this  immediate  connection  is  that  of 
Demarest  v.  Flack,2  wherein  the  New  York  Court  of  Appeals 
observed  that : 

"  The  courts  of  every  State  and  country  recognize  foreign  corpora- 
tions through  what  is  termed  national  or  State  comity.  But  whether 
such  recognition  shall  be  given  must  be  decided  by  the  courts  of  the 
country  where  the  corporation  seeks  to  do  business.  In  our  State,  as 
in  others,  it  is  a  question  of  domestic  policy,  and  what  that  policy  is 
must  be  determined  by  an  examination  of  our  own  legislation.  If  we 
find  any  direct  enactment  uppn  the  subject,  it  is  our  duty  to  obey  it, 
and  in  its  absence  we  must  determine  the  question  with  reference  to 
our  general  legislation  and  to  the  circumstances  which  surround  us 
as  a  great  and  growing  commercial  community,  having  need  of  and 
employing  large  amounts  of  combined  capital,  and  for  whose  prosperity 
and  growth  it  is  of  the  utmost  importance  that  such  capital  should 
have  the  greatest  facilities  extended  it  for  useful  employment,  with 
reasonable  and  proper  personal  exemptions  from  liability.  We  can 
find  no  reason  for  a  domestic  policy  that  should  exclude  from  recog- 

1  100  U.  S.  55.  2  128  N.  Y.  205;  28  N.  E.  645. 

L87 


§  128   INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

nition  by  our  courts  foreign  corporations  generally.  It  may  safely 
be  said  there  can  be  no  such  domestic  policy  at  the  present  day  in 
a  civilized  State.  .  .   . 

"  An  examination  of  our  laws  shows  that  it  is,  and  for  many  years 
has  been,  the  policy  of  this  State  to  enlarge  the  facilities  for  the 
formation  of  corporations.  General  laws  are  on  our  statute  book  for 
the  formation  of  corporations  of  almost  every  conceivable  kind,  and 
under  some  one  of  them  a  corporation  of  the  kind  mentioned  in 
the  case  could  readily  be  formed.  The  freedom  from  personal  liability 
would  be  as  great  and  could  be  as  easily  attained  under  our  own  as 
under  the  laws  of  West  Virginia.  The  security  of  the  creditor  would 
not  be  substantially  greater  in  the  case  of  the  domestic  than  in  that 
of  the  foreign  corporation.  In  the  latter  the  creditor  has  the  remedy 
by  attachment,  and  he  can  obtain  about  as  easy  access  to  its  property 
as  if  it  were  domestic  instead  of  foreign. 

"  There  is  really  nothing  to  evade  by  incorporating  under  a  foreign 
law.  No  harmful  results  flow  to  a  creditor  or  to  the  community 
here  by  such  incorporation.  Where  the  corporation  formed  under 
another  jurisdiction  comes  here  to  do  business  of  a  kind  which  we 
permit  to  be  done  by  corporations,  and  where  our  laws  provide  for 
incorporating  individuals  for  the  purpose  of  doing  that  business,  it 
is  difficult  to  see  how  the  terms  '  evasion '  and  '  fraud '  can  be  prop- 
erly applied  to  acts  of  our  citizens  whereby  they  obtain  incorpora- 
tion in  another  State.  When  they  come  in  our  State  to  do  business 
they  must  conform  to  our  laws  relating  to  foreign  corporations  and 
comply  with  the  terms  laid  down  by  us  as  conditions  of  allowing 
them  to  transact  business  here.  In  the  case  of  many  kinds  of  cor- 
porations such  conditions  have  already  been  imposed  by  our  laws, 
and  if  there  be  any  kind  where  none  is  imposed  it  is  conclusive 
evidence  that  up  to  this  time  the  legislature  has  not  thought  it 
conducive  to  the  true  interests  of  the  State  and  its  citizens  to  impose 
them.  I  do  not  intimate  that  it  is  necessary  for  a  State  to  expressly 
by  statute  exclude  foreign  corporations  from  acting  within  its  juris- 
diction. The  policy  of  the  State  may  exclude  them,  and  that  policy 
may  be  clearly  established  by  a  reference  to  the  general  legislation 
of  a  State.     I  find  none  such  in  the  laws  of  this  State. 

"  It  has  been  urged  that  the  easy  way  which  our  laws  provide  for 
forming  corporations  is  itself  a  reason  why  we  should  not  recognize 
as  a  corporation  those  of  our  own  citizens  who  have  gone  to  another 
State  for  the  purpose  of  incorporating  themselves  under  the  laws 
thereof,  to  do  business  in  our  own  State  as  such  corporation. 

"  We  think  there  is  very  little  force  in  the  argument.  The  public 
policy  which  we  see  in  our  own  State,  as  evidenced  by  her  laws  upon 
188 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.    §  128 

the  subject  of  the  formation  of  corporations,  is  one  which  looks  to 
their  ready  and  easy  formation  as  a  means  of  transacting  business 
with  an  accumulation  of  capital  and  an  exemption  from  personal 
liability  to  the  largest  extent  consistent  with  reasonable  supervision 
by  the  State.  The  facilities  for  incorporation  offered  by  this  State 
are  not  the  result  of  any  desire  to  promote  the  formation  of  corpora- 
tions here  as  against  their  formation  in  other  States.  They  are 
offered  because  of  a  policy  on  our  part  which  urges  upon  the  State 
the  propriety  of  furnishing  them  as  one  means  of  controlling  the 
business  done  by  them  and  keeping  it  within  our  borders.  If  in  any 
particular  case  it  is  thought  by  those  interested  in  the  matter  that 
the  business  can  be  done  in  our  own  State  and  by  our  own  citizens 
with  greater  facility  under  the  form  of  a  foreign  corporation  than 
under  that  of  a  domestic  one,  there  is  no  public  policy  which  forbids 
its  transaction  under  such  form.  The  supervision  of  a  foreign  cor- 
poration by  this  State  may  easily  be  exercised  by  imposing  terms  as 
a  condition  of  permitting  it  to  do  business  here.  The  absence  of 
any  such  terms  in  our  legislation  forms  no  reason  for  refusing  to 
recognize  the  corporation.  The  power  rests  with  the  legislature  to 
say  whether  any,  and  if  so  what,  terms  shall  be  imposed  upon  such 
corporations  as  a  condition  of  granting  them  permission  to  do  business 
here.  Those  terms  can  only  be  imposed  by  the  legislature,  and  in 
their  absence  our  courts  ought  not,  merely  on  that  account,  to  refuse 
to  recognize  a  foreign  corporation.  In  the  absence  of  legislation,  our 
courts  must  either  refuse  absolutely,  or  else  they  must  recognize  the 
right  of  such  corporations  to  come  to  this  State  and  do  business  here. 
The  courts  cannot  themselves  impose  terms  or  conditions.  .  .  . 

"  The  truth  is,  foreign  corporations  are  not  properly  to  be  regarded 
with  suspicion,  nor  should  unnecessary  restraints  be  imposed  upon 
their  doing  business  in  our  midst.  They  carry  no  black  flag,  and  the 
policy  of  all  civilized  nations  is  to  grant  them  recognition  in  their 
courts.  It  seems  to  me  that  every  reason  which  urges  upon  us  the 
recognition  of  foreign  corporations  organized  with  power  to  do 
business  in  our  State  and  composed  of  citizens  of  the  foreign  State, 
is  equally  potent  when  the  foreign  corporation  is  composed  of  our 
own  citizens.  It  has  always  been  supposed  that  a  State  should  at 
least  deal  as  liberally  with  its  own  citizens  as  with  those  of  foreign 
States.  If,  therefore,  we  permit  foreign  citizens  to  come  within  our 
limits  in  the  form  of  a  foreign  corporation  organized  with  power  to 
do  business  here  and  recognized  by  us,  why  should  we  not  permit 
our  own  citizens  to  avail  themselves  of  the  like  privilege?  If  we 
impose  terms  and  conditions  upon  foreign  corporations,  as  such, 
doing    business   here,    those   same   terms   and    conditions    still    and 

1  89 


§  129  INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

equally  apply  to  a  foreign  corporation  when  composed  of  our  own 
citizens.  Why  should  they  not  be  placed  at  least  upon  an  equality 
with  the  foreign  citizen?"1 

§  129.  What  constitutes  doing  Business  on  the  Part  of  a  Foreign 
Corporation  within  the  state.  —  There  is  perhaps  no  subject  of 
corporation  law  wherein  will  be  found  greater  diversity  in  the 
opinions  of  the  courts  of  the  several  Commonwealths  than  that 
relating  to  the  rights  of  foreign  corporations.  The  growth  of 
corporate  organization  as  well  as  the  vast  extension  of  the  busi- 
ness of  corporations  outside  of  the  State  of  their  origin  has  made 
the  question  of  determining  what  in  legal  effect  constitutes  doing 
business  on  the  part  of  a  foreign  corporation  in  States  other  than 
that  of  its  domicile  one  of  great  practical  importance.  As  has 
already  been  observed,  parties  may  incorporate  in  one  State  at 
the  present  time  for  the  purpose  of  transacting  their  business  in 
another  Commonwealth.2 

In  some  of  the  States,  notably  South  Carolina,  the  legislatures- 
have  attempted  to  give  a  statutory  definition  as  to  what  constitutes 
doing  business  on  the  part  of  a  foreign  corporation  within  the 
Commonwealth.  In  most  of  the  States,  however,  the  question  is. 
left  for  judicial  determination.  A  fair  example  of  such  statutes 
is  to  be  found  in  the  New  York  statute 3  which  provides  that  "  no 
foreign  corporation,  other  than  a  moneyed  corporation,  shall  do 
business  in  the  State  without  having  first  procured  "  a  proper 
certificate  from  the  Secretary  of  State  that  it  has  complied  with 
the  statutes  in  such  case  made  and  provided.  From  the  foregoing 
it  will  appear  that  the  whole  question  centres  upon  the  meaning 
of  the  word  "  business  "  as  used  in  the  statutes,  of  which  the  fore- 
going is  a  fair  example.  It  will  be  impossible  within  the  limits 
of  this  work  to  discuss  at  any  length  the  conflicting  decisions  of 
the  courts  on  the  point  here  referred  to.  All  that  it  is  proposed 
to  do  is  to  present  certain  rules  which  a  careful  reading  of  the 
authorities  have  shown  to  represent  the  prevailing  and  better 
considered  opinions  of  the  various  courts  on  the  questions  pre- 
sented.    These  rules  may  be  enumerated  as  follows : 

i  See    also   Lancaster   v.    Amsterdam  484;   28   Atl.  973;   Hanna  v.  Company. 

Improvement  Co.,  140  N.  Y.  576 ;  35  N.  E.  23  0.  St.  622. 

964.  3  New    York   Session   Laws  of    1890, 

2  State  ex  rel.  v.  Cook  (Mo.),  80  S.  W.  chap.  56.3,  sec.  150;  amended  by  Laws  of 

929;  Oakhill  Mfg.  Co.  o.  Garst,  18  R.  I.  1901,  chaps.  96,  538. 
190 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  129 

(1)  In  order  to  constitute  the  transaction  of  business  by  a 
foreign  corporation  within  the  foreign  State,  it  is  not  indispensa- 
ble that  it  should  do  the  greater  part  of  its  business  therein.  If 
it  does  any  part  of  its  ordinary  business  therein  and  the  same 
cannot  properly  be  styled  purely  interstate  commerce,  the  same 
constitutes  the  transaction  of  business  therein  within  the  meaning 
of  the  statute.1 

(2)  Generally  speaking,  the  making  of  a  single  contract  within 
the  foreign  State  does  not  constitute  the  transaction  of  business 
therein.2    There  must  be  more  or  less  continuity  in  the  matter. 

(3)  The  institution  and  prosecution  of  actions  not  arising  out 
of  previous  transactions  had  within  the  foreign  State  does  not 
constitute  the  transaction  of  business  within  the  meaning  of  the 
statute.3 

(4)  Sales  of  merchandise  by  foreign  trading  corporations  made 
by  means  of  non-resident  travelling  salesmen,  or  by  correspondence 
had  between  the  foreign  corporation  at  the  domiciliary  office  and 
customers  in  the  foreign  State,  or  upon  unsolicited  orders  from 
customers  in  the  foreign  State,  do  not  constitute  transaction  of 
business  within  the  meaning  of  the  statute  regulating  the  trans- 
action of  business  by  foreign  corporations.4 

Aside  from  the  question  of  the  nature  of  the  act,  there  are 
constitutional  grounds  upon  which  it  would  be  held  that  corpora- 
tions were  not,  under  the  circumstances  here  referred  to,  subject 
to  the  statutes  in  such  foreign  State  compelling  foreign  corpora- 
tions to  obtain  a  permit  to  do  business  therein.     The  constitu- 

1  Lamb  v.  Lamb,  6  Biss.  420;  Fed.  Co.,  72  Miss.  809;  17  So.  769;  Kilgore  v. 
Cas.  No.  8018.  Smith,  122  Pa.  St.  48  ;  15  Atl.  698 ;  United 

2  Cooper    Mfg.    Co.  v.  Ferguson,    113     States  i\  Company,  29  Fed.  17. 

U.  S.  727 ;  Gilchrist  v.  Helena  H.  S.  &  S.  R.  3  Mandel   v.    Company,    154  111.   177; 

Co.,  47  Fed.  593  ;    Colorado  Iron  Works  40  N.  E.  462;  Smith  v.  Little,  67  Ind.  549. 
Co.  v.  Company,    15    Col.  499;   25  Pac.  *  T.  L.   Co.   v.  Holbert,  5  N.   Y.  Ap. 

325  ;  Commonwealth  v.  Standard  Oil  Co.,  Div.  559  ;  Novelty  Mfg.  Co.  v.  Connell.  88 

101  Pa.  St.  119  ;  Florsheim  Co.  r.Lester,.60  Hun,  254  ;  M.  I.  W.  C.  &  S.  Co.  v.  Mosher, 

Ark.  120;  29  S.  W.  34;  Miller  v.  Williams  114   Mich.  64;    72   N.   W.   117;    F.   &  J. 

(Col.),  59  Pac.  740  ;   Tabor  v.   Company,  M.  Co.  v.  Foster,  4  Dak.  329  ;  J.  S.  L.  Co. 

11  Col.  419  ;  18  Pac.  537  ;  Creteau  v.  Foote  v.  Chappell,  184  111.  539  ;  56  N.  E.  539  ; 

Co.,  40  Ap.  Div.  (N.  Y.)  215  ;  Sec.  Co.  v.  Gale    Mfg.    Co.  v.    Finkolstein,  22    Tex. 

Panhandle    Nat.    Bank,    93    Texas,   575  ;  Civ.  Ap.  241  ;  54  S.  W.  619  ;  Toledo  Com- 

57  S.  W.  22  ;  Missouri  Coal  Mining  Co.  mercial   Co.  v.  Company,  55  0.  St.  217  ; 

v.  Ladd,  160   Mo.  435 ;   61   S.   W.    191;  Wolff  Dryer  Co.  v.  Bigler,  192  Pa.St.466  ; 

Payson  v.  Withers,  5  Biss.  269  ;  Fed.  Cas.  43   Atl.    1092;   Droege   v.   Company,    163. 

No.  10864  ;  Hope   Mut.  Life  Ins.   Co.   v.  N.  Y.  466  ;  57  N.  E.  747. 
Perkins,  38  N.  Y.  404  ;  Hart  v.  Livermoro 

191 


§  129  INCORPORATION    AND  ORGANIZATION  OF  CORPORATIONS.  [PART  I. 

tional  grounds  here  referred  to  have  reference  to  those  trading 
or  quasi-public  corporations  engaged  wholly  in  interstate  trade 
and  commerce  and  therefore  not  subject  to  regulation  by  State 
enactments.1  The  same  rule  applies  where  the  corporation  is  in 
the  employ  of  the  general  government.2 

(5)  Foreign  corporations  may  take  mortgages  by  way  of  in- 
vestment or  as  security,  or  may  take  real  estate  as  security  or 
otherwise  without  coming  within  the  prohibition  of  the  statute, 
provided  such  acts  are  not  within  the  express  purposes  for  which 
such  corporations  were  created,  as  for  example  where  they  are  en- 
gaged in  the  mortgage  loan  or  real  estate  business.3 

(6)  Foreign  corporations  may  take  property  by  devise  in  for- 
eign jurisdictions,  if  their  charter  authorizes  it,  either  expressly  or 
by  implication,  without  coming  within  the  purview  of  the  statute.4 

(7)  The  mere  fact  that  a  corporation  pays  rent  for  offices  for 
its  agent  employed  to  solicit  orders  in  the  foreign  State  does  not 
in  itself  prove  that  the  corporation  is  transacting  business  within 
the  foreign  State.5  The  question  in  all  such  cases  is  whether  it  is 
actually  transacting  business  within  the  foreign  State,  and  not 
whether  some  incident  preliminary  to  the  transaction  of  such 
business  is  to  be  performed  there.6  The  maintenance  of  an  office 
within  the  State  may  be  considered  as  a  circumstance  done  in 
connection  with  others  to  show  that  a  foreign  corporation  is 
transacting  business  in  the  State,  but  it  is  by  no  means  conclu- 
sive of  the  question.7 

(8)  Where  a  foreign  corporation  consigns  goods  to  persons  in 
a  foreign  State  to  sell,  and  sales  are  made  there  by  the  factor  in 
his  own  name  and  the  proceeds  collected  by  him,  this  does  not 

1  Robbins  v.  Shelby  County  Tax  Dis-  L.  E.  1137 ;  F.  B.  D.  G.  Co.  v.  Lester,  60 
trict,  120    U.  S.  489;   Brennan  v.  Titus-     Ark.  120;  29  S.  W.  34. 

ville,  153  U.  S.  289.  4  Am.,  etc.  Christian  Union  v.  Yount, 

2  Horn  Silver  Mining  Co.  v.  New  York,  101  U.  S.  352  ;  Santa  Clara  Female  Acad- 
143  U.  S.  305.  emy  v.  Sullivan,  116  111.  375 ;  6  N.  E.  183 ; 

3  C.  U.  A.  Co.  v.  Scammon,  102  111.  46;  Lewisburg  Baptist  University  v.  Tucker, 
Bard  v.  Poole,  12  N.  Y.  495;  A.  M.  L.  I.  Co.  31  W.  Va.  621 ;  8  S.  E.  410 ;  Chamberlain 
v.  Owen,  15  Gray  (Mass.),  491  ;  Black  v.  v.  Chamberlain,  43  N.  Y.  444. 

Colwell,  83  Fed.  880 ;  C.  O.  L.  I.  Co.  v.  5  People  ex  rel.  Brewing  Co.  v.  Roberts, 

Sawyer,  44  Wis.  387 ;  Fritts  v.  Palmer,  22  N.  Y.  Ap.  Div.  284. 
132  IT.  S.  288;  Bank  v.  Sherman,  28  Ore.  6  Tallapoosa  Lumber  Co.  v.  Holbert, 

577 ;  43  Pac.  658  ;  Simplex  Dairy  Co.  v.  5  N.  Y.  Ap.  Div.  516. 
Cole,  86  Fed.  739  ;  Gilchrist  v.  Company,  7  People  v.   Company,   175  N.  Y.  76; 

47  Fed.  593;  C.  P.  E.  Co.  v.  Company,  American  Broom  &  Brush  Co.  v.  Addicks, 

152   Mass.  432;    28   N.  E.  300;    Cooper  19  N.  Y.  Misc.  Rep.  36. 
Mfg.  Co.  v.  Ferguson,  113  U.  S.  727;  28 
192 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.    §  129 

constitute  doing  business  within  the  foreign  State  within  the 
meaning  of  the  statute.1 

(9)  The  renting  of  an  office  in  a  foreign  jurisdiction  in 
charge  of  a  selling  agent  who  distributes  therefrom  samples  to 
customers  and  to  travelling  agents  whose  salaries  are  paid  there- 
from, together  with  the  keeping  of  a  bank  account  in  such  juris- 
diction, does  not  necessarily  constitute  doing  business  within  the 
foreign  State  within  the  meaning  of  the  statute.2 

Finally,  in  addition  to  the  foregoing  rules,  it  may  not  be  without 
value  in  this  connection  to  call  particular  attention  to  a  few  cases 
which  seem  to  throw  considerable  light  upon  the  general  subject  of 
what  constitutes  the  transaction  of  business  within  a  foreign  State 
within  the  meaning  of  the  Statutes  already  referred  to.  Attention 
is  first  called  to  the  case  of  People  ex  rel.  Kellogg  Paper  Co.  v. 
Roberts.3  Here  an  Illinois  corporation  furnished  printed  matter 
to  local  publishers  in  the  State  of  New  York.  It  kept  solicitors 
in  the  State  of  New  York  to  secure  advertising  patronage  for  a 
newspaper  published  by  it  in  Chicago.  For  this  purpose  it  had  an 
office  in  the  State  of  New  York  with  a  manager  and  five  clerks. 
It  also  kept  a  New  York  bank  deposit  from  which  rent  and  sal- 
aries were  paid  amounting  to  an  annual  expense  of  $13,000.  It 
had  office  furniture  in  the  State  of  New  York  valued  at  $700.  It 
was  held  that  the  corporation  had  no  capital  employed  in  the 
State  of  New  York  which  rendered  its  capital  stock  liable  to 
assessment  for  taxation.     The  court  in  its  opinion  stated  : 

"  Office  conveniences  are  permitted  here  to  a  foreign  corporation 
doing  business  in  another  State  to  solicit  orders  to  be  executed  in  the 
other  States  without  liability  to  our  franchise  tax.  In  People  ex  rel. 
Smith  Co.  v.  Eoberts,4  the  court  held  that  office  leases,  bank  accounts, 
and  the  keeping  of  samples  within  the  State  by  foreign  corporations 
were  nominally  incidental  to  the  business  of  soliciting  orders  and 
making  sales  which  the  relator  could  carry  on  in  the  foreign  State  with- 
out being  liable  to  taxation.  It  also  observed  that  the  machinery 
with  which  an  interstate  business  is  carried  on  is  to  some  extent 
erected  within  the  State  and  does  not  make  such  business  taxable 
there." 

1  Bertha  Zinc  &  Mining  Co.  v.  Clure,  Ap.  Div.  13;  People  ex  rel.  v.  Roberts, 
7  N.  V    MiflC    Rep.  128.  29  N.  V.  Ap.  Div.  585. 

2  Washington  Mills  Co.  v.  Roberts,  8  8  30  N.  Y.  Ap.  Div.,150. 
N.  Y.  A  p.  Div  201  ;  affirmed  in  151  N.  Y.  <  27  N.  Y.  Ap.  Div.  455. 
619 ;  People  ex  rel.  v.   Roberts,  25  N.  Y. 

13  193 


§  129  INCORPORATION  AND  ORGANIZATION  OP  CORPORATIONS.    [PART  I. 

In  Vaughan  Machine  Co.  v.  Lighthouse,1  the  testimony  showed 
that  a  foreign  corporation  had  sold  merchandise  in  New  York 
both  by  agents  and  by  correspondence,  and  in  this  case  it  had  no 
office  within  the  State.  Upon  the  question  whether  this  constituted 
the  transaction  of  business  within  the  State,  the  court  spoke  as 
follows : 

"  The  statute  does  not  intend  to  relate  to  business  conducted  in  the 
manner  just  referred  to.  It  contemplates  a  location,  a  domicile, 
having  an  office  and  the  investment  of  some  part  of  its  capital  within 
the  State.  Orders  can  then  be  transmitted  and  dealings  had  with  it 
at  this  office  and  the  conduct  of  its  business  is  thus  transferred,  in  a 
measure  at  least,  to  the  headquarters  established  within  the  territorial 
limits  of  this  State.  It  thus  settles  within  the  State,  and  enjoys  the 
benefits  incident  to  a  domestic  corporation,  and  the  legislature  im- 
poses requirements  and  obligations  upon  it  by  reason  of  the  privi- 
lege conferred  of  doing  business  like  a  body  corporate  organized  in 
this  State.  It  was  never  intended  to  hamper  trade  and  restrict 
interstate  commerce  by  bringing  within  its  ban  every  corporation 
which  happens  to  cross  the  State  boundary  with  its  wares  to  supply 
customers  who  have  ordered  them  from  the  home  office. 

"...  It  must  be  kept  in  mind  that  it  was  not  designed  to  fetter  or 
exclude  business  from  the  State.  Its  aim  was  to  require  a  foreign 
corporation,  which  was  on  a  level  in  its  privileges  with  one  organ- 
ized here,  to  bear  the  burdens  and  be  equally  accessible  to  process 
with  State  corporations.  To  give  it  the  construction  contended  for 
by  the  defendant  would  interfere  with  that  comity  between  the  States 
in  their  trade  relations  which  has  been  potential  in  the  development 
of  our  commercial  and  industrial  business." 

In  Cummer  Lumber  Company  v.  Insurance  Company,2  the  court 
spoke  as  follows : 

"  This  statute  —  relative  to  foreign  corporations  obtaining  a  permit 
to  do  business  in  this  State  —  was  simply  declaratory  of  the  policy  of 
the  State  that  foreign  stock  corporations  should  not  carry  on  any  busi- 
ness in  this  State  which  similar  corporations  organized  under  its  laws 
could  not  lawfully  conduct.  Its  purpose  was  not  to  avoid  contracts, 
but  to  provide  an  effective  supervision  and  control  of  the  business 
proposed  to  be  carried  on  here  by  foreign  corporations,  and  it  is 
absurd  to  contend  that  it  had  no  reference  to  the  facts  established  by 
the  evidence  in  the  case  at  bar." 

i  64  N.  Y.  Ap.  Div.  138.  2  67  N.  Y.  Ap.  Div.  151. 

194 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  130 

Again,  the  court  said  : 

"  The  scope  of  the  law  here  under  consideration  is  that  of  merely- 
undertaking  to  regulate  the  business  of  foreign  corporations  so  that 
they  shall  not  do  business  under  more  advantageous  terms  than  those 
allowed  to  corporations  of  this  State.  It  has  no  relation  whatever  to 
the  incidental  contracts  of  a  foreign  corporation  made  with  a  domestic 
corporation,  such  as  the  insurance  of  the  property  of  a  lumber  com- 
pany organized  under  the  laws  of  Florida  and  doing  business  in  that 
State." 

Finall3r,  attention  is  called  to  People  ex  rel.  Dives  Pelican  Com- 
pany v.  Feitner.1  In  this  case  a  corporation  organized  under  the 
laws  of  the  State  of  Colorado  had  its  principal  place  of  business 
in  the  State  of  New  York  and  had  an  office  in  the  City  of  New 
York.  The  New  York  office  was  maintained  for  the  sole  purpose 
of  enabling  the  directors  of  the  corporation  to  meet  in  it  and 
declare  dividends  on  its  stock.  No  goods  of  the  corporation  were 
sent  to  or  sold  in  New  York.  It  had  no  bills  receivable  in  New 
York,  and  the  only  assets  which  it  had  in  that  State  were  office 
furniture  and  money  on  hand  and  in  bank  which  had  been  sent 
from  its  principal  office  to  its  New  York  office  for  the  purpose 
of  paying  dividends.  It  was  held  that  the  corporation  was  not 
doing  business  in  the  State  of  New  York  within  the  meaning  of 
the  statute. 

§  130.  Penalty  for  transacting  Business  in  a  Foreign  State 
without  obtaining  a  Permit.  —  The  statutes  of  the  various  States 
differ  materially  with  respect  to  the  penalty  that  attaches  to  the 
transaction  of  business  by  a  foreign  corporation  without  having 
first  complied  with  the  statute  relative  to  obtaining  a  permit  to 
transact  the  same.  The  form  of  penalty  prescribed  usually  takes 
one  of  five  forms,  to  wit : 

(1)  Suspending  the  right  to  maintain  suits  in  the  courts  of  the 
foreign  State  until  the  statute  has  been  complied  with.  (2)  Stat- 
utes absolutely  prohibiting  the  right  to  bring  suit  on  contracts 
entered  into  in  the  foreign  State  before  the  ootaining  of  a  permit 
to  do  business  therein.  (3)  Statutes  providing  that  all  contracts 
made  by  a  foreign  corporation  before  obtaining  a  permit  to  do 
business  in  a  foreign  State  shall  be  absolutely  void.  (4)  Statutes 
providing  penalties  in  certain  designated  amount  for  failure  to 

1  77  N.  Y.  Ap.  Div.  189. 

195 


§  130    INCORPORATION  AND  ORGANIZATION  OP  CORPORATIONS.    [PART  I. 

obtain  a  permit  in  a  foreign  State  before  transacting  business 
therein.  (5)  Statutes  merely  giving  the  right  to  the  State  to 
bring  proceedings  to  oust  or  exclude  foreign  corporations  from 
doing  business  within  the  foreign  State  without  having  first 
obtained  a  permit  so  to  do.  Each  of  the  foregoing  will  now  be 
taken  up  briefly  for  separate  consideration. 

(1)  Suspending  the  right  to  maintain  suits  in  the  courts  of  the 
foreign  State  until  the  statute  has  been  complied  with.  Such  stat- 
utes do  not  affect  the  validity  of  contracts  previously  made  in  the 
foreign  State  by  a  foreign  corporation,  but  merely  prevent  it 
from  enforcing  the  same  therein  until  it  has  obtained  a  permit  to 
do  business  in  such  State.1 

(2)  Statutes  absolutely  prohibiting  the  right  to  bring  suit  on 
contracts  entered  into  in  the  foreign  State  before  the  obtaining  of 
a  permit  to  do  business  therein.  -  Such  statutes  exist  in  New  York 
and  read  as  follows : 

"  No  foreign  corporation  now  doing  business  in  this  State  shall  do 
business  herein  after  December  31st,  1892,  without  having  procured 
such  certificate  from  the  Secretary  of  State  ;  but  any  contract 
previously  made  by  the  corporation  may  be  permitted  and  enforced 
within  the  State  subsequent  to  such  date.  No  foreign  stock  corpora- 
tion doing  business  in  this  State  shall  maintain  any  action  in  this 
State  upon  any  contract  made  by  it  in  this  State  unless  prior  to  the 
making  of  such  contract  it  shall  have  procured  a  certificate." 

In  interpreting  this  provision  of  the  statutes  the  Supreme 
Court,  in  Dunbarton  Flax  Spinning  Co.  v.  Greenwich  and  John- 
sonville  Railway  Company,2  spoke  as  follows : 

"  Unless  prohibited  by  law,  a  foreign  corporation,  duly  organized, 
can  come  into  this  State  and  exercise  the  legitimate  powers  conferred 
upon  it  and  carry  on  any  business  not  prohibited  by  our  laws  or 
against  public  policy.  The  State  has  the  power,  however,  to  compel 
compliance  with  its  laws  or  to  punish  the  corporation  if  it  does  not 
do  so.  And  the  legislature  can  deny  to  such  corporation  failing  to 
comply  with  its  laws  by  procuring  a  certificate  and  paying  the  license 
fee,  all  recourse  to  its  courts  to  enforce  its  rights  or  to  redress  its 
wrongs.     These   statutes   are,  however,    mere   revenue   regulations, 

1  Goddard  v.  Crefields  Mills,  75  Fed.  v.  Fowler  Bros.,  163  N.  Y.  580;  57  N.  E. 
*18 ;  21  C.  C.  A.  530  ;  Davis  Provision  Co.     1 108. 

2  87  Ap.  Div.(N.  Y.)  21. 
196 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  130 

compliance  with  which  is  made  necessary  in  order  to  acquire  the 
right  to  do  business  here  and  to  enforce  causes  of  action  in  our 
courts. 

"In  Lancaster  v.  A.  I.  Co.1  it  is  said  to  be  the  policy  of  the  State 
to  encourage  foreign  corporations  to  enter  its  boundaries  for  the 
transaction  of  lawful  business,  and  it  is  manifestly  for  the  interest 
of  the  State  that  foreign  capital  should  be  actively  employed  within 
its  borders." 

(3)  Statutes  providing  that  all  contracts  made  by  a  foreign  cor- 
poration before  obtaining  a  permit  to  do  business  in  a  foreign  State 
shall  be  absolutely  void.  To  have  the  effect  stated  above  the 
statute  must  in  express  terms  declare  that  contracts  made  by  cor- 
porations which  have  not  complied  with  the  statute  relative  to 
obtaining  a  permit  to  do  business  within  a  foreign  State,  shall  be 
absolutely  void.  Where  such  is  the  case,  it  is  entirely  clear  that 
no  action  can  be  maintained  by  the  corporation  thereon  in  such 
foreign  State.2  Such  statutes,  however,  have  no  extra-territorial 
effect. 

In  an  Illinois  case 3  the  court  spoke  as  follows : 

"To  permit  the  company,  when  they  admit  that  they  have  dis- 
regarded all  these  requirements,  to  recover,  would  be  for  the  courts 
to  disregard  the  clearly  expressed  will  of  the  general  assembly,  and 
to  say  what  it  has  said  shall  be  unlawful  is  and  shall  be  lawful  and 
binding.  To  enforce  the  payment  of  this  note  would  be,  virtually, 
to  repeal  a  plain  enactment  of  the  legislature.  When  the  legislature 
prohibits  an  act,  or  declares  that  it  shall  be  unlawful  to  perform  it, 
every  rule  of  interpretation  must  say  that  the  legislature  intended 
to  interpose  its  power  to  prevent  the  act,  and,  as  one  of  the  means 
of  its  prevention,  that  the  court  shall  hold  it  void.  This  is  as  mani- 
fest as  if  the  statute  had  declared  that  it  should  be  void.  To  hold 
otherwise  would  be  to  give  the  person,  or  corporation,  or  individual 
the  same  rights  in  enforcing  prohibited  contracts  as  the  good  citizen 
who  respects  and  conforms  to  the  law.  To  permit  such  contracts  to 
be  enforced,  if  not  offering  a  premium  to  violate  law,  certainly 
withdraws  a  large  portion  of  the  fear  that  deters  men  from  defying 
the  law.  To  do  so  places  the  person  who  violates  the  law  on  an  equal 
footing  with  those  who  strictly  observe  its  requirements.  That  this 
contract  is  absolutely  void,  as  to  appellee,  we  entertain  no  doubt."  * 

1  140  N.  Y.  576,  591  ;  35  N.  B.  964.  •  C.  M.  H.  A.  Co.  v.  Rosenthal,  55  111.  85. 

2  Bank  of  Louisville  v.  Young,  37  Mo.  4  See  also  McCanna  &  Eraser  Co.  v. 
398.                                                                       Company,  74  Fed.  597. 

197 


§  131  INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.   [PART  I. 

(4)  Statutes  providing  'penalties  in  certain  designated  amounts 
for  failure  to  obtain  a  permit  in  a  foreign  State  before  transacting 
business  therein.  In  this  connection  two  opposing  lines  of  author- 
ity are  to  be  met  with,  one  holding  that  where  a  penalty  is 
imposed,  this  is  exclusive,  but  does  not  render  the  contract  made 
by  the  foreign  corporation,  out  of  which  the  imposition  of  the 
penalty  arose,  invalid.1  The  other,  and  what  appears  to  us  the 
better,  view  is  that  although  a  specific  penalty  is  provided,  this  in 
itself  operates  to  render  the  contract,  out  of  which  the  imposition 
of  the  penalty  arose,  illegal  and  unenforceable  in  the  courts  of 
such  foreign  State.2 

(5)  Statutes  merely  giving  the  right  to  the  State  to  bring  pro- 
ceedings to  oust  or  exclude  foreign  corporations  from  doing  business 
within  the  foreign  State  without  having  first  obtained  a  permit  so 
to  do.  Unless  some  other  remedy  is  prescribed  by  statute,  the 
proper  remedy,  in  case  foreign  corporations  engage  unlawfully  in 
business  in  a  foreign  State,  is  for  the  State  to  bring  quo  warranto 
proceedings  to  oust  or  exclude  such  foreign  corporation  from 
doing  business  within  the  foreign  jurisdiction.3  In  such  proceed- 
ings the  courts  have  the  right  to  review,  if  they  see  fit,  the  action 
of  the  Secretary  of  State  in  issuing  a  permit  to  such  foreign 
corporation  to  do  business  within  the  State.4 

§  131.  License  Tax  on  Foreign  Corporations.  —  There  is  a  clear 
distinction  to  be  observed  of  course  between  the  creation  of  a  cor- 
poration under  State  authority  and  the  licensing  of  a  corporation 
already  existing,  to  do  business  within  the  jurisdiction  of  such 
State.5  Sometimes  the  statute  provides  that  after  foreign  cor- 
porations have  complied  with  certain  formalities  relative  to  obtain- 
ing a  permit  to  do  business  within  a  foreign  State,  they  shall 
thereby  ipso  facto  become  domestic  corporations.  Under  such  a 
statute  it  has  been  held  that  they  thereby  become  for  all  pur- 
poses, except  for  such  matters  as  pertain  to  federal  affairs, 
domestic  corporations  and  not  mere  licensed  corporations.6     It 

1  Clarke  v.  Middleton,  19  Mo.  54  ;  Gar-  517  ;  60  N.  W.  121 ;  State  v.  Company,  39 
rett  Ford  Co.  v.  Company,  20  R.  I.  189;     Minn.  538;  41  N.  W.  108. 

J.  C.  M.  T.  Co.  v.  Willhoit,  84  Fed.  514.  4  State  v.  Company,  49  O.  St.  440 ;  31 

2  Dudley  v.  Collier,  87  Ala.  431 ;  16  So.  N.  E.  658  ;  State  v.  Company,  91  Iowa, 
304;  C.  M.  H.  A.  Co.  v.  Rosenthal,  55  111.     517 ;  60  N.  W.  121. 

85  ;  State  v.  Briggs,  116  Ind.  55  ;  18  N.  E.  5  C.  B.  &  Q.  Ry.  Co.  v.  Harris,  12  Wall. 

395 ;    Buxton  v.   Hamblen,  32   Me.   448 ;  U.  S.  65. 

Stewart  v.  Company,  38  N.  J.  Law,  436.  6  Debnam  v.  Company,  126  N.  C.  831 ; 

3  State  v.  Company,  47  O.  St.  167 ;  24  36  S.  E.  269. 
N.  E.  392;   State  v.  Company,  91  Iowa, 

19S 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  132 

has  been  repeatedly  held  by  the  United  States  Supreme  Court 
that  State  legislatures  may  impose  license  taxes  to  any  amount 
upon  foreign  corporations  as  a  condition  to  the  granting  of  the 
right  of  such  foreign  corporations  to  transact  business  in  a 
foreign  State.1 

In  addition  to  the  payment  of  a  tax,  there  are  a  number  of 
other  requirements  in  force  in  the  various  States  differing  one 
from  the  other,  such,  for  example,  as  requiring  the  filing  of  a  copy 
of  the  articles  of  incorporation,  appointing  an  agent  within  the 
State  to  accept  and  receive  service  of  process,  etc.  Such  require- 
ments if  reasonable  are  valid.2 

The  State  may,  if  it  choose,  tax  without  restriction  as  to  amount 
or  entirely  prohibit  a  foreign  corporation  from  doing  business 
within  the  State,  provided,  however,  it  is  not  engaged  in  interstate 
commerce  or  is  in  the  employ  of  the  general  government.3  Some 
States,  such  for  example  as  Ohio,  New  Jersey,  and  Nevada,  adopt 
what  are  known  as  retaliatory  statutes.  The  purpose  of  such 
statutes  is  to  place  foreign  corporations  which  do  business  in  for- 
eign States  under  the  same  regulations  as  are  imposed  by  the 
domiciliary  State  upon  foreign  corporations  seeking  to  do  business 
within  such  State.4 

The  power  of  a  State  to  exclude  foreign  corporations  from 
transacting  business  within  its  borders  cannot  be  questioned, 
neither  can  its  motives  in  so  doing.5 

Thirty-three  of  the  States  have  imposed  the  payment  of  license 
taxes  upon  foreign  corporations  desiring  to  do  business  within  the 
foreign  State. 

§  132.  Annual  License  Tax  on  Foreign  Corporations.  —  The  right 
of  a  State  to  impose  an  annual  license  tax  on  foreign  corporations 
transacting  business  within  its  borders  is  unequivocally  estab- 
lished by  the  decision  of  the  Supreme  Court  of  the  United  States 

*  Paul  v.  Virginia,  8  Wall.  168;  P.  C.  8  Horn  Silver  Mining  Co.  v.  N.  Y.,  143 

S.  M.  &  N.  Co.  v.  Pennsylvania,  125  U.  S.  U.  S.  305 ;  Pierce  v.  People,  106  111.  11  ; 

181  ;  Liverpool  Ins.  Co.  v.  Massachusetts,  State  v.  Phipps,  50  Kan.  609  ;  31  Pac.  1097. 

10  Wall.  576;  Pembina  Min.  Co.  v.  Penn-  4  State   v.  Reinmund,  45  ().  St.  214; 

sylvania,  125  U.  S.  184.  13  N.  E.  30 ;  Miles  v.  Woodward,  115  Cal. 

2  Huffman  v.  Company,  13  Tex.  Civ.  308;  46  Pac.  1076;  State  v.  Company,  39 

Ap.  169  ;  36  S.  W.  306  ;  E.  &  S.  A.  M.  &,  I.  Minn.  538 ;  41  N.  W.  108. 

Co.  v.  Hardy,  93  Texas,  289;    55  S.  W.  6  Doyle   v.   Company,   94  U.   S.  535; 

169;  Utley  v.  Company,  4  Col.  369  ;  Green  Hartford   Fire   Ins.  Co.  v.   Raymond,  70 

v.  Association,  105    Iowa,  628;   15  N.  W.  Mich.  485  ;  38  N.  W.  474. 
935 ;    Hammer   v.    Company,   130    U.    S. 
291. 

199 


§  132    INCORPORATION  AND    ORGANIZATION    OF    CORPORATIONS.    [PART  I. 

in  Horn  Silver  Mining  Co.  v.  State  of  New  York.1     Upon  the  sub- 
ject just  referred  to,  that  court  spoke  as  follows : 

"  The  right  and  privilege,  or  the  franchise,  as  it  may  be  termed, 
of  being  a  corporation,  is  of  great  value  to  its  members,  and  is  con- 
sidered as  property,  separate  and  distinct  from  the  property  which 
the  corporation  itself  may  acquire.  According  to  the  law  of  most 
States  this  franchise  or  privilege  of  being  a  corporation  is  deemed 
personal  property  and  is  subject  to  separate  taxation.  The  right  of 
the  States  to  thus  tax  it  has  been  recognized  by  this  court  and  the 
State  courts  in  instances  without  number.  It  was  said,  in  Delaware 
Railroad  Tax,2  that  '  the  State  may  impose  taxes  upon  the  corporation 
as  an  entity  existing  under  its  laws,  as  well  as  upon  the  capital  stock 
of  the  corporation  or  its  separate  corporate  property.  And  the 
manner  in  which  its  value  shall  be  assessed,  and  the  rate  of  taxation, 
however  arbitrary  or  capricious,  are  mere  matters  of  legislative  dis- 
cretion,' except,  we  may  add,  as  that  discretion  is  controlled  by  the 
Organic  Law  of  the  State.  And,  as  we  there  said  also,  'it  is 
not  for  us  to  suggest  in  any  case  that  a  more  equitable  mode  of 
assessment  or  rate  of  taxation  might  be  adopted  than  the  one  pre- 
scribed by  the  Legislature  of  the  State ;  our  only  concern  is  with 
the  validity  of  the  tax;  all  else  lies  beyond  the  domain  of  our 
jurisdiction.' 

"  The  granting  of  the  rights  and  privileges  which  constitute  the 
franchises  of  a  corporation  being  a  matter  resting  entirely  within  the 
control  of  the  legislature,  to  be  exercised  in  its  good  pleasure,  it  may 
be  accompanied  with  any  such  conditions  as  the  legislature  may 
deem  most  suitable  to  the  public  interests  and  policy.  It  may  impose 
as  a  condition  of  the  grant,  as  well  as,  also,  of  its  continued  exercise, 
the  payment  of  a  specific  sum  to  the  State  each  year,  or  a  portion  of 
the  profits  or  gross  receipts  of  the  corporation,  and  may  prescribe 
such  mode  in  which  the  sum  shall  be  ascertained  as  may  be  deemed 
convenient  and  just.  There  is  no  constitutional  inhibition  against 
the  legislature  adopting  any  mode  to  arrive  at  the  sum  which  it  will 
exact  as  a  condition  of  the  creation  of  the  corporation  or  of  its  con- 
tinued existence.  There  can  be,  therefore,  no  possible  objection  to 
the  validity  of  the  tax  prescribed  by  the  statute  of  New  York,  as  far 
as  it  relates  to  its  own  corporations.  Nor  can  there  be  any  greater 
objection  to  a  similar  tax  upon  a  foreign  corporation  doing  business 
by  its  permission  within  the  State.  As  to  a  foreign  corporation  — 
and  all  corporations  in  States  other  than  the  State  of  its  creation  are 

i  143  U.  S.  305.  2  85  TJ.  S.  (18  Wall.)  206. 

200 


CHAP.  VI. J   LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.    §  132 

deemed  to  be  foreign  corporations  —  it  can  claim  a  right  to  do  business 
in  another  State  to  any  extent,  only  subject  to  the  conditions  imposed 
by  the  laws. 

"This  doctrine  has  been  so  frequently  declared  by  this  court  that  it 
must  be  deemed  no  longer  a  matter  of  discussion,  if  any  question  can 
ever  be  considered  at  rest. 

"Only  two  exceptions  or  qualifications  have  been  attached  to  it  in 
all  the  numerous  adjudications  in  which  the  subject  has  been  con- 
sidered, since  the  judgment  of  this  court  was  announced  more  than 
half  a  century  ago  in  Bank  of  Agusta  v.  Earle.1  One  of  these 
qualifications  is  that  the  State  cannot  exclude  from  its  limits  a 
corporation  engaged  in  interstate  or  foreign  commerce,  established 
by  the  decision  in  Pensacola  Teleg.  Co.  v.  Western  U.  Teleg.  Co.2 
The  other  limitation  upon  the  power  of  the  State  is,  where  the 
corporation  is  in  the  employ  of  the  general  government,  an  obvious 
exception,  first  stated  we  think  by  the  late  Mr.  Justice  Bradley  in 
Stockton  v.  Baltimore  &  N.  Y.  E.  Co.3  As  that  learned  justice  said, 
'  If  Congress  should  employ  a  corporation  of  ship-builders  to  con- 
struct a  man  of  war,  they  should  have  the  right  to  purchase  the 
necessary  timber  and  iron  in  any  State  in  the  Union.'  And  this 
court,  in  citing  this  passage,  added,  'without  the  permission  and 
against  the  prohibition  of  the  State.'  4 

"  Having  the  absolute  power  of  excluding  the  foreign  corporation^ 
the  State  may,  of  course,  impose  such  conditions  upon  permitting  the 
corporation  to  do  business  within  its  limits  as  it  may  judge  expedi- 
ent; and  it  may  make  the  grant  or  privilege  dependent  upon  the 
payment  of  a  specific  license  tax,  or  a  sum  proportioned  to  the  amount 
of  its  capital.  No  individual  member  of  the  corporation  or  the  cor- 
poration itself  can  call  in  question  the  validity  of  any  exaction  which 
the  State  may  require  for  the  grant  of  its  privileges.  It  does  not 
lie  in  any  foreign  corporation  to  complain  that  it  is  subjected  to  the 
same  law  with  the  domestic  corporation.  The  counsel  for  the  ap- 
pellant objects  that  the  statute  of  New  York  is  to  be  treated  as  a 
tax  law,  and  not  as  a  license  to  the  corporation  for  permission  to  do 
business  in  the  State.  Conceding  such  to  be  the  case,  we  do  not 
perceive  how  it  in  any  respect  affects  the  validity  of  the  tax.  How- 
ever it  may  be  regarded,  it  is  the  condition  upon  which  a  foreign  cor- 
poration can  do  business  in  the  State,  and  in  doing  such  business 
it  puts  itself  under  the  law  of  the  State,  however  that  may  be 
characterized." 

1  13  Peters  (U.  S.),  519.  4  Pembina  Con.  S.  Min.  &  Mill.  Co.  v. 

2  96  U.  S.  1.  Pennsylvania,  125  U.  S.  181. 

3  .32  Fed.  Rep.  9. 

201 


§  133    INCOKPORATION  AND    ORGANIZATION    OF    CORPORATIONS.  [PART  I. 

From  the  foregoing  opinion  it  is  clear  that  it  is  unquestionably 
within  the  power  of  the  various  State  legislatures  to  impose  an 
annual  license  tax  upon  foreign  corporations  transacting  business 
within  their  limit.  However,  but  few  of  the  States  have  chosen  thus 
far  to  exercise  this  power.  Alabama,  Colorado,  Massachusetts. 
New  York,  Ohio,  Oregon,  Texas,  Vermont,  Virginia,  Washington, 
and  West  Virginia  are  the  only  States  which  impose  an  annual 
license  tax  upon  foreign  corporations.  In  each  of  these  States  the 
tax  is  a  graduated  one,  the  amount  thereof  depending  either  upon 
the  authorized  capitalization  of  the  corporation,  or  the  amount  of 
the  eapital  stock  represented  by  capital  invested  in  the  foreign 
State  where  such  annual  license  tax  is  imposed. 

§  133.  To  what  Extent  is  the  Taxing  Power  of  the  State  with 
Reference  to  Domestic  and  Foreign  Corporations  Engaged  in  Inter- 
state Commerce  Limited  by  the  "Commerce  Clause"  of  the  Federal 
Constitution  ?  —  The  question  as  to  the  extent  of  the  legislative 
power  of  the  various  State  legislatures  with  reference  to  taxing 
domestic  and  foreign  corporations  must  always  be  arrived  at  'by 
giving  due  consideration  to  the  limitations  imposed  upon  this 
power  by  the  provisions  of  what  is  known  as  the  "Interstate 
Commerce  Clause  of  the  Federal  Constitution."  1 

Again,  this  question,  in  order  to  permit  of  intelligent  consider- 
ation, must  be  viewed  from  four  standpoints,  to  wit :  (1)  What 
effect,  if  any,  has  the  Interstate  Commerce  Clause  of  the  Fed- 
eral Constitution  upon  the  right  of  the  several  States  to  impose 
organization  taxes  upon  corporations  engaged  in  interstate  com- 
merce ?  (2)  What  effect,  if  any,  has  the  Interstate  Commerce 
Clause  of  the  Federal  Constitution  upon  the  right  of  the  several 
States  to  impose  franchise  taxes  upon  corporations  engaged  in 
interstate  commerce  ?  (3)  What  effect,  if  any,  has  the  Interstate 
Commerce  Clause  of  the  Federal  Constitution  upon  the  right  of 
the  several  States  to  impose  license  taxes  upon  corporations 
engaged  in  interstate  commerce  ?  (4)  What  effect,  if  any,  has  the 
Interstate  Commerce  Clause  of  the  Federal  Constitution  upon  the 
right  of  the  several  States  to  impose  property  taxes  upon  corpora- 
tions engaged  in  interstate  commerce  ?  Each  of  these  will  now 
be  taken  up  for  separate  consideration. 

(1)  What  effect,  if  any,  has  the  Interstate  Commerce  Clause 
of  the  Federal  Constitution  upon  the  right  of  the  several  States 

1  See  Constitution  of  the  United  States,  Art.  I.  sec.  8,  clause  3. 
202 


CHAP.  VI.]    LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.   §  133 

to  impose  organization  taxes  upon  corporations  engaged  in  inter- 
state commerce  ?  The  State  is  said  to  possess  inherent  power  to 
tax  its  corporations.  So  the  State  has  undoubted  power  to  exact 
a  bonus  for  the  granting  of  a  franchise,  payable  in  advance  or  in 
futuro,1  A  round  sum  or  an  annual  charge,  with  or  without  ref- 
erence to  capital  stock,  may  be  asked  by  the  legislature  for  such 
a  franchise.2  In  discussing  the  question  of  the  right  of  a  State  to 
impose  a  fee,  a  license  or  a  tax  upon  corporations,  the  Supreme 
Court  of  the  United  States  in  Ashley  v.  Ryan,3  spoke  as  follows  : 

"At  the  time  the  articles  were  presented  for  filing,  the  statute 
law  of  the  State  charged  the  parties  with  notice  that  the  benefits 
which  it  was  sought  to  procure  could  not  be  obtained  without  pay- 
ment of  the  tax  for  consolidation  which  the  Secretary  of  State 
exacted.  As  it  was  within  the  discretion  of  the  State  to  withhold  or 
grant  the  privilege  of  exercising  corporate  existence,  it  was  as  a  neces- 
sary resultant  also  within  its  power  to  impose  whatever  conditions 
it  might  deem  fit  as  prerequisite  to  corporate  life.  The  act  of  filing, 
constituting,  as  it  did,  a  claim  of  a  right  to  the  franchise  granted  by 
the  State  law,  carried  with  it  a  voluntary  assumption  of  any  bur« 
den  with  which  the  privilege  was  accompanied,  and  without  which 
the  right  of  corporate  existence  could  not  have  been  procured. 
Having  thus  accepted  the  act  of  grace  of  the  State  and  taken  the 
advantages  which  sprang  from  it,  the  corporation  cannot  be  per- 
mitted to  hold  on  to  the  privilege  or  right  granted  and  at  the  same 
time  repudiate  the  condition  by  the  performance  of  which  it  could 
alone  obtain  the  privilege  which  it  sought.  That  the  right  to  be  a 
State  corporation  depends  solely  upon  the  grace  of  the  State  and  is 
not  a  right  inherent  in  the  parties,  is  settled. 

"  ...  It  follows  from  these  principles  that  a  State  in  granting  a 
corporate  privilege  to  its  own  citizens,  or,  what  is  equivalent  thereto, 
in  permitting  a  foreign  corporation  to  become  one  of  the  constituent 
elements  of  a  consolidated  corporation  organized  under  its  laws,  may 
impose  such  conditions  as  it  deems  proper,  and  that  the  acceptance 
of  the  franchise  in  either  case  implies  a  submission  to  the  conditions 
without  which  the  franchise  could  not  have  been  obtained." 

The  right  of  the  State  to  impose  such  taxes  upon  the  organiza- 
tion of  a  corporation  is  in  no  wise  affected  by  the  Interstate  Com- 
merce Clause  of  the  Federal  Constitution ;  this,  too,  even  when 

1  B.  &  0.  E.  R.  Co.  v.  Maryland,  88  -  Gordon  v.  Appeal  Tax  Court,  3  How. 

U.  S.  456.  (U.  S.)  134. 

8  153  U.  S.  436 

203 


§  133    INCORPORATION  AND    ORGANIZATION    OF   CORPORATIONS.    [PART  I.. 

the  corporation  is  formed  for  the  express  purpose  of  engaging  in 
interstate  commerce.  In  the  words  of  the  United  States  Supreme 
Court,  "  the  right  and  privilege  of  being  a  corporation  is  of  great 
value  to  its  members,  as  it  is  considered  as  property  separate  and 
distinct  from  the  property  which  the  corporation  may  acquire. 
According  to  the  law  of  most  States  this  franchise,  or  privilege  of 
being  a  corporation,  is  deemed  personal  property  and  is  subject  to 
separate  taxation.  The  right  of  the  State  to  thus  tax  it  has  been 
recognized  by  this  court  and  the  State  courts  in  instances  without 
number."  1 

(2)  What  effect,  if  any,  has  the  Interstate  Commerce  Clause 
of  the  Federal  Constitution  upon  the  right  of  the  several  States 
to  impose  franchise  taxes  upon  corporations  engaged  in  interstate 
commerce  ?  Again,  attention  is  here  called  to  the  decisions  of 
the  United  States  Supreme  Court  relative  to  the  exercise  of  the 
power  in  question.  "  The  granting  of  the  rights  and  privileges," 
observes  that  tribunal,  "  which  constitute  the  franchises  of  a  cor- 
poration, being  a  matter  resting  entirely  within  the  control  of  the 
legislature,  to  be  exercised  in  its  good  pleasure,  it  may  be  accom- 
panied with  any  such  conditions  as  the  legislature  may  deem  most 
suitable  to  the  public  interests  and  policy.  It  may  impose  as  a 
condition  of  the  grant  as  well  as  also  of  its  continued  exercise, 
the  payment  of  a  specific  sum  to  the  State  each  year,  or  a  portion 
of  the  profits  or  gross  receipts  of  the  corporation,  and  may  pre- 
scribe such  mode  in  which  the  sum  shall  be  ascertained  as  may 
be  deemed  convenient  and  just.  There  is  no  constitutional  inhi- 
bition against  the  legislature  adopting  any  mode  to  arrive  at  the 
sum  which  it  will  exact  as  a  condition  of  the  creation  of  the 
corporation  or  of  its  continued  existence.  There  can  be,  there- 
fore, no  possible  objection  to  the  validity  of  the  tax  prescribed 
by  the  statutes  of  any  State  so  far  as  it  relates  to  its  own  corpora- 
tions, nor  can  there  be  any  greater  objection  to  a  similar  tax 
upon  a  foreign  corporation  doing  business  by  its  permission 
within  the  State.  As  to  a  foreign  corporation,  it  can  claim  a 
right  to  do  business  in  another  State  to  any  extent  only  subject  to 
the  conditions  imposed  by  its  statutes.  Only  two  exceptions  or 
qualifications  have  been  attached  to  the  foregoing,  to  wit :  One  is 
that  the  State  cannot  exclude  from  its  limits  a  corporation  en- 

i  Horn  Silver  Mining  Co.  v.  New  York,     York,  134   U.  S.   594;    Delaware    R.   II. 
143  U.  S.  305 ;    Home  Ins.   Co.  v.  New     Tax,  85  U.  S.  206. 
204 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  133 

gaged  in  interstate  or  foreign  commerce.  The  other  limitation  is 
that  where  the  corporation  is  in  the  employ  of  the  government. 
Raving  the  absolute  power  to  exclude  the  foreign  corporation,  the 
State  may  of  course  impose  such  conditions  upon  permitting  the 
corporation  to  do  business  within  its  limits  as  it  may  judge  expe- 
dient ;  and  it  may  make  the  grant  or  privilege  dependent  upon 
the  payment  of  a  specific  license  tax  or  a  sum  proportioned  to  the 
amount  of  its  capital.  No  individual  member  of  the  corporation 
or  the  corporation  itself  can  call  in  question  the  validity  of  any 
exaction  which  the  State  may  require  for  the  grant  of  its  priv- 
ileges. It  does  not  lie  in  any  foreign  corporation  to  complain  that 
it  is  subjected  to  the  same  law  with  the  domestic  corporation."  * 

In  a  certain  sense  the  imposition  of  an  organization  tax  is  as 
much  the  levying  of  a  franchise  tax  as  the  imposition  by  a  State 
of  annual  taxes  upon  corporations  in  return  for  the  right  to  exer- 
cise their  corporate  powers  within  the  jurisdiction  of  the  State. 
The  one  has  been  defined  to  be  a  "franchise  to  be,"  and  the  other 
as  a  "  franchise  to  do."  2 

(3)  What  effect,  if  any,  has  the  Interstate  Commerce  Clause 
of  the  Federal  Constitution  upon  the  right  of  the  several  States 
to  impose  license  taxes  upon  corporations  engaged  in  interstate 
commerce?  Strictly  speaking,  the  imposition  of  a  franchise  tax 
has  reference  only  to  domestic  corporations,  while  license  taxes, 
when  applied  to  corporations,  have  reference  not  only  to  domestic 
corporations,  but  to  foreign  corporations  as  well.  Foreign  cor- 
porations, as  such,  can  be  taxed  by  foreign  States  only  upon 
corporate  property  situated  within  such  foreign  State,  or  upon  the 
business  done  there.  They  cannot  be  taxed  in  a  foreign  State  on 
account  of  their  corporate  franchises,  as  that  was  not  given  by 
the  laws  of  the  foreign  State  but  was  dependent  upon  the  laws  of 
the  State  of  its  creation  and  had  an  existence  separate  therefrom. 
A  corporation  may,  through  its  agents,  extend  its  operations  into 
other  States,  and  thus,  metaphorically  speaking,  go  there ;  but  it 
never  really  travels,  and  its  franchises  exist  only  at  the  place  of 
its  domicile  and  residence.3 

1  Horn  Silver  Mining  Co.  v.  New  York,  Tax  Cases,  92  U.  S.  603;  California  v. 
143  U.  S.  305.  Company,  127  U.  S.  1 ;  Society  for  Savings 

2  Ailains  Express  Co.  v.  Ohio,  166  v.  Coite,  6  Wall.  606;  Maine  v.  l.'y.  Co., 
U.  S.  22+;    Home  Insurance  Co.   v.  New  142  II.  S   227. 

York,  134  U.  S.  600;  Reading  R.  R.  v.  '■  People  v.  Equitable  Trust  Co.,  96  N.Y. 
Pennsylvania,  15  Wall.  296;  State  R.  R.     387;   Plimpton  v.  Bigelow,  98  N.  V.  592, 

205 


§  133    INCORPORATION  AND    ORGANIZATION   OF   CORPORATIONS.  [PART  r. 

On  the  other  hand,  there  is  clear  distinction  between  a  license 
tax  and  a  property  tax.  The  former  involves  a  charge  for 
permission  or  authority  to  transact  certain  business,  while  the 
latter,  when  applied  to  corporations,  is  a  contribution  imposed 
upon  and  measured  by  the  property  of  the  corporation.1 

The  right  to  impose  a  license  tax  upon  corporations  is  subject 
to  the  following  limitation :  If  the  tax  is  essentially  a  regulation 
of  interstate  commerce  and  its  imposition  does  not  constitute 
a  proper  exercise  of  the  police  power  of  the  State,  then  it  comes 
within  the  inhibition  of  the  Interstate  Commerce  Clause  of  the 
Federal  Constitution.2 

Again,  in  Pembina  Consolidated  Silver  Mining  &  Milling  Co. 
v.  Pennsylvania,3  the  United  States  Supreme  Court  spoke  as 
follows  : 

"  The  exaction  of  a  license  fee  to  enable  the  corporation  to  have  an 
office  for  the  transaction  of  its  business  within  a  foreign  State  is 
clearly  within  the  competency  of  the  legislature  of  that  State.  The 
recognition  of  the  foreign  corporation's  existence  in  a  foreign  State, 
even  to  the  extent  of  allowing  it  to  have  an  office  within  its  limits 
for  the  use  of  its  officers,  agents,  and  employees,  was  a  matter  de- 
pendent upon  the  will  of  the  State.  It  could  make  the  grant  of  the 
privilege  conditional  upon  payment  of  a  license  tax  and  fix  the  same 
according  to  the  amount  of  the  authorized  capital  of  the  corporation. 
The  absolute  power  of  exclusion  includes  the  right  of  a  conditional 
and  restricted  exercise  of  its  corporate  powers  within  the  State. 
The  equal  protection  of  the  laws  which  these  bodies  may  claim  is  only 
such  as  is  accorded  to  similar  associations  within  the  jurisdiction  of 
the  State.  The  plaintiff  in  error  is  not  a  corporation  within  the 
jurisdiction  of  Pennsylvania.  The  office  it  hires  is  within  such  juris- 
diction, and  on  condition  that  it  pays  the  required  license  tax  it  can 
claim  the  same  protection  in  the  use  of  the  office  that  any  other  cor- 
poration having  a  similar  office  may  claim.  It  would  then  have  the 
equal  protection  of  the  law  so  far  as  it  had  anything  within  the 
jurisdiction  of  the  State,  and  the  constitutional  amendment  requires 
nothing  more.  The  State  is  not  prohibited  from  discriminating  in 
the  privileges  it  may  grant  to  foreign  corporations  as  a  condition  of 
their  doing  business  or  hiring  offices  within  its  limits,  provided 
always  such  discrimination  does  not  interfere  with  any  transaction 

i  Cooley  on  Taxation,  2nd  ed.  pp.  383,  2  People  ex  rel.  Pennsylvania  R.  R.  v. 

576;  Welton  v.  Missouri,  91  U.  S.  275;  Wemple,  138  N.  Y.  1. 
Emert  v.  Missouri,  156  U.  S.  296.  3  125  U.  S.  181. 

206 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  133 

by  such  corporations  of  interstate  or  foreign  commerce.  It  is  not 
every  corporation  lawful  in  the  State  of  its  creation  that  other  States 
may  be  willing  to  admit  within  their  jurisdiction  or  consent  that  it 
have  offices  in  them;  such,  for  example,  as  a  corporation  for  lotteries. 
And  even  where  the  business  of  a  foreign  corporation  is  not  unlawful 
in  other  States  the  latter  may  wish  to  limit  the  number  of  such  cor- 
porations or  to  subject  their  business  to  such  control  as  would  be  in 
accordance  with  the  policy  governing  domestic  corporations  of  a 
similar  character.  The  States  may  therefore  require  for  the  admis- 
sion within  their  limits  of  the  corporations  of  other  States,  or  of  any 
number  of  them,  such  conditions  as  they  may  choose,  without  acting 
in  conflict  with  the  concluding  provision  of  the  first  section  of  the 
Fourteenth  Amendment. 

"  The  only  limitation  upon  this  power  of  the  State  to  exclude  a 
foreign  corporation  from  doing  business  within  its  limits,  or  hiring 
offices  for  that  purpose,  or  to  exact  conditions  for  allowing  the  cor- 
poration to  do  business  or  hire  offices  there,  arises  where  the  cor- 
poration is  in  the  employ  of  the  Federal  Government,  or  where  its 
business  is  strictly  commerce,  interstate  or  foreign.  The  control  of 
such  commerce,  being  in  the  Federal  Government,  is  not  to  be 
restricted  by  State  authority." 

In  "Waters  Pierce  Oil  Co.  v.  Texas 1  it  was  said  that : 

"  Having  no  absolute  right  of  recognition  in  other  States,  but  de- 
pending for  such  recognition  and  enforcement  of  its  contracts  upon 
their  assent,  it  follows,  as  a  matter  of  course,  that  such  assent  may 
be  granted  upon  such  terms  and  conditions  as  those  States  may 
think  proper  to  impose.  They  may  exclude  the  foreign  corporation 
entirely;  they  may  restrict  its  business  to  particular  localities,  or 
they  may  exact  such  security  for  the  performance  of  its  contracts 
with  their  citizens  as  in  their  judgment  will  best  promote  the  public 
interest.     The  whole  matter  rests  in  their  discretion." 

In  Hooper  v.  California,2  conditions  imposed  upon  a  foreign 
corporation  were  considered,  and  a  statute  was  sustained,  making 
it  a  misdemeanor  for  a  person  in  California  to  procure  insurance 
for  a  resident  in  that  State  from  an  insurance  company  not  incor- 
porated under  its  laws,  and  which  had  not  filed  a  bond  required 
by  the  law  of  the  State.  All  preceding  cases  were  cited,  and  it 
was  assumed  as  settled  "  that  the  right  of  a  foreign  corporation  to 
engage  in  business  within  a  State  other  than  that  of  its  creation, 

»   177  U   S   28.  a  l-r)5  U.  S.  648;  39  L.  Ed.  297. 

207 


§  133    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

depends  solely  upon  the  will  of  such  other  State."  And  the  ex- 
ception to  the  rule  was  stated  to  be  "  only  cases  where  a  corpora- 
tion created  by  one  State  rests  its  right  to  enter  another  and 
to  engage  in  business  therein  upon  the  federal  nature  of  its 
business." 

A  State  may  tax  the  franchise  of  a  domestic  corporation  or 
impose  a  license  tax  upon  a  foreign  corporation,  but  can  only 
subject  a  corporation  engaged  in  interstate  commerce  or  in  the 
employ  of  the  general  government  to  such  property  taxation  as 
only  incidentally  affects  its  occupation,  as  all  business,  whether  of 
individuals  or  corporations,  is  affected  by  common  governmental 
burdens.1 

The  power  to  license  is  a  police  power,  although  it  may  be  exer- 
cised for  the  purpose  of  raising  revenue.2  But  the  State  in  the 
exercise  of  the  police  power  cannot  impede  interstate  commerce 
by  discriminating  taxes.3 

The  question  next  arises  as  to  what  constitutes  a  proper  exer- 
cise of  the  police  power  on  the  part  of  a  State.  A  State  may  law- 
fully in  the  exercise  of  this  power  provide  for  security  of  lives, 
limbs,  health,  and  comfort  of  persons  and  protection  of  property, 
or  in  regulation  of  highways,  canals,  railways,  and  other  commer- 
cial facilities,  passage  of  laws  to  regulate  sale  of  articles  deemed 
injurious  to  health  or  morals  of  community  ;  imposition  of  taxes 
on  persons  residing  within  the  State  and  upon  occupations  pursued 
therein,  not  directly  connected  with  foreign  or  interstate  com- 
merce or  with  some  other  business  exercised  under  authority  of 
the  United  States  and  imposition  of  taxes  upon  all  property 
within  the  State  mingled  with  and  forming  part  of  the  great  mass 
of  property  therein.4 

(4)  What  effect,  if  any,  has  the  interstate  commerce  clause  of 
the  Federal  Constitution  upon  the  right  of  the  several  States  to 
impose  property  taxes  upon  corporations  engaged  in  interstate 
commerce  ? 

1  Postal  Telegraph  Co.  v.  Adams,  155  576  ;  Philadelphia,  etc.  Ass'n  v.  New  York, 
U.  S.  696.  119  U.  S.  119;  Horn  Silver  Mining  Co.  v. 

2  Wiggins  Co.  v.  East  St.  Louis,  107  New  York,  143  U.  S.  305  ;  Postal,  etc. 
U.  S.  374.  Cable  Co.  v.  Charleston,   153  U.  S.  693  ; 

3  Austin  v.  Tennessee,  179  U.  S.  344;  Martin  v.  R.  R.,  151  U.  S.  677;  Hooper  v. 
License  Cases,  5  How.  (U.  S.)  592.  California,    155  U.   S.    652;    Bonman   v. 

4  Robbins  v.  Shelby  Co.  Tax  Dis-  Railway,  125  U.  S.  491;  Smith  v.  Alabama, 
trict,   120  U.  S.  493.     See  also  Liverpool  124  U.  S.  474. 

Ins.  Co.  v.  Massachusetts,  10  Wall.  (U.  S.) 
208 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  133 

A  State  may  tax  corporations  for  their  privileges  within  the 
State  in  lieu  of  all  other  taxes,  provided  the  amount  is  made 
dependent  on  the  value  of  its  property  within  the  State  and  pay- 
ment is  not  a  condition  precedent  to  the  right  to  carry  on  its 
business.  The  tax  then  becomes  a  mere  property  tax  and  not  an 
interference  with  interstate  commerce.1 

The  existence  of  federal  supervision  over  interstate  commerce 
is  not  inconsistent  with  the  power  of  the  State  to  control  its 
internal  commerce  and  to  tax  franchises,  property,  or  business  of 
domestic  corporations  engaged  in  such  commerce,  nor  with  power 
to  tax  foreign  corporations  on  property  within  the  State.2  In  this 
connection  it  has  been  well  said  that 

"commerce  between  the  States  consists  of  intercourse  and  traffic 
between  their  citizens  and  includes  the  transportation  of  persons  and 
property,  and  the  navigation  of  public  waters  for  that  purpose  as 
well  as  the  purchase,  sale,  and  exchange  of  commodities.  It  makes 
no  difference  whether  such  commerce  is  carried  on  by  individuals  or 
by  corporations.  It  is  true  that  the  property  of  corporations  engaged 
iu  foreign  or  interstate  commerce,  as  well  as  the  property  of  cor- 
porations engaged  in  other  business,  is  subject  to  State  taxation, 
provided  always  it  is  within  the  jurisdiction  of  the  State.  Where 
there  is  jurisdiction  on  the  part  of  the  State  neither  as  to  persons 
nor  property,  the  imposition  of  a  tax  is  unconstitutional  and  void. 
If  the  legislature  of  a  State  enacted  that  the  citizens  of  another 
State  or  country  should  be  taxed  in  the  same  manner  as  the  persons 
within  its  own  limits,  and  subject  to  its  authority  or  in  any  other 
manner  whatsoever,  such  a  law  would  be  as  much  a  nullity  as  if  in 
conflict  with  the  most  explicit  constitutional  inhibition.  Jurisdiction 
is  as  necessary  to  valid  legislative  as  to  valid  judicial  action.  It  has 
been  repeatedly  decided,  and  is  settled  law,  that  a  tax  upon  the  capital 
stock  of  a  corporation  is  a  tax  upon  its  property  and  assets  ;  that  it 
is  undoubtedly  competent  for  the  legislature  to  lay  a  franchise  or 
license  tax  upon  foreign  corporations  for  the  privilege  of  doing  busi- 
ness within  the  State,  but  that  such  a  tax  is  in  no  sense  a  license  tax. 
It  is  a  fundamental  principle  that  in  order  to  tax  the  corporation  it 
must  have  a  domicile  within  the  State;  that  when  it  is  sought  to  tax 
capital  stock  of  a  corporation,  the  law  imposing  such  a  tax  must  be 
construed  to  mean  so  much  of  the  capital  stock  as  is  measured  by  the 
property  actually  brought  within  the  State  by  the  corporation  in  the 
transaction  of  its  business.  To  the  States  must  be  conceded  power 
i  Postal  Tel.  Co.  v.  Adams,  155  U.S.  -  Erie  R.  R.  v.  Pennsylvania,  158 
696.  U.   S.   4.i7. 

u  209 


§  133   INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

to  exclude  foreign  corporations  altogether  from  its  borders  or  to 
impose  a  license  tax  so  heavy  as  to  amount  to  the  same  thing.  They 
must  be  denied  the  power  to  tax  either  persons  or  property  not 
within  their  jurisdiction."  1 

1  Gloucester  Ferry  Co.  v.  Pennsylvania,  136   U.    S.    120;    Ashley   v.    Ryan,    153 

114  U.  S.  196.    See  also  Philadelphia,  etc.  U.  S.  446;  Erie    R.  R.  v.  Pennsylvania 

Steamship  Co.  v.  Pennsylvania,  122  U.  S.  158  U.  S.437  ;  New  York  State  v.  Roberts, 

345  ;   Norfolk,  etc.,R.  R.  v.  Pennsylvania,  171  U.  S.  665. 


210 


PAET   II. 

SYNOPSIS-DIGEST  OF  THE  INCORPORATION 
ACTS  OF  THE  SEVERAL  STATES  AND  TER- 
RITORIES  OF  THE   UNITED   STATES. 

(Revised  to  July  1st,  1912.) 


ALABAMA. 

(The  references  are  to  the  Code  of  Alabama,  1907,  where  not  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  —  Busi- 
ness corporations  are  organized  under  the  Act  of  October  2,  1903,  found  in  the 
Acts  of  Alabama,  1903,  page  310.  This  act  will  be  found  contained  in  Chapter 
69  of  the  Code  of  Alabama,  1907,  which  went  into  effect  May  1,  1908.  Under 
this  act  corporations  may  be  organized  "for  any  lawful  business  or  businesses 
of  any  kind  or  nature  whatsoever." 

2.  Incorporators.  —  Three  or  more.  There  are  no  residential  require- 
ments (sec.  3445).  Each  of  the  incorporators  must  be  a  subscriber  for  at 
least  one  share  of  stock  (sec.  3446). 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate  must 
contain  (sec.  3446) : 

a.  Name.  —  Similarity  of  names  is  forbidden.  If  the  name  of  a  person  or 
partnership  be  assumed,  it  must  be  followed  by  the  addition  of  some  word 
designating  the  nature  of  at  least  one  of  the  businesses  to  be  carried  on,  followed 
by  the  word  "Company"  or  "Corporation,  and  Inc." 

6.  Purposes.  —  The  objects  for  which  the  corporation  is  to  be  formed. 
Corporations  may  be  formed  under  the  General  Act  for  any  purpose  whatever, 
and  for  as  many  purposes  as  desired.  The  only  limitation  is  that  banking  and 
trust  company  powers  cannot  be  exercised  by  corporations  formed  for  any 
other  purpose. 

G.  L.  &  H.  Ins.  Co.  v.  Hamper,  73  Ala.  325;    Beggs  v.  Company,  96  Ala.  295. 

c.  Domiciliary  Office.  —  Location  of  principal  office  in  the  State. 

d.  Capital  Stock.  —  The  amount  of  total  authorized  capital  stock  not  to  be 
less  than  $2,000.  There  is  no  maximum  limit.  The  number  of  shares  into  which 
it  is  divided,  also  amount  of  capital  stock  with  which  it  will  commence  busim 
not  to  be  less  than  twenty-five  per  cent  of  the  authorized  capital,  in  no  case  le 
than  $1,000.  If  there  be  more  than  one  class  of  stock,  the  certificate  must 
contain  a  description  of  the  different  classes  of  stock,  with  the  terms  on  which 
each  class  is  created. 

Nelson  v.  Hubbard,  96  Ala.  238. 

211 


DIGEST    OF    INCORPORATION    ACTS.  —  ALABAMA. 

e.  Subscription  Agent.  —  The  name  and  post-office  address  of  the  officer  or 
agent  designated  by  the  incorporators  to  receive  subscriptions  to  the  capital 
stock. 

/.  Incorporators,  Directors,  and  Officers.  —  Names  and  addresses  of  the  in- 
corporators, together  with  the  number  of  shares  subscribed  for  by  each,  this 
representing  the  amount  of  capital  stock  with  which  the  corporation  will  begin 
business.  In  addition,  the  incorporators'  names,  and  names  and  addresses  of 
the  directors  and  officers  for  the  first  year  must  be  given.  (See  ante,  sec.  2,  and 
post,  sec.  12.) 

g.  Corporate  Existence.  —  Duration  of  corporate  existence,  which  may  be 
perpetual  if  desired. 

h.    Corporate  Rules  and  Regulations.  —  Provisions  desired  for  the  regulation 

of  the  business  and  for  the  conduct  of  the  affairs  of  the  corporation,  creating 

and  defining  the  powers  of  the  corporation,  the  directors  and  stockholders  or 

any  class  or  classes  of  stockholders. 

Note.  —  Additional  statements  are  required  for  railway  transportation,  canal,  telegraph, 
telephone,  and  public  utility  corporations  (see  sec.  3446,  sub.  1,  8,  9). 

4.  Statutory  Powers.  —  The  statute  gives  to  corporations  organizing 
under  the  General  Act  the  following  powers,  which  being  such  as  existed  at 
common  law  without  any  statutory  enumeration  thereof  may  be  termed  "com- 
mon law  powers."  They  are  as  follows:  (1)  The  power  of  succession;  (2)  to 
sue  and  be  sued ;  (3)  to  make,  use,  and  alter  the  corporate  seal ;  (4)  to  adopt 
by-laws ;  (5)  to  purchase  and  hold  real  property  for  the  purposes  of  the  organi- 
zation ;  (6)  to  receive  and  grant  by  the  corporate  name ;  (7)  to  appoint  officers 
and  agents;  (8)  to  borrow  money ;  (9)  to  issue  negotiable  paper ;  (10)  to  mort- 
gage the  corporate  property  (Id.  sec.  72). 

Falconer  v.  Campbell,  2  McLean,  195. 

In  addition  to  the  foregoing  statutory  enumeration  of  the  common  law 
powers  of  corporations,  the  following  additional  powers  are  conferred :  To  hold 
stockholders'  and  directors'  meetings  without  the  State,  provided  certain  pre- 
liminary formalities  are  observed  (sec.  3481,  sub.  7);  to  carry  on  corporate 
business  in  other  States  and  foreign  countries  (sec.  3481,  sub.  9) ;  to  subscribe 
for,  purchase,  and  hold  stock  and  bonds  of  other  corporations  (sec.  3481,  sub. 
10) ;  under  certain  conditions  to  operate  railroads  (sec.  3485) ;  to  issue  bonds 
and  mortgages  or  create  indebtedness  without  limit  with  the  consent  of  a  major- 
ity of  the  stockholders  first  obtained  (sec.  3481,  sub.  3);  to  accept  real  and  per- 
sonal property  in  payment  of  capital  stock  (sec.  3481,  sub.  3) ;  to  create  liens 
upon  the  stock  of  members  for  debts  due  the  corporation  (sec.  3481,  sub.  5; 
as  to  power  of  corporations  to  consolidate  see  sec.  3481,  sub.  11,  sees.  3502- 
3508  inclusive). 

Railway,  mining,  manufacturing,  and  quarrying  corporations  may  construct, 
acquire,  and  operate  steamboats,  barges,  ships  for  transportation  of  freight  and 
passengers  (sec.  3494).  They  may  also  subscribe  for  or  aid  any  other  corpora- 
tion in  the  construction  of  a  railroad,  etc.  (sec.  3496). 

Mining,  manufacturing,  and  quarrying  corporations  may  construct  and 
operate  to  and  from  their  plants,  railways,  tramways,  canals,  tunnels,  and 
roads,  and,  as  common  carriers,  transport  freight  and  passengers  thereon  (sec. 
3500). 

Only  corporations  formed  for  the  transaction  of  a  banking  or  trust  com- 
pany business  can  engage  in  banking  within  the  State  (sec.  3524). 

212 


DIGEST    OF    INCORPORATION    ACTS. — ALABAMA. 

Corporations  also  have  power  to  issue  preferred  stock ;  to  authorize  voting  by 
proxy  at  stockholders'  meeting  ;  to  forfeit  stock  for  non-payment  of  assessments 
(sec.  3446,  sub.  4;   sees.  3479,  3478,  3476). 

Chemacla  Lime  Works  t>.  Dismukes,  87  Ala.  344;  Westinghouse  Machine  Co.  v.  Wilkinson, 
79  Ala.  312;  Simmons  v.  Troy  Iron  Works,  92  Ala.  427;  Nelson  v.  Hubbard,  96  Ala.  238; 
A.  I.  &  I.  Co.  v.  McKeever,  112  Ala.  134;  London  v.  Sample  Lumber  Co.,  91  Ala.  606;  Perry 
v.  Company,  93  Ala.  364. 

5.  Procuring  the  Charter.  —  The  certificate  must  be  signed  by  all  the 
subscribers  to  the  capital  stock  named  therein.  The  statute  does  not  expressly 
require  that  the  certificate  be  acknowledged  by  the  subscribers.  The  certifi- 
cate must  then  be  filed  and  recorded  in  the  office  of  the  probate  judge  of  the 
county  where  the  corporation  will  have  its  principal  place  of  business.  After 
it  has  been  recorded  the  probate  judge,  endorses  thereon  a  certificate  of  regis- 
tration. Within  ten  days  after  the  filing  of  the  certificate  in  the  office  of  the 
probate  judge,  the  corporation  must  cause  to  be  filed  in  the  office  of  the  Secre- 
tary of  State  a  statement  signed  by  said  probate  judge,  giving  the  name  of 
the  corporation,  the  names  of  its  incorporators,  the  date  of  the  incorporation, 
the  amount  of  the  capital  stock,  and  the  name  of  the  county  in  which  located. 
For  filing  such  statement  a  fee  of  fifty  cents  must  be  paid  to  Secretary  of  State. 
The  certificate  must  have  attached  to  it  a  statement  under  oath  by  the  person 
authorized  by  the  incorporators  to  receive  subscriptions  to  the  capital  stock, 
which  shall  show  the  amount  of  capital  stock  which  has  been  paid  in  and  the 
amount  of  stock  secured  by  contracts  for  stipulated  labor  or  services  or  transfer 
of  property,  which  amount  shall  be  at  least  twenty  per  cent  of  the  stock  sub- 
scribed for,  and  in  no  case  less  than  $1,000.  At  the  time  the  certificate  is  filed 
with  the  judge  of  probate  the  incorporators  must  pay  the  organization  tax  to 
the  judge  of  probate.  A  copy  of  the  subscription  list  must  be  also  attached 
to  the  certificate  (sees.  3446-3450  inclusive). 

Corporate  existence  commences  as  soon  as  the  articles  are  filed  and  recorded 
in  the  office  of  the  probate  judge  of  the  county  where  the  domiciliary  office  is 
located  and  the  organization  tax  and  filing  fees  paid  (sec.  3454). 

O.  W.  Co.  v.  Bliss,  132  Ala.  253 ;  31  Sou.  81 ;  M.  &  O.  Ry.  Co.  v.  P.  T.  C.  Co.,  120  Ala.  21 ; 
24  Sou.  408;  N.  C.  Bank  v.  McDonnell,  92  Ala.  387;  9  Sou.  149;  Harris  v.  G.  L.  Co.,  128  Ala. 
652;  29  Sou.  611;  Boiling  &  Son  v.  Le  Grand,  87  Ala.  482;  6  Sou.  332;  Bebb  v.  Hall  & 
Farley,  101  Ala.  79;  14  Sou.  98;  C.  &  C.  Co.  v.  Lumber  Co.,  121  Ala.  340;  25  Sou.  566;  Sav- 
age v.  Company,  84  Ala.  103;  4  Sou.  235;  Sparks  v.  Company,  87  Ala.  294;  6  Sou.  195;  Cen. 
Ry.  of  Ga.  v.  Company,  144  Ala.  639. 

6.  Corporate  Indebtedness.  —  There  is  no  statutory  limit  upon  the 
amount  of  indebtedness  that  may  be  contracted  by  a  business  corporation. 
To  create  a  bonded  indebtedness  or  increase  the  same,  or  to  mortgage  the  rea  1 
property  of  the  corporation,  the  vote  of  the  larger  amount  of  stock  present 
and  voting  at  a  meeting  duly  called  for  that  purpose  must  be  had  (sec.  3481 , 
sub.  3). 

Under  the  Constitution  (Art.  XIV.  sec.  6)  corporations  cannot  issue  bonds 
except  for  money,  labor  done,  or  money  or  property  actually  received,  and  all 
fictitious  increase  of  indebtedness  shall  be  void. 

Nelson  v.  Hubbard,  96  Ala.  238;  11  Sou.  428;  Dexter  v.  McClellan,  116  Ala.  37;  22  Sou. 
461. 

7.  Organization  Tax.  —  At  the  time  the  certificate  is  filed  in  the  office  <>f 
the  judge  of  probate  the  incorporators  must  pay  to  him  for  the  use  of  the  Stale 
a  charter  fee  of  one  dollar  for  every  $1,000  of  authorized  capital  stock,  bul  in 
no  case  less  than  $5  (sec.  3450). 

213 


DIGEST    OF    INCORPORATION    ACTS.  —  ALABAMA. 

8.  Filing  and  Recording  Fees.  —  To  the  probate  judge  for  recording  cer- 
tificate of  incorporation  fifteen  cents  for  each  one  hundred  words;  for  examining 
the  certificate  $2.50  (sec.  3449) ;  for  filing  the  statement  required  by  section  3455 
to  be  filed  with  the  Secretary  of  State,  there  shall  be  paid  to  the  probate  judge 
of  the  county  in  which  the  company  was  organized  a  fee  of  $2.50  for  the  use  of 
the  State  (sec.  3455). 

9.  Commencing  Business. — Twenty-five  per  cent  of  the  authorized 
■capital  stock  of  a  corporation  must  be  subscribed  in  good  faith,  payable  in 
money  before  the  commencement  of  corporate  existence,  but  subscribers 
may  have  the  privilege  of  discharging  the  same  in  services,  labor,  or  property 
at  the  reasonable  value  for  such  services,  labor  or  property.  Twenty  per 
cent  of  all  subscriptions  for  stock  must  be  actually  paid  in,  and  said  amount 
must  never  be  less  in  the  aggregate  than  $1,000  (sec.  3446,  sub.  4:  sec.  3447). 
Business  must  be  commenced  within  five  years  from  the  date  that  the  charter 
issues  (sec.  3515). 

10.  Organization  Meetings.  —  A  preliminary  organization  is  effected  by 
the  incorporators  meeting  within  the  State  (by  proxy,  if  desired)  and  author- 
izing some  person  to  receive  subscriptions  to  the  capital  stock  of  the  proposed 
corporation.  After  the  charter  is  secured  from  the  State  by  the  compliance 
with  the  necessary  formalities  prescribed  by  statute  (as  stated  above),  the 
incorporators,  who,  under  the  statute,  must  likewise  be  subscribers  to  the 
capital  stock,  should  sign  a  written  consent  to  the  holding  of  an  organization 
meeting,  fixing  the  time  and  place  for  holding  the  same.  The  incorporators 
should  then  organize  by  adopting  by-laws  and  by  the  transaction  of  other 
routine  organization  business.  There  is  no  statutory  time  prescribed  within 
which  this  organization  meeting  must  be  held,  the  law  simply  providing 
that  non-user  of  corporate  franchise  for  a  period  of  five  consecutive  years 
is  a  forfeiture   of   such   franchise. 

11.  Meetings,  Stockholders'  and  Directors'.  —  In  the  absence  of  the 
written  consent  of  all  resident  stockholders,  stockholders'  meetings  must  be 
held  within  the  State,  but  such  meetings  may  be  held  without  the  State  upon 
the  written  consent  of  such  resident  stockholders  acknowledged  before  an  officer 
authorized  to  take  acknowledgments  and  recorded  in  the  office  of  the  Secretary 
of  State.  All  corporations  holding  their  stockholders'  meetings  without  the 
State  must  give  the  name  and  residence  within  the  State  of  the  agent  in  charge 
of  their  principal  office  within  the  State,  to  be  signed  by  the  president  or  sec- 
retary of  the  corporation  under  the  corporate  seal.  The  certificate  should  then 
be  filed  in  the  office  of  the  Secretary  of  State  and  in  the  office  of  the  probate 
judge  of  the  county  in  which  it  has  its  principal  office.  A  copy  of  all  proceed- 
ings had  at  stockholders'  and  directors'  meetings  held  without  the  State  must 
be  deposited  with  such  agent.  Written  consent  of  the  stockholders  residing 
within  the  State,  for  stockholders'  meetings  to  be  held  without  the  State  when 
filed  in  the  office  of  the  Secretary  of  State,  shall  remain  in  force  until  revoked. 
Directors'  meetings  may  be  held  within  or  without  the  State  as  the  by-laws 
may  provide  (sec.  3481,  sub.  7.     As  to  notice  of  meetings,  see  sec.  3478). 

Brockway  v.  G.  M.  L.  Co.,  102  Ala.  620;   15  Sou.  431. 

12.  Directors'  Qualifications  and  Liabilities.  —  a.  Qualifications.  There 
must  be  at  least  three  directors,  who  shall  be  stockholders  and  hold  office  for 
one  year  or  until  their  successors  are  elected.  There  are  no  residential  require- 
ments (sec.  3463). 

214 


DIGEST    OF    INCORPORATION    ACTS. — ALABAMA. 

b.  Liabilities.  —  Any  president,  director,  or  managing  officer  of  any  cor- 
poration, by  whatsoever  name  or  title  he  may  be  known  or  called  should  so  do 
or  omit  to  do  any  act  or  should  so  make  any  declaration  or  statement  in  writing 
or  otherwise,  with  the  intent  to  depreciate  the  market  value  of  the  stock  or  bonds 
of  such  corporation,  and  with  the  further  intent  to  enable  BUCh  president,  director, 
or  other  managing  officer  or  any  other  person  to  buy  any  such  stock  or  bonds 
at  less  than  the  real  value  thereof,  must  on  conviction  be  fined  not  more  than 
S500  and  shall  be  sentenced  to  hard  labor  for  the  county  for  not  less  than  five 
nor  more  than  twelve  months  (sec.  6623).  Any  officer,  agent,  or  servant  of  any 
private  or  municipal  corporation,  who  keeps  false  books  or  accounts  or  makes 
false  entries  therein,  with  the  intent  to  deceive,  injure,  or  defraud  such  corpora- 
tion or  the  officers  or  agents  thereof,  or  if  a  private  corporation,  the  stockholders 
therein,  must  on  conviction  be  fined  not  less  than  S100  nor  more  than  SI, 000, 
and  may  also  be  sentenced  to  hard  labor  for  the  county  for  not  more  than  two 
years,  one  or  both,  at  the  discretion  of  the  jury  (sec.  6927). 

See  Wilson  v.  Stevenson,  129  Ala.  630;  Smith  v.  P.  R.  Co.,  30  Ala.  650;  Fitzpatrick  v. 
D.  P.  Co.,  83  Ala.  604 ;   2  Sou.  727. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  the  debts  of 
the  corporation  only  on  the  unpaid  stock  owned  by  them  (sec.  3468).  The  cor- 
poration may,  by  the  adoption  of  a  proper  by-law,  place  a  hen  upon  the  shares 
of  its  stockholders  for  any  debt  or  liability  they  may  incur  to  the  company  (sec. 
3476,  Cons.,  Art.  XLV.  sec.  8). 

Lear.  Company,  119  Ala.  271;  24Sou.28;  Nicrosi  v.  Company,  115  Ala.  429;   22  Sou.  117. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  signed  by  the  president  and  secretary  or  treasurer.  The  par  value 
may  be  any  amount  (sec.  3469;   sec.  3446,  sub.  4). 

15.  Preferred  Stock.  —  Preferred  stock  is  expressly  authorized  under  the 
new  act  (sec.  3479).  If  provided  for  in  the  original  certificate  of  incorpora- 
tion, the  terms  on  which  it  is  issued  must  be  therein  stated  (sec.  3446,  sub.  4). 
In  such  cases  it  must  be  accompanied  by  the  assent  of  the  original  subscribers 
to  the  capital  stock  expressed  in  their  subscription  (sec.  3479).  If  subse- 
quent to  incorporation  it  is  desired  to  issue  preferred  stock,  this  may  be  done 
by  the  vote  of  the  holders  of  two-thirds  in  value  of  the  capital  stock  outstand- 
ing at  a  meeting  called  for  that  purpose.  The  proceedings  of  this  meeting 
must  be  certified  to  the  Secretary  of  State  and  filed  and  recorded  in  his  office. 
After  this  has  been  done,  preferred  stock,  not  to  exceed  two-thirds  of  the 
capital  stock  paid  in  in  cash  or  property,  may  be  issued.  Each  stockholder 
shall  be  first  entitled  to  the  privilege  of  taking  such  preferred  stock  in  pro- 
portion to  the  amount  of  common  stock  held  by  him,  or  a  less  amount 
should  he  desire,  before  the  preferred  stock  is  offered  for  sale  to  the  public 
(Id.  sec.  43 ;  Cons.,  Art.  XLV.  sec.  9). 

16.  Payment  of  Capital  Stock.  —  Under  the  Constitution  corpora- 
tions can  only  issue  stock  for  money,  labor  done,  or  money  or  property 
actually  received.  All  fictitious  increase  of  stock  is  void  (Cons.,  Art.  XIV. 
sec.  6). 

All  subscriptions  to  capital  stock  must  be  paid  in  cash,  except  that,  if  so 
provided  in  the  contract  of  subscription,  such  subscriptions  may  be  discharged 
by  the  rendition  of  stipulated  necessary  services,  or  the  performance  of  stipu- 
lated  necessary  labor,   or  the    transfer  of  property   at    the    reasonable    value 

215 


DIGEST    OF    INCORPORATION    ACTS.  —  ALABAMA. 

thereof.  In  such  cases  the  subscription  list  shall  state  the  names  of  such 
subscribers,  with  the  nature  of  the  services  or  labor  to  be  performed  and  a 
brief  description  of  the  property  and  when  it  is  to  be  transferred  to  the  com- 
pany (sec.    3467). 

Bibb  v.  Hall,  101  Ala.  79;  14  Sou.  98;  Haas  v.  Hall,  111  Ala.  442;  20  Sou.  78;  Paschall 
v.  Whitsett,  11  Ala.  472;    Spence  v.  Shapard,  57  Ala.  598;    Knox  v.  C.  L.  Co.,  86  Ala.  180; 

5  Sou.  578;    Fitzpatrick  v.  P.  Co.,  83  Ala.  604;    2  Sou.  727;    Williams  v.  Evans,  87  Ala.  725; 

6  Sou.  702;  Parsons  v.  Joseph,  92  Ala.  403;  8  Sou.  788;  Beitman  v.  Steiner,  98  Ala.  241; 
13  Sou.  87;  Perry  v.  Mill  Co.,  93  Ala.  364;  9  Sou.  217;  L.  L.  Co.  v.  Rees,  103  Ala.  622;  16 
Sou.  637;  Powers  v.  Dimmick,  115  Ala.  233;  22  Sou.  109;  Elyton  Co.  v.  Company,  92  Ala. 
407;  9  Sou.  129;  Nicrosi  v.  Drove,  102  Ala.  648;  15  Sou.  429. 

17.  Books.  —  It  is  contemplated  by  the  statute  that  the  books,  records, 
and  papers  of  the  corporation  shall  be  kept  at  the  principal  office  within  the 
State  unless  the  by-laws  otherwise  provide.  The  statute  gives  to  all  stock- 
holders the  right  of  access  to,  and  inspection  and  examination  of  such  books, 
records,  and  papers  at  reasonable  and  proper  times  (sec.  3477).  It  is  specially 
provided  that  a  stock  register  shall  be  kept  with  an  agent  in  the  State,  showing 
list  of  stockholders,  transfers,  and  hypothecations  (sec.  3473). 

18.  Office  and  Agent.  —  Every  corporation  must  have  an  office  within  the 
State,  and  an  agent  in  charge  thereof  upon  whom  process  may  be  served  (sec. 
3481,  sub.  7). 

19.  Reports.  —  No  annual  reports  are  required  (sec.  2361,  sub.  26). 

20.  Anti-Trust  Statute.  — ■  There  is  an  anti-trust  statute  in  force  within 
the  State  (Cons.  1902,  Art.  IV.  sees.  74,  103,  Code  of  1907,  sees.  7579  to  7582 
inclusive,  see  also  Id.  sees.  2487,  2488). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Non-user  for  a  period 
of  five  consecutive  years  is  ground  for  forfeiture  of  the  charter  upon  proper 
action  taken  by  the  State  (sec.  3515).    Also  non-payment  of  license  tax. 

State  v.  Bank,  2  Stew.  30;  Curry  v.  Woodward,  53  Ala.  371;  M.  &  O.  R.  R.  Co.  v.  State, 
29  Ala.  573;    I.  &  E.  Co.  v.  Locke,  50  Ala.  332;    State  v.  R.  R.  Co.,  108  Ala.  29;  18  Sou.  801. 

22.  Amendments.  —  If  through  misunderstanding  or  inadvertence  occurring 
at  the  time  of  incorporation,  the  corporation  has  failed  to  comply  with  any  of 
the  requirements  of  the  act,  the  president  or  other  executive  head  of  the  corpora- 
tion may  supply  such  omission  or  defect  by  filing  in  the  office  of  the  judge  of 
the  probate  court  in  the  county  in  which  the  corporation  was  organized,  a  state- 
ment in  writing,  under  oath,  setting  forth  the  omission  or  error  and  supplying 
or  correcting  the  same  (sec.  3461). 

In  regard  to  material  amendments  desired  after  incorporation  the  following 
may  be  said :  Under  section  3462  of  the  Code  of  Alabama  of  1907.  Every  cor- 
poration chartered  under  this  chapter  or  under  any  general  or  special  law  of 
this  State  may  change  the  nature  of  its  business,  the  par  value  of  the  shares  of 
its  stock,  change  the  location  of  its  principal  office  in  this  State,  renew  or  extend 
its  corporate  existence,  change  its  corporate  name,  and  make  such  other  amend- 
ment, alteration,  or  change  of  its  charter  as  may  be  desired  in  the  following 
manner:  the  board  of  directors  shall  pass  a  resolution  declaring  that  such  change 
or  alteration  or  extension  is  desirable  and  calling  a  meeting  of  the  stockholders 
to  take  action  thereon;  if  the  holders  of  the  larger  amount  in  value  of  each  class 
of  stockholders  having  voting  powers  shall  vote  in  favor  of  such  alteration, 
change,  amendment,  renewal  or  extension,  a  certificate  thereof  shall  be  signed 
by  the  president  and  secretary  under  the  corporate  seal,  acknowledged  or  proved 
as  in  the  case  of  deeds  of  real  estate,  and  such  certificate,  together  with  the  written 
assent,  signed  in  person  or  by  proxy,  of  the  stockholders  holding  a  majority  in 

216 


DIGEST    OF    IN'CORPORATION    ACTS.  —  ALABAMA. 

value  of  each  such  class,  shall  be  filed  in  the  office  of  the  judge  of  probate  of  the 
county  where  the  corporation  has  its  principal  place  of  business,  and  upon  the 
filing  of  the  same  the  certificate  of  incorporation  shall  be  deemed  to  be  so  re- 
newed or  extended;  provided  that  such  certificate  of  change,  alteration,  amend- 
ment, renewal,  or  extension  shall  contain  only  such  provisions  as  would  be 
lawful  and  proper  to  insert  in  an  original  certificate  of  incorporation,  made  at 
the  time  of  making  such  amendment. 

To  increase  or  decrease  the  number  of  directors  the  consent  of  the  persons 
holding  the  larger  amount  in  value  of  the  capital  stock  expressed  by  a  vote 
cast  at  a  regular  meeting  or  at  a  special  meeting  called  for  that  purpose,  is  neces- 
sary (sec.  3466).  The  capital  stock  or  bonded  indebtedness  may  be  increased 
by  the  consent  of  the  persons  holding  the  larger  amount  in  value  of  the  capital 
stock  obtained  in  favor  thereof,  at  a  regular  meeting  of  the  stockholders  or  a 
special  meeting  thereof  called  for  that  purpose  on  thirty  days'  notice,  the  ootice 
of  the  meeting  in  either  case  to  state  what  increase  is  proposed  to  be  made.  If 
at  such  meeting  the  consent  of  the  holders  of  the  larger  amount  in  value  of  the 
capital  stock  shall  be  given  to  a  specified  increase  of  the  capital  stock  or  bonded 
indebtedness,  a  report  thereof,  certified  by  the  president  or  secretary  of  the  cor, 
poration  under  the  corporate  seal,  must  be  filed  and  recorded  in  the  office  of  thq 
judge  of  probate  of  the  county  in  which  the  corporation  was  organized.  A  \ika 
proceeding  is  necessary  in  order  to  decrease  the  capital  stock,  special  provision 
being  made  as  to  the  manner  in  which  such  decrease  shall  be  effected.  (See 
sec.  3480.) 

23.  Renewal  of  Corporate  Existence.  —  The  term  of  existence  may  be  ex- 
tended at  pleasure  by  compliance  with  the  statute  in  such  case  made  and  pro- 
vided.    (See  sec.  3462;  sec.  3481,  sub.  14.) 

24.  Annual  Privilege  Tax.  —  When  paid  up  capital  is  under  $10,000,  $10; 
when  it  exceeds  $10,000  and  does  not  exceed  $25,000,  $15;  when  it  exceeds 
$25,000  and  does  not  exceed  $50,000,  $25;  when  it  exceeds  $50,000  and  does  not 
exceed  $100,000,  $50;  when  it  exceeds  $100,000  and  does  not  exceed  $200,000, 
$75;  when  it  exceeds  $200,000  and  does  not  exceed  $300,000,  $125;  when  it 
exceeds  $300,000  and  does  not  exceed  $400,000,  $170;  when  it  exceeds  $400,000 
and  does  not  exceed  $500,000,  $200;  when  it  exceeds  $500,000  and  does  not 
exceed  $1,000,000,  $300;  when  it  exceeds  $1,000,000,  $500.  The  tax  becomes 
due  January  1st  (sec.  2361,  sub.  26). 

At  the  time  application  is  made  for  the  issuance  of  the  annual  license  to  cor- 
porations required  by  law,  it  must  be  accompanied  by  the  affidavit  of  the  presi- 
dent or  other  chief  officer  of  the  corporation,  showing  the  amount  of  capital 
stock  of  such  corporation.  But  the  payment  of  this  tax  in  one  county  in  Ala- 
bama, as  evidenced  by  the  certificate  issued  by  the  judge  of  probate  of  that 
county,  shall  be  sufficient  (sec.  2361,  sub.  26). 

25.  Dissolution.  —  Dissolution  may  be  effected  by  an  agreement  of  all 

stockholders  signed  and  acknowledged,  filed  and  recorded  with  tin-  probate 

judge  of  the  county  of  organization,  and  published  in  a  newspaper  of  county 

of  principal  place  of  business  four  weeks ;   or  (if  such  agreement  cannot  be  bad) 

holders  of  two-thirds  in  value  of  stock  may  petition  Court  of  Chancery  or  other 

court  of  competent  jurisdiction  for  dissolution  (sees.  3510-3514). 

State  v  Webb,  97  Ala.  Ill;  12  Sou.  377;  MoKleroy  ".  Q.  I-  I  <'<>..  126  Ala.  1st;  28  Sou. 
660. 

26.  Foreign  Corporations.  —  Under  Art.  XII.  sec.  232  of  the  Constitu- 
tion of  Alabama,  1901,  and  under  the  provisions  of  sec.  3642  of  the  Code  of 

217 


DIGEST    OF    INCORPORATION   ACTS. ALABAMA. 

Alabama,  1907,  no  foreign  corporation  can  do  business  within  the  State  until 
it  has  filed  with  the  Secretary  of  State  a  written  statement,  designating  at 
least  one  known  place  of  business  within  the  State,  and  naming  an  agent  within 
the  State,  located  at  its  own  place  of  business,  upon  whom  as  such  agent  service 
of  process  may  be  made  and  all  legal  notices  served  for  all  the  purposes  con- 
templated by  the  laws  of  the  State  of  Alabama.  There  must  also  be  filed  with 
the  foregoing  a  certified  copy  of  its  articles  of  incorporation.  The  statement 
to  be  filed  must  be  in  writing  under  the  seal  of  the  corporation  and  signed 
officially  by  the  president  and  secretary  thereof.  The  transaction  of  business 
by  foreign  corporations  without  having  first  filed  the  written  statement  here- 
inbefore referred  to,  renders  it  liable  to  forfeit  and  pay  to  the  State  the  sum 
of  $1,000  (sees.  3642-3646). 

The  legislature  is  directed  by  the  Constitution  to  provide  for  the  payment 
of  a  license  tax  by  foreign  corporations  to  be  based  on  the  actual  amount  of 
capital  employed  by  them  within  the  State. 

Foreign  corporations  are  required  before  engaging  in  the  transaction  of  busi- 
ness within  the  State  to  pay  to  the  treasurer  for  the  use  of  the  State  the  follow- 
ing fees.  Each  foreign  corporation  whose  actual  amount  of  capital  employed 
within  this  State  is  $100  or  less,  shall  pay  a  charter  fee  of  twenty-five  per  cent 
of  the  actual  amount  of  capital  employed  or  to  be  employed  in  the  State  by  it. 
Each  foreign  corporation  whose  actual  amount  of  capital  employed  in  this  State 
exceeds  $100  and  does  not  exceed  $1,000,  shall  pay  a  charter  fee  of  twenty-five 
per  cent  upon  the  first  $100  of  the  actual  amount  of  capital  employed  in  this 
State,  by  it,  and  five  per  cent  on  all  such  remaining  actual  amount  of  capital 
employed  in  this  State  by  it  over  $100  and  up  to  and  not  exceeding  $1,000. 
Each  foreign  corporation  whose  actual  amount  of  capital  employed  in  this 
State  exceeds  $1,000  shall  pay  a  charter  fee  of  twenty-five  per  cent  upon 
the  first  $100  of  actual  amount  of  capital  employed  in  this  State  by  it,  and 
five  per  cent  upon  all  such  capital  employed  in  this  State  by  it  over  $100  and 
up  to  $1,000,  and  one-tenth  of  one  per  cent  on  such  actual  amount  of  capital 
in  excess  of  $1,000.  All  corporations  or  mutual  companies  which  have  no  capi- 
tal stock  shall  pay  a  fee  of  $25  (sec.  3647  as  amended  by  Laws  of  Special 
Session  of  1907,  p.  200).  This  tax  is  payable  annually  each  year  while  the 
corporation  is  transacting  business  within  the  State. 

Under  sec.  3648  of  the  Code  of  1907,  such  foreign  corporation  shall  at  the 
time  of  paying  said  fee  into  the  treasury  file  in  the  office  of  the  State  Auditor  an 
instrument  in  writing  under  the  seal  of  the  corporation  and  signed  officially  by 
the  president  or  other  chief  officer  and  the  secretary  of  such  corporation,  show- 
ing the  name  of  the  corporation,  and  the  State  or  country  under  whose  laws  it 
was  incorporated,  the  amount  of  the  total  authorized  capital  of  such  corpora- 
tion, its  principal  place  of  business,  the  name  of  the  authorized  agent  of  said 
corporation  in  this  State,  and  the  post-office  address  of  such  authorized  agent 
of  such  corporation  in  this  State,  and  the  location  of  the  principal  place  of 
business  of  such  corporation  in  this  State ;  and  also  a  statement  showing  the 
actual  amount  of  capital  employed  in  this  State  by  such  corporation,  if  such 
corporation  is  at  the  date  of  the  filing  of  such  statement  engaged  in  business 
in  this  State,  and  if  such  corporation  is  not  at  the  date  of  the  filing  of  such 
statement  engaged  in  business  in  this  State,  such  statement  shall  state  the 
actual  amount  of  capital  to  be  employed  by  such  corporation  in  this  State, 
which  statement  shall  be  sworn  to  by  the  president  or  other  executive  officer 
and  the  secretary  of  said  corporation  before  some  officer  authorized  under  the 

218 


DIGEST    OF    INCORPORATION    ACTS.  —  ALABAMA. 

laws  of  this  State  to  administer  oaths  or  take  acknowledgment  of  conveyances. 
If  the  auditor  shall  have  any  reason  to  believe  that  any  statement  made  in 
such  instrument  so  filed  in  his  office  is  untrue,  or  that  any  fact  or  facts  stated 
in  such  instrument  is  incorrectly  stated,  he  shall  have  power  to  demand  of  such 
corporation,  its  officers  or  agents,  an  inspection  of  the  books,  records,  and  pa  | 
of  the  said  corporation  for  the  purpose  of  ascertaining  the  truth  or  falsity  of  any 
such  statement,  and  any  corporation  which  shall  refuse  to  permit  the  auditor. 
or  such  person  as  may  be  designated  by  him,  to  inspect  the  books,  records,  and 
papers  of  such  corporation  when  such  examination  is  demanded  by  the  auditor, 
shall  not  be  permitted  to  transact  any  business  or  do  any  act  in  its  corporate 
capacity  in  this  State  until  such  inspection  is  made.  If  the  auditor,  upon  making 
such  inspection  of  the  books,  records,  and  papers  of  such  corporation  shall  find 
that  the  amount  of  capital  to  be  employed  or  which  is  employed  by  the  said 
corporation  in  this  State  is  in  excess  of  the  amount  stated  in  such  statement 
filed  by  such  corporation,  he  shall  make  demand  upon  such  corporation,  its 
officers  or  agents,  for  the  payment  of  the  difference  in  amount  between  the 
charter  fee  for  which  such  corporation  would  be  liable  upon  the  amount  of 
capital  set  forth  in  said  statement  and  the  amount  of  the  charter  fee  for  which 
such  corporation  would  be  liable  upon  the  amount  of  capital  set  forth  in  said 
statement,  and  the  amount  of  the  charter  fee  which  such  corporation  would  be 
liable  upon  the  amount  of  said  capital  as  ascertained  by  the  auditor  from  his 
inspection  of  the  books,  records,  and  papers  of  such  corporation,  and  any  such 
corporation  which  shall  fail  or  refuse  for  the  space  of  sixty  days  after  the  date 
that  such  demand  is  made  by  the  auditor  to  pay  said  amount  found  by  the  audi- 
tor to  be  due  it  in  excess  of  the  amount  shown  to  be  due  by  it  in  such  state- 
ment, shall  not  be  permitted  to  engage  in  business  or  do  any  act  in  its  corporate 
capacity  in  this  State  at  any  time  within  five  years  from  the  date  of  such 
demand  (sec.  36-48). 

No  foreign  corporation  required  to  pay  a  tax  under  this  act  shall  do 
any  business  in  the  State  of  Alabama  not  constituting  interstate  commerce,  or 
maintain  or  defend  any  action  in  any  of  the  courts  of  this  State  upon  a  con- 
tract made  in  this  State  other  than  contract  based  upon  interstate  com- 
merce unless  such  corporation  shall  have  paid  such  tax  within  sixty  days 
after  the  same  became  due.  Provided  that  this  act  shall  not  apply  to 
foreign  corporations  engaged  in  the  business  of  lending  money  in  Alabama 
(sec.  2396). 

All  foreign  corporations  are  required  to  procure  annually  from  the  Secretary 
of  State  a  license  to  transact  business  within  the  State.  This  license  must  be 
procured  prior  to  January  1st  of  each  year,  and  for  issuing  the  same  the  Sec- 
retary of  State  is  entitled  to  charge  and  receive  $10  (sec.  3652).  In  addition 
to  the  foregoing  enumerated  license  taxes  each  foreign  corporation  must  pay 
annually  to  the  judge  of  probate  of  the  county  where  it  has  a  resident  agent 
a  franchise  tax,  for  the  use  of  the  State,  equal  in  amount  and  assessed  in  the 
same  mariner  as  the  charter  fee  referred  to  above.  They  must  also  file  with 
the  judge  of  probate  the  same  detailed  information  required  to  be  filed  by 
foreign  corporations  with  the  State  Auditor  as  enumerated  above.  The  act 
further  provides  that  in  addition  to  the  amount  of  franchise  taxes  required 
to  be  paid  by  each  foreign  corporation  to  the  State,  as  here  stated,  all  foreigrj 
corporations  shall  in  addition  thereto  pay  to  the  county,  for  the  use  of  the 
county,  an  aniounl  equal  to  one-half  of  the  amount  paid  by  it  to  the  State 
(sec.  2399).  aal  license  tax  must  be  paid   prior   to  January    1st    of 

219 


DIGEST   OF    INCORPORATION    ACTS.  —  ALABAMA. 

each  year  (sees.  2391-2392.     See  also  as  to  reissuing  of  permit  after  cancella- 
tion of  license,  sec.  3657). 

Hall  v.  Engine  Co.,  91  Ala.  363;  8  Sou.  348;  Morris  v.  Hall,  41  Ala.  510;  Lucas  v.  Bank, 
2  Stew.  147;  Craddock  v.  Mortgage  Co.,  88  Ala.  281;  7  Sou.  196;  Cook  v.  Brick  Co.,  98  Ala. 
409;  12  Sou.  918;  State  v.  Bank,  108  Ala  3;  18  Sou.  533;  George  v.  N.  E.  M.  Sec.  Co.,  109 
Ala.  548;  20  Sou.  331;  Electric  L.  Co.  v.  Rust,  117  Ala.  680;  23  Sou.  751;  Farrier  v.  N.  E. 
M.  S.  Co.,  88  Ala.  275;  7  Sou.  200;  Collier  v.  Davis,  94  Ala.  456;  10  Sou.  86;  Christian  v. 
A.  F.  L.  &  M.  Co.,  89  Ala.  198;  7  Sou.  427;  City  of  Greenville  v.  G.  W.  Co.,  125  Ala.  625; 
27  Sou.  764;  Sullivan  v.  Vernon,  121  Ala.  393;  25  Sou.  600;  Beard  v.  U.  &  A.  P.  Co.,  71  Ala. 
60;  Falls  v.  U.  S.  S.  L.  &  B.  Co.,  97  Ala.  417;  13  Sou.  25;  McLeod  v.  Am.  F.  L.  M.  Co.,  100 
Ala.  496;  14  Sou.  409;  Chattanooga,  etc.  Ass'n  v.  Denson  et  al.,  189  U.  S.  408;  D.  M.  &  T. 
I.  Co.  v.  Nixon,  95  Ala.  318;  10  Sou.  311. 


220 


DIGEST    OF    INCORPORATION    ACTS.  —  ALASKA. 


ALASKA. 

(The  references  are  to  the  Act  of  Congress  [Public  Act,  135]  approved  March  2.  1903, 
■unless  otherwise  stated,  Vol.  32,  U.  S.  Revised  Statutes,  chap.  978,  sec.  5,  pp.  947-952.) 

1.  Statute  under  which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  Alaska  is  found  in  Acts  of  Congress  No.  135, 
approved  March  2,  1903.  Under  this  act  corporations  may  organize  for  the 
purpose  of  transacting  the  following  lines  of  business  in  Alaska  only,  to  wit : 
railway,  street  railway,  wagon  road,  canal,  flume,  telegraph,  telephone,  mining, 
fishery,  smelting,  electric  power,  lighting,  dock,  wharfage,  elevator,  warehouse, 
hotel,  trade,  transportation,  agricultural,  lumbering,  and  manufacturing 
companies. 

2.  Incorporators.  —  Three  or  more  adult  persons,  all  of  whom  must  be 
bona  fide  residents  of  the  District  of  Alaska  (sec.  1). 

3.  Contents  of  the  Articles  of  Incorporation.  —  Articles  must  contain: 

a.  Corporate  Name.  —  Similarity  of  names  not  forbidden  (sec.  2). 

b.  Purposes.  —  Nature  and  character  of  the  business.  May  be  incorporated 
for  one  or  more  of  the  purposes  above  enumerated  (Id.). 

c.  Domiciliary  Office.  —  Principal  place  for  transacting  business. 

d.  Duration.  —  Time  of  commencement  and  period  of  continuance  not  to 
exceed  fifty  years  (Id.). 

e.  Capital  Stock.  —  Amount  of  capital  stock  and  manner  in  which  the  same 
is  to  be  paid  in,  and  the  number  and  par  value  of  the  shares  (Id.  sec.  10). 

/.  Indebtedness.  —  Highest  amount  of  indebtedness  or  liability  that  may 
be  incurred  (Id.). 

g.    Names  of  Incorporators.  — Names  and  residences  of  the  incorporators  (Id.). 

h.  Directors.  —  Number  and  names  of  first  board  of  directors,  and  also 
statement  as  to  what  officers  shall  have  charge  of  the  management  of  the  cor- 
porate affairs  and  when  they  shall  be  elected  and  their  terms  of  office  (Id.).  If 
desired,  provision  may  be  inserted  for  manner  of  calling  first  meeting  of  directors 
(sec.  9). 

4.  Statutory  Powers.  —  The  statute  merely  enumerates  the  common  law 
powers  of  corporations.  The  power  to  remove  officers  and  directors  is  ex- 
pressly granted,  as  well  as  the  right  of  stockholders  to  vote  by  proxy.  Stock 
may  be  forfeited  for  non-payment  of  assessments  (sees.  4-6,  10). 

5.  Procuring  the  Charter.  —  Incorporators  must  subscribe  and  acknowl- 
edge written  articles  of  incorporation  in  triplicate.  One  of  these  must  be  filed 
and  recorded  in  the  office  of  the  Secretary  of  the  District  of  Alaska  and  an- 
other in  the  office  of  the  clerk  of  the  District  Court  of  the  recording  division  where 
the  principal  place  of  business  of  the  corporation  is  to  be  located ;  the  third  to 
be  retained  in  the  possession  of  the  corporation.  Corporate  existence  com- 
mences as  soon  as  the  foregoing  steps  have  been  taken  (sees.  2-4). 

6.  Corporate  Indebtedness. — The  corporate  indebtedness  cannot  ex- 
ceed the  capital  stock  (sec.  17). 

7.  Organization  Tax.  —  There  is  no  organization  tax  in  the  District  of 
Alaska. 

8.  Filing  and  Recording  Fees. — The  filing  and  recording  fees  in  the 
office  of  the  Secretary  of  the  District  of  Alaska  have  not  yet  been  fixed  by  the 

221 


DIGEST    OF    INCORPORATION    ACTS.  —  ALASKA. 

Attorney-General  of  the  United  States.  On  this  subject  the  Attorney-General 
of  the  United  States  writes  as  follows : 

"  The  Attorney-General  has  not  prescribed  any  schedule  of  fees  covering  the 
filing  of  papers  in  the  office  of  the  Secretary  of  the  District  of  Alaska,  for  the 
reason  that  it  has  been  and  is  considered  very  doubtful  whether  he  is  author- 
ized by  Section  30,  Chapter  1,  Title  I.  of  the  Act  of  June  6,  1900,  to  do  so. 

"Under  Section  10  of  the  above-named  chapter  and  title,  the  Surveyor 
General,  ex  officio  Secretary  of  the  District,  gets  a  salary  of  four  thousand 
dollars  per  annum  as  full  compensation.  It  seems  clear  therefore  that  he  (the 
Secretary)  would  not  be  authorized  to  retain  for  his  own  use  any  fees  prescribed 
by  the  Attorney-General  for  services  rendered  in  filing  papers  in  the  office  of 
the  Secretary.  In  view  of  the  fact  that  Congress  provided  a  salaried  officer 
to  perform  the  services  rendered  by  such  Secretary,  and  neither  prescribed 
fees  therefor  nor  provided  how  the  Secretary  should  account  for  fees  if  pre- 
scribed by  the  Attorney-General,  it  seems  that  the  Attorney-General  is  not 
authorized  to  prescribe  fees  for  such  services." 

With  respect  to  the  fees  of  the  clerks  of  the  courts  in  the  District  of  Alaska 
it  should  be  noted  that  sec.  828  of  the  Revised  Statutes  of  the  United  States 
has  been  made  applicable  to  the  services  rendered  by  clerks  of  the  Federal 
courts.  (See  also  paragraph  535  of  Instructions  to  United  States  judges, 
marshals,  attorneys,  clerks,  and  commissioners  for  the  District  of  Alaska,  effec- 
tive from  and  after  August  1,  1902.)  For  recording  articles  in  the  office  of  the 
clerk  of  the  District  Court  of  the  recording  division  where  the  principal  place 
of  business  of  the  corporation  is  to  be  located,  a  fee  of  15  cents  per  folio 
must  be  paid  for  such  service.  (See  Public  Act  No.  150,  Title  I.  sec.  30,  ap- 
proved January  6,  1900.) 

9.  Commencing  Business.  —  Business  may  be  commenced  as  soon  as  the 
articles  are  filed  in  the  proper  offices  and  the  organization  effected  (sec.  4). 
Within  thirty  days  after  any  change  of  officers  a  certificate  thereof  is  required 
to  be  filed  in  the  office  of  the  clerk  of  the  District  Court  (sec.  20).  Directors 
must  also  take  oath  of  office  (sec.  6). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
in  the  District  of  Alaska.  Corporations  must  organize  within  one  month  after 
fifing  articles  of  incorporation  by  the  adoption  of  by-laws  (sees.  9-16).  Unless 
otherwise  provided  in  articles  of  incorporation,  the  first  meeting  of  directors 
must  be  called  by  one  or  more  of  the  persons  named  as  directors  in  the  cer- 
tificate, by  notice  served  personally  on  the  resident  directors  and  published  at 
least  twenty  days  in  a  newspaper  at  or  nearest  the  principal  place  of  business 
of  the  corporation  in  Alaska  (sec.  9). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  within  the  District  of  Alaska.  The  requirement  that  a  majority 
of  the  directors  must  be  residents  of  the  district  would  ordinarily  necessitate 
holding  all  meetings  of  the  board  of  directors  there  (sec.  6). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  not  less  than  three  directors,  who  shall  be  stockholders,  and  a 
majority  shall  be  residents  of  the  District  of  Alaska.  They  are  each  required 
to  subscribe  to  an  oath  of  office  (sec.  6). 

b.  Liabilities.  —  Directors  are  liable  for  illegal  payment  of  dividends  and  for 
the  unlawful  withdrawal  of  any  part  of  the  capital  stock  of  the  corporation, 
unless  absent  from  meeting  or  their  dissent  is  entered  at  length  upon  the  minutes 
(sec.  13). 

222 


DIGEST    OF    INCORPORATION    ACTS.  —  ALASKA. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  only  for  the 
amount  that  remains  unpaid  upon  the  par  value  of  their  stock  (sec.  14). 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  stock  certifi- 
cate signed  by  such  officers  as  the  by-laws  may  prescribe.  The  par  value  of 
stock  may  be  any  amount. 

15.  Preferred  Stock. — There  is  no  provision  for  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  in  considera- 
tion of  money,  labor,  or  property,  estimated  at  its  true  money  value  (sec. 
14). 

17.  Books.  —  Books  of  account,  stock  books,  and  record  books  must  be 
kept  at  its  principal  office  in  Alaska.  These  are  open  to  the  inspection  of  stock- 
holders (sec.  16). 

18.  Office  and  Agent.  —  The  office  and  the  principal  managing  officer  or 
superintendent  must  respectively  be  maintained  and  reside  in  the  District  of 
Alaska  (sees.  2,  16). 

19.  Reports.  —  The  president,  secretary,  and  treasurer  must  annually 
make  out  and  publish  weekly  for  three  weeks  a  statement  showing,  first,  number 
of  shares  of  stock  outstanding ;  second,  amount  paid  in  on  each  share ;  third, 
actual  paid  up  capital  of  the  corporation;  fourth,  actual  cash  value  of  the 
property  and  its  location ;  fifth,  statement  of  debts  and  liability  and  a  descrip- 
tion of  the  same;  sixth,  salaries  paid  officers,  manager,  and  superintendent; 
seventh,  increase  or  decrease,  if  any,  in  the  stock,  the  capital  and  the  liability 
of  the  corporation  during  the  preceding  year.  On  or  before  September  1st  of 
each  year,  or  within  thirty  days  after  any  change  in  the  officers  of  a  corpora- 
tion, there  must  be  filed  in  the  office  of  the  clerk  of  the  district  court  of  the 
recording  division  where  the  principal  office  of  the  corporation  is  located,  a  fist 
containing  the  names  of  the  principal  officers,  including  the  president,  cashier, 
secretary,  and  managing  agents  (sees.  20,  23). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  specially  appli- 
cable to  the  District  of  Alaska.  (See  Anti-Trust  Act,  U.  S.  Statutes  of  1890, 
chap.  647.) 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  An  action  may 
be  maintained  in  the  name  of  the  United  States,  whenever  the  governor  shall  so 
direct,  against  a  corporation,  either  public  or  private,  for  the  purpose  of  avoid- 
ing the  act  of  incorporation,  or  the  act  renewing  or  modifying  its  corporate 
existence,  on  the  ground  that  such  act  or  either  of  them  was  procured  upon 
some  fraudulent  suggestion  or  concealment  of  a  material  fact  by  the  persons 
incorporated,  or  some  of  them,  or  with  their  knowledge  and  consent ;  or  for  an- 
nulling the  existence  of  such  corporation,  when  the  same  has  been  formed 
under  any  general  law  operating  in  this  district  therefor,  on  the  ground  that 
such  incorporation,  or  any  renewal  or  modification  thereof,  was  procured  in  like 
manner  (sec.  338). 

An  action  may  be  maintained  in  the  name  of  the  United  States  against  a 
corporation,  other  than  a  public  one  on  leave  granted  by  the  court  or  judge 
thereof  where  the  action  is  triable,  for  the  purpose  of  avoiding  the  charter  or 
annulling  the  existence  of  such  corporation  whenever  it  shall  — 

First.  Offend  against  any  of  the  provisions  of  the  acts,  or  cither  of  them 
creating,  renewing,  or  modifying  such  corporation  or  the  provisions  of  any 
general  law  under  which  it  became  incorporated ;  or, 

Second.  Violate  the  provisions  of  any  law  by  which  such  corporation  for- 
feits its  charter  by  abuse  of  its  powers;  or, 

223 


DIGEST    OF   INCORPORATION    ACTS.  —  ALASKA. 

Third.  Whenever  it  has  forfeited  its  privileges  or  franchises  by  failure  to 
exercise  for  a  period  of  one  year  its  powers;  or, 

Fourth.  Whenever  it  has  done  or  omitted  any  act  which  amounts  to  a 
surrender  of  its  corporate  rights,  privileges,  and  franchises ;  or, 

Fifth.  Whenever  it  exercises  a  franchise  or  privilege  not  conferred  upon 
it  by  law. 

Sixth.  Whenever  any  such  corporation  or  association  of  persons  shall 
combine  for  the  purpose  of  forming  a  trust  or  agreement  to  prevent  competition 
or  to  control  the  price  production  or  sale  of  any  goods,  products,  or  merchandise 
(sec.  339). 

22.  Amendments.  —  To  increase  or  decrease  the  capital  stock  a  meeting 
of  stockholders  must  be  called  by  notice  signed  by  at  least  a  majority  of  the 
directors,  and  published  weekly  for  at  least  eight  consecutive  weeks  in  some 
established  newspaper  published  at  or  near  the  principal  place  of  business  of 
the  corporation  in  the  District  of  Alaska,  which  notice  shall  specify  the  object 
of  the  meeting,  the  time  and  place  where  it  is  to  be  held,  and  the  amount  to 
which  it  is  proposed  to  raise  or  diminish  the  capital  stock.  The  proposed  in- 
crease or  decrease  in  stock  must  be  approved  by  a  vote  of  two-thirds  of  all  the 
shares  of  stock.  Thereupon  a  certificate  of  proceedings,  showing  compliance 
with  the  foregoing  provisions,  the  amount  of  the  capital  stock  actually  paid 
in,  the  whole  amount  of  debts  and  liabilities  of  the  company,  and  the  amount 
to  which  the  capital  stock  is  to  be  decreased  and  diminished  shall  be  made  out, 
signed,  and  verified  by  the  affidavit  of  the  presiding  officer  and  secretary  of 
the  meeting,  and  certified  to  by  a  majority  of  the  directors,  and  filed  and  re- 
corded in  the  same  manner  as  original  articles  of  incorporation  (sees.  17-19  ; 
sec.  2,  sub.  7  ;  sec.  7).  In  the  same  manner  and  upon  such  additional  notice  as 
may  be  provided  in  the  articles  of  incorporation  or  by-laws,  any  of  the  general 
provisions  of  the  articles  of  incorporation  may  be  amended,  and  upon  a  like 
vote,  unless  a  different  vote  be  required  in  the  articles  of  incorporation.  There- 
upon such  amended  articles  must  be  filed  and  recorded  in  the  same  manner  as 
provided  for  original  articles  (sees.  17-19 ;   sec.  2,  sub.  7 ;   sec.  7). 

23.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for  the 
extension  of  corporate  existence. 

24.  Dissolution. — The  corporation  may  be  dissolved  by  the  voluntary 
action  of  the  stockholders  taken  as  provided  for  in  the  act  (sees.  21-22). 

25.  Annual  License  Fee.  —  There  is  no  annual  license  fee  in  the  District 
of  Alaska. 

26.  Foreign  Corporations.  —  Under  Act  of  June  6,  1900,  chap.  23  of  Title 
III.'  U.  S.  Statutes  at  Large,  1900,  pp.  321-528,  a  foreign  corporation,  whether 
created  under  the  laws  of  the  United  States  or  those  of  any  State  or  Territory 
of  the  United  States,  is  required,  before  doing  business  within  the  District 
of  Alaska,  to  file  with  the  secretary  of  the  district  and  the  clerk  of  the  District 
Court  for  the  division  within  which  the  business  is  to  be  carried  on,  an  authen- 
ticated copy  of  its  charter  or  articles  of  incorporation,  and  a  statement  verified 
by  oath  of  the  president  and  secretary  of  the  corporation,  and  attested  by  a 
majority  of  the  directors,  showing :  name  and  location  of  principal  place  of 
business  without,  and  also  (if  it  have  one)  within  the  district ;  amount  of  capital 
stock;  amount  thereof -paid  in  in  money,  and  amount  paid  in  any  other  way, 
and  manner  thereof;  amount  of  assets  and  of  what  they  consist,  and  actual 
cash  value  thereof ;  liabilities,  and  if  any  of  its  indebtedness  is  secured,  how  and 
upon  what  property.     It  must  also  file  with  the  foregoing  papers  a  certificate 

224 


DIGEST    OF    INCORPORATION    ACTS.  —  ALASKA. 

under  seal  of  the  president,  vice-president,  or  other  acting  head  of  the  corpora- 
tion, and  the  secretary,  if  there  be  one,  certifying  that  such  corporation  1ms 
consented  to  be  sued  in  the  courts  of  the  district  upon  all  causes  of  action  arising 
against  it  in  the  district,  and  that  process  may  be  served  upon  a  designated 
agent  residing  in  the  district ;  and  must  file  therewith  written  consent  of  such 
agent.  Such  corporation  must  also  annually,  within  thirty  days  from  July  1, 
report  in  substantially  the  same  form  required  in  the  foregoing  statement  and 
containing  similar  information  (Civil  Code,  sees.  225,  226,  228,  229,  231). 

Ames  v.  Kruzner,  1  Alaska,  598;   Miocene  Ditch  Co.  v.  Lyng,  2  Alaska,  265;    First  Nat. 
Bank  of  Seattle,  v.  Fish,  2  Alaska,  344. 


15  225 


DIGEST    OF    INCORPORATION    ACTS.  —  ARIZONA. 


ARIZONA. 

(The  references  cited  below  are  to  the  Revised  Statutes  of  Arizona,  1901,  unless  otherwise 
stated.) 

1.  Statute  under  which  Business  Corporations  may  incorporate. — 

The  General  Corporation  Act  in  force  in  Arizona  went  into  effect  September  1, 
1901.  It  is  found  in  the  Revised  Statutes  of  1901,  sees.  761-783  and  sees.  909- 
925  and  amendments  thereto.  It  is  entitled  "Title  XIII."  ;  chap.  2  thereof 
refers  to  corporations.  In  1903  an  act  was  passed  amending  sees.  766-770  of 
the  act  above  referred  to.  Under  it  parties  may  incorporate  for  any  lawful 
purpose. 

2.  Incorporators  (R.  S.,  sec.  764).  —  Any  number  of  persons  may  be 
incorporators;  there  are  no  residential  requirements. 

3.  Contents  of  Articles  of  Incorporation.  —  The  articles  of  incorpora- 
tion must  state  the  names  of  the  corporators,  name  of  corporation,  and  the 
principal  place  of  business  of  the  corporation  within  the  Territory.  Similarity 
of  names  is  not  expressly  forbidden.  The  business  of  the  company  must  be 
indicated  by  its  corporate  name  (Laws  of  1912,  chap.      ). 

b.  General  Nature  of  the  Business  proposed  to  be  transacted.  —  The  Terri- 
torial Auditor  allows  as  many  purposes  as  may  be  desired  to  be  inserted  in  the 
articles.  Special  provisions  are  made  for  railway,  insurance,  savings  and  loan, 
and  eleemosynary  corporations. 

B.  B.  Co.  v.  A.  & C,  Ariz.,  35  Pac.  983. 

c.  Capital  Stock.  —  The  amount  of  the  capital  stock  authorized,  and  the 
time  when,  and  conditions  upon  which,  it  is  to  be  paid  in.  Capital  stock  under 
this  section  is  without  limit  as  to  amount.  The  par  value  of  the  shares  may  be 
any  amount. 

d.  Corporate  Existence.  —  The  time  of  commencement  and  termination  of 
the  corporate  existence  of  the  corporation.  This  period  is  limited  by  the  stat- 
ute to  twenty-five  years  (sec.  771).  Corporate  existence  may  be  renewed  for 
another  period  of  twenty-five  years  upon  a  vote  of  three-fourths  of  the  stock- 
holders given  at  a  meeting  duly  held  for  that  purpose  (sec.  771). 

e.  Officers  and  Directors.  —  The  names  of  the  officers  or  the  persons  by 
whom  the  affairs  of  the  corporation  are  to  be  conducted,  and  the  times  at  which 
they  are  to  be  elected.  Reference  should  be  made  in  the  articles  to  a  board  of 
directors  of  a  designated  number,  to  be  elected  annually  by  the  stockholders. 
So  far  as  the  statute  is  concerned,  one  would  scarcely  know  that  the  corpora- 
tions organized  under  the  General  Act  were  supposed  to  have  a  board  of  direc- 
tors (Laws  of  1903,  chap.  88). 

/.  Corporate  Liability.  —  The  highest  amount  of  indebtedness  or  liability  to 
which  a  corporation  can  at  any  time  subject  itself.  This  liability  must  not  in 
any  case  exceed  two-thirds  of  the  capital  stock  (sec.  767). 

g.  Annual  Meeting.  —  This  is  inserted  by  inference  from  sec.  5  of  the 
Amendment  of  1903,  which  requires  a  statement  of  time  at  which  the  officers  in 
charge  of  the  affairs  of  the  corporation  are  elected. 

h.   Stockholders'  Liability.  —  Unless  the  private  property  of  the  stockholders 
is  expressly  exempt  in  the  articles  of  incorporation  from  liability  for  corporate 
debts,  stockholders  are  liable  for  the  debts  of  the  corporation  in  the  proportion 
which  their  stock  bears  to  the  entire  capital  stock. 
226 


DIGEST    OF    INCORPORATION    ACTS.  —  ARIZONA. 

i.  Corporate  Rides  and  Regulations.  — While  the  statute  does  not  authorize 
the  insertion  in  the  articles  of  any  corporate  rules  and  regulations,  the  Terri- 
torial Auditor  permits  such  rules  and  regulations  to  be  inserted  in  the  articles 
filed  in  his  office.     (See  Laws  of  1903,  Act  88.) 

4.  Statutory  Powers. — The  statute  (sec.  705)  enumerates  the  common 
law  powers  of  corporations.  A  sinking  fund  may  be  established  for  the  payment 
of  debts  (sec.  777).  No  mining  or  manufacturing  corporation  can  have  the 
power  to  operate  or  construct  any  railway,  tramway,  turnpike,  or  public  high- 
way, except  such  as  lead  from  their  principal  work  to  adjacent  streams,  rail- 
ways, or  highways  (sec.  781).  Specific  power  is  given  to  forfeit  stock  for 
non-payment  of  subscriptions  (Laws  of  1907,  chap.  38).  As  to  powers  of  rail- 
road corporations  see  Laws  of  1909,  chap.  83. 

Keyser  v.  Shuts,  29  Pac.  386. 

5.  Procuring  the  Charter  (sees.  767-769).  —  The  articles  must  be  signed 
and  acknowledged  before  some  officer  authorized  to  take  acknowledgments. 
Under  the  new  corporation  act  which  went  into  effect  in  the  State  of  Arizona 
in  1912,  the  original  articles  must  be  filed  with  the  Corporation  Commission, 
a  body  having  a  membership  of  three.  A  certified  copy  of  the  original  articles 
must  then  be  filed  in  the  office  of  the  county  recorder  of  the  county  where  the 
principal  place  of  business  of  said  corporation  within  the  State  is  located.  When 
this  has  been  done,  the  Corporation  Commission  issues  a  certificate  of  incor- 
poration. The  articles  must  then  be  published  at  least  six  times  in  some 
newspaper  published  in  the  county  in  which  the  corporation's  principal  place 
of  business  is  located  or  works  established,  and  an  affidavit  of  publication 
thereof  must  be  filed  in  the  office  of  the  County  Recorder,  for  which  no  fee  is 
charged.  The  act  provides  that  there  shall  be  no  collateral  inquiry  into  the 
legality  of  the  corporate  existence  (sees.  770,  780;  Laws  of  1903,  Act  88). 

6.  Corporate  Indebtedness.  —  Must  not  exceed  two-thirds  of  capital 
stock  (sec.  767;  Laws  of  1903,  chap.  88). 

7.  Organization  Tax.  —  There  is  no  organization  tax  imposed. 

8.  Filing  and  Recording  Fees.  —  For  filing  articles  of  incorporation  with 
the  Corporation  Commission,  a  fee  of  $10  is  charged.  For  fifing  appointment 
of  agent,  So;  for  issuing  certificate  of  incorporation,  $10;  fee  for  issuing  certi- 
fied copy  of  articles  is  twenty  cents  per  folio,  and  $1  for  certificate  and  seal. 
For  filing  annual  report,  $5;  for  filing  and  recording  articles  in  local  county 
recorder's  office,  twenty  cents  per  folio  of  one  hundred  words. 

9.  Commencing  Business  (sec.  769).  —  Before  commencing  business  the 
corporation  must  appoint  a  bona  fide  resident  of  the  Territory,  who  is  a  resident 
of  three  years'  standing,  as  its  agent  upon  whom  process  may  be  served  against 
the  corporation.  The  certificate  of  such  appointment  duly  certified  to  by  the 
proper  officers  of  the  corporation  must  be  filed  in  the  office  of  the  Territorial 
Auditor  (sec.  783,  Laws  of  1903,  chap.  82).  The  corporation  may  commence 
business  as  soon  as  the  articles  of  incorporation  are  filed  for  record  in  the  office 
of  the  county  recorder,  and  a  certified  copy  thereof  with  the  Territorial  Auditor. 
The  publication  of  the  articles  must  be  made  and  an  affidavit  thereof  filed  in 
the  office  of  the  Territorial  Auditor  within  three  months  from  date  of  filing  same 
with  county  recorder  (sec.  769).  No  specified  amount  of  capital  stock  need  be 
subscribed  for  or  paid  in  before  commencing  business.  Business  must  commence 
within  five  years  from  the  time  the  charter  is  issued  (sec.  77-1). 

10.  Organization  Meeting.  —  There  is  no  statute  in  force  in  Arizona  ex- 

227 


DIGEST   OF   INCORPORATION    ACTS. — ARIZONA. 

pressly  permitting  the  holding  of  either  the  organization  or  stockholders'  meet- 
ings outside  of  the  Territory  of  Arizona.  The  Territorial  officials,  however, 
permit  articles  of  incorporation  to  be  filed  and  recorded  in  their  offices  wherein 
it  is  expressly  provided  that  both  organization  and  stockholders'  meetings  may 
be  held  without  the  Territory.  In  the  case  of  Chase  v.  Fleming,  decided  by  the 
Arizona  District  Court  in  1904,  it  was  held  as  follows :  In  this  particular  case 
the  articles  of  incorporation  provided  that  the  principal  place  of  business  of  the 
corporation  should  be  at  Philadelphia ;  that  the  affairs  of  the  corporation  should 
be  conducted  by  a  board  of  thirteen  directors;  that  the  incorporators  should 
serve  as  directors  for  one  year,  and  should  meet  and  organize  as  a  board  of 
directors  immediately  after  the  filing  of  the  articles  and  should  adopt  by-laws ; 
that  the  board  of  directors  should  be  elected  at  such  time  and  manner  as  should 
be  prescribed  in  the  by-laws.  The  incorporators  held  a  meeting  in  Philadelphia 
shortly  after  the  articles  were  filed  in  Arizona,  at  which  meeting  by-laws  were 
adopted.  These  by-laws  provided  that  the  annual  stockholders'  meeting  should 
be  held  on  the  first  Wednesday  in  December  of  each  year  at  the  principal  office 
of  the  corporation  within  Arizona,  or  at  the  branch  office  in  Philadelphia,  as  the 
board  of  directors  should  determine.  The  meeting,  the  validity  of  which  was 
in  question  in  the  case,  was  held  in  Philadelphia.  The  court  held  that  the  board 
of  directors  elected  at  the  meeting  in  Philadelphia  was  a  de  facto  but  not  a 
de  jure  board.  They  held  that  the  respondent  Fleming  having  attended  such 
meeting  as  a  stockholder  was  estopped  to  question  its  validity.  The  court  held 
that  such  meeting  and  the  acts  of  the  stockholders  taken  thereat  were  not  ipso 
facto  voidr  but  voidable  only  at  the  instance  of  the  person  affected,  provided 
such  person  has  a  legal  right  to  question  the  act  complained  of,  and  provided, 
further,  that  he  has  not  estopped  himself  from  so  questioning  them.  In  the  case 
in  question  the  articles  of  incorporation  expressly  provided  that  the  time  and 
manner  of  the  election  of  the  board  of  directors  should  be  prescribed  in  the 
by-laws,  and  the  by-laws  afterwards  adopted,  provided  that  the  stockholders' 
meeting  "should  be  held  at  the  principal  office  or  branch  office  as  the  board 
of  directors  should  determine." 

11.  Meetings,  Stockholders'  and  Directors'.  —  There  is  no  statute 
authorizing  stockholders'  meetings  to  be  held  without  the  Territory.  In  the 
case  of  Chase  v.  Fleming,  decided  by  the  local  District  Court  at  Phoenix, 
Arizona,  in  1904,  the  court  made  the  following  holding  :  "A  corporation  duly 
organized  may  not,  except  by  express  authority  of  law,  legally  act  as  such 
corporation  through  its  stockholders  outside  the  state  of  its  creation.  A  meet- 
ing of  the  stockholders  so  held  is  unlawful,  and  the  acts  of  the  stockholders 
thereat  are  invalid.  Such  meeting  and  the  acts  of  the  stockholders  thereat 
are  not,  however,  ipso  facto  void,  but  voidable  only  at  the  instance  of  a  per- 
son affected  who  has  the  right  to  question  them.  A  stockholder  present  and 
acquiescing  may  not,  however,  question  the  legality  of  the  meeting  or  the 
acts  performed  thereat."  Directors'  meetings  may  be  held  within  or  without 
the  Territory,  as  the  by-laws  may  provide.  In  the  absence  of  any  statute 
giving  that  right,  authority  to  vote  by  proxy  at  stockholders'  meetings  should 
be  provided  for  in  the  articles  of  incorporation. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  may  be  any  number  of  directors.  They  need  not  be  stockholders,  and 
there-are  no  residential  requirements. 

6.  Liabilities.  —  Every  officer,  agent,  or  clerk  of  any  corporation  or  of  any 
person  proposing  to  organize  a  corporation,  or  to  increase  the  capital  stock  of 

228 


DIGEST    OF   INCORPORATION    ACTS.  —  ARIZONA. 

any  corporation,  who  knowingly  exhibits  any  false,  forged,  or  altered  book, 
paper,  voucher,  security,  or  other  instrument  of  evidence,  to  any  public  officer 
or  board  authorized  by  law  to  examine  the  organization  of  such  corporation,  or 
to  investigate  its  affairs,  or  to  be  allowed  an  increase  of  its  capital,  with  intent 
to  deceive  such  officer  or  board  in  respect  thereto,  is  punishable  by  imprison- 
ment in  the  territorial  prison  not  less  than  three  nor  more  than  ten  years  (Penal 
Code,  sec.  502). 

Every  person  who,  without  being  authorized  so  to  do,  subscribes  the  name 
of  another  to  or  inserts  the  name  of  another  in  any  prospectus,  circular,  or  other 
advertisement  or  announcement  of  any  corporation  or  joint  stock  association, 
existing  or  intended  to  be  formed,  with  intent  to  permit  the  same  to  be  published, 
and  thereby  to  lead  persons  to  believe  that  the  person  whose  name  is  so  sub- 
scribed is  an  officer,  agent,  member,  or  promoter  of  such  corporation  or  asso- 
ciation, is  guilty  of  a  misdemeanor  (Penal  Code,  sec.  503). 

Every  director  of  any  stock  corporation  who  concurs  in  any  vote  or  act  of 
the  directors  of  such  corporation,  or  any  of  them,  by  which  it  is  intended  either 

(1)  to  make  any  dividend,  except  from  the  surplus  profits  arising  from  the 
business  of  the  corporation,  and  in  the  cases  and  manner  allowed  by  law;    or 

(2)  to  divide,  withdraw,  or  in  any  manner,  except  as  provided  by  law,  pay  to 
the  stockholders,  or  any  of  them,  any  part  of  the  capital  stock  of  the  corporation ; 
or  (3)  to  discount  or  receive  any  note  or  other  evidence  of  debt  in  payment  of 
any  instalment  actually  called  in  and  required  to  be  paid,  or  with  the  intent  to 
provide  the  means  of  making  such  payment;  or  (4)  to  receive  or  discount  any 
note  or  other  evidence  of  debt,  with  the  intent  to  enable  any  stockholder  to  with- 
draw any  part  of  the  money  paid  in  by  him,  or  his  stock;  or  (5)  to  receive  from 
any  other  stock  corporation  in  exchange  for  the  shares,  notes,  bonds,  or  other 
evidences  of  debt  of  their  own  corporation,  shares  of  the  capital  stock  of  such 
other  corporation,  or  notes,  bonds,  or  other  evidences  of  the  debt  issued  by  such 
other  corporation,  is  guilty  of  a  misdemeanor  (Penal  Code,  sec.  504). 

Every  director,  officer,  or  agent  of  any  corporation  or  joint  stock  associa- 
tion, who  knowingly  receives  or  possesses  himself  of  any  property  of  such  cor- 
poration or  association,  otherwise  than  in  payment  of  a  just  demand,  and  who, 
with  intent  to  defraud,  omits  to  make  or  to  cause  or  direct  to  be  made,  a  full  and 
true  entry  thereof  in  the  books  or  accounts  of  such  corporation  or  association, 
and  every  director,  officer,  agent,  or  member  of  any  corporation  or  joint  stock 
association  who  with  intent  to  defraud,  destroys,  alters,  mutilates,  or  falsifies 
any  of  the  books,  papers,  writings,  or  securities  belonging  to  such  corporation 
or  association,  or  makes  or  concurs  in  making  any  false  entries,  or  omits  or 
concurs  in  omitting  to  make  any  material  entry,  in  any  association,  is  punish- 
able by  imprisonment  in  the  territorial  prison  not  less  than  three  nor  more  than 
ten  years,  or  by  imprisonment  in  a  county  jail  not  exceeding  six  months,  and  a 
fine  not  exceeding  five  hundred  dollars,  or  by  both  such  fine  and  imprisonment 
(Penal  Code,  sec.  707). 

Every  director,  officer,  or  agent  of  any  corporation  or  joint-stock  associa- 
tion who  knowingly  concurs  in  making,  publishing,  or  posting  any  written  re- 
port, exhibit,  or  statement  of  its  affairs  or  pecuniary  condition,  or  book  or  notice 
containing  any  material  statement  which  is  false,  or  refuses  to  make  any  book 
or  post  any  notice  required  by  law,  in  the  manner  required  by  law,  other  than 
Buch  as  are  mentioned  in  this  chapter,  is  guilty  of  a  felony  (Penal  Code,  see.  508). 

Every  officer  or  agent  of  any  corporation  having  or  keeping  an  office  within 
this  territory  who  has  in  his  custody  or  control  any  book,  paper,  or  document  of 

229 


DIGEST    OF   INCORPORATION    ACTS.  —  ARIZONA. 

such  corporation,  and  who  refuses  to  give  to  a  stockholder  or  member  of  such 
corporation  lawfully  demanding  during  office  hours,  to  inspect  or  take  a  copy  of 
the  same,  or  any  part  thereof,  a  reasonable  opportunity  so  to  do,  is  guilty  of  a 
misdemeanor  (Penal  Code,  sec.  509). 

Every  director  of  a  corporation  or  joint  stock  association  is  deemed  to  possess 
such  a  knowledge  of  the  affairs  of  his  corporation  as  to  enable  him  to  determine 
whether  any  act,  proceeding,  or  omission  of  its  directors  is  a  violation  of  this 
chapter  (Penal  Code,  sec.  512). 

Every  director  of  a  corporation  or  joint  stock  association  who  is  present  at 
a  meeting  of  the  directors  at  which  any  act,  proceeding,  or  omission  of  such 
directors  in  violation  of  this  chapter,  occurs,  is  deemed  to  have  concurred  therein, 
unless  he  at  the  time  causes,  or  in  writing  requires,  his  dissent  therefrom  to  be 
entered  in  the  minutes  of  the  directors  (Penal  Code,  sec.  513). 

Every  director  of  a  corporation  or  joint  stock  association,  although  not 
present  at  a  meeting  of  the  directors  at  which  any  act,  proceeding,  or  omission  of 
such  directors  in  violation  of  this  chapter  occurs,  is  deemed  to  have  concurred 
therein,  if  the  facts  constituting  such  violation  appear  on  the  records  of  the 
minutes  of  proceedings  of  the  board  of  directors,  and  he  remains  a  director  of 
the  same  company  for  six  months  thereafter,  and  does  not  within  that  time 
cause,  or  in  writing  require,  his  dissent  from  such  illegality  to  be  entered  in  the 
minutes  of  the  directors  (Penal  Code,  sec.  514). 

It  is  no  defence  to  a  prosecution  for  a  violation  of  the  provisions  of  this 
chapter,  that  the  corporation  was  one  created  by  the  laws  of  another  territory, 
State,  government,  or  country,  if  it  was  one  carrying  on  business  or  keeping  an 
office  therefor  within  this  territory  (Penal  Code,  sec.  515). 

The  term  "director"  as  used  in  this  chapter  embraces  any  of  the  persons 
having  by  law  the  direction  or  management  of  the  affairs  of  a  corporation  by 
whatever  name  such  persons  are  described  in  its  charter  or  known  by  law  (Penal 
Code,  sec.  516). 

13.  Stockholders'  Liabilities.  —  Unless  the  articles  of  incorporation 
specifically  exempt  them  from  liability,  stockholders  are  liable  for  the  debt 
of  the  corporation  in  the  proportion  which  their  shares  of  stock  bear  to  the 
whole  capital  stock.  Stockholders  are  individually  liable  to  the  amount  of  the 
unpaid  instalments  on  the  stock  owned  by  them  or  transferred  to  them  for 
the  purpose  of  defrauding  creditors,  and  an  execution  against  the  corporation  to 
that  "extent  may  be  levied  upon  the  private  property  of  such  stockholder  (Id. 
sec.  "776 ;  Laws  of  1903,  chap.  88). 

14.  Stock  Certificates.  —  The  statute  does  not  require  specifically  the 
issuance  of  stock  certificates,  nor  does  it  prescribe  who  shall  sign  the  same.  This 
must  be  regulated  by  the  by-laws.  The  par  value  of  the  stock  certificates  may 
be  any  amount. 

15.  Preferred  Stock.  —  The  statute  does  not  expressly  authorize  the  issu- 
ance of  preferred  stock.  The  Territorial  Auditor  permits  the  filing  of  articles 
in  bis  office  providing  for  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  The  statute  is  silent  as  to  how  the 
capital  stock  shall  be  paid.  In  the  absence  of  express  provisions  in  the  articles 
authorizing  the  payment  of  stock  in  property  or  services,  stock  must  be  paid 
for  in  money  or  money's  worth.     (See  Penal  Code,  sec.  504,  sub.  5.) 

17.  Books.  —  The  statute  does  not  specifically  require  that  any  books  shall 
be  kept  within  the  Territory.  It  does,  however,  require  that  a  transfer  book 
shall  be  kept  showing  the  names  of  the  persons  by  whom  and  to  whom  stock 

230 


DIGEST    OF   INCORPORATION    ACTS.  —  ARIZONA. 

transfers  are  made,  the  number  of  shares,  and  the  date  of  the  transfer.  It  must 
also  show  the  original  stockholders,  their  respective  addresses,  the  amount  which 
has  been  paid  in,  and  all  transfers  thereof.  Such  books  and  records  or  correct 
copies  thereof,  so  far  as  they  relate  to  the  items  mentioned  above,  shall  be  at 
all  times  subject  to  the  inspection  of  any  stockholder  (Id.  sec.  778).  The  loca- 
tion of  the  transfer  book  would  appear  to  be  presumptively,  if  not  actually, 
at  the  principal  place  for  transacting  business  (Penal  Code,  sec.  509). 

18.  Office  and  Agent  (Id.  sec.  783).  —  All  corporations  are  required  to 
name  in  their  articles  the  location  of  their  principal  place  of  business  within 
the  Territory.  They  are  also  required  to  appoint  a  bona  fide  resident  of  the 
Territory,  who  has  a  residence  of  three  years'  standing,  as  the  agent  upon  whom 
process  may  be  served  within  the  Territory  (Laws  of  1903,  Act  82).  This  ap- 
pointment must  be  filed  with  the  Territorial  Auditor  (Laws  of  1903,  chap.  82). 

19.  Reports. — An  annual  statement  must  be  filed  in  the  office  of  the 
State  Corporation  Commission  by  all  corporations  in  June  of  each  year.  For 
fifing  this  statement  a  charge  of  $5  is  made. 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  in  force  in 
the  Territory  except  such  as  have  been  passed  by  Congress  and  are  in  force 
everywhere.  (See  Penal  Code,  sec.  504,  forbidding  the  acquisition  of  the  stock 
and  bonds  of  other  corporations.) 

21.  Statutory  Grounds  for  Forfeiture  of  Charter. — The  statute  pro- 
vides that  persons  acting  as  a  corporation  under  the  General  Act  shall  be  pre- 
sumed to  be  legally  organized  until  the  contrary  is  shown,  and  no  such  franchise 
shall  be  declared  to  be  actually  null  and  forfeited  except  in  a  regular  proceeding 
brought  for  that  purpose  (Id.  sec.  779).  The  statute  further  provides  that  any 
corporation  organized  or  attempted  to  be  organized  under  the  General  Act  shall 
cease  to  exist  by  non-user  of  its  franchise  for  five  years  at  any  one  time  (Id. 
sec.  774).  Charter  may  be  forfeited  for  failure  to  appoint  and  maintain  resident 
agent  (Laws  of  1903,  Act  88.  For  additional  grounds  for  forfeiture  of  charter, 
see  Laws  of  1903,  chap.  82). 

22.  Amendments  (Id.  sec.  770).  —  Capital  stock  may  be  increased  or 
decreased  and  articles  may  be  amended  in  any  particular  by  the  affirmative 
vote  of  a  majority  of  the  stockholders.  Such  amendments  shall  be  signed  and 
acknowledged  by  the  president  and  attested  by  the  secretary  of  the  corporation, 
and  must  be  recorded  and  published  in  the  same  manner  as  the  original  articles 
(Laws  of  1903,  Act  88). 

23.  Annual  Franchise  Tax.  —  Every  corporation  must  pay  inithe  month 
of  June  of  each  year  a  registration  fee  of  $15.  There  must  also  be  filed  at  the 
same  time  an  annual  statement,  for  the  filing  of  which  a  charge  of  $5  is  made. 

24.  Extension  of  Corporate  Existence.  —  May  extend  corporate  exist- 
ence for  an  additional  period  of  twenty-five  years  (Id.  sec.  771). 

25.  Dissolution.  —  Corporations  may  be  dissolved  by  a  majority  vote  of 
its  members  unless  a  different  rule  is  adopted  in  the  articles  of  incorporation 
(Id.  sees.  772,  775.  For  grounds  for  involuntary  dissolution  of  a  corporation, 
see  Laws  of  1903,  chap.  82). 

26.  Foreign  Corporations.  —  Before  transacting  business  in  the  Territory 
foreign  corporations  must  file  a  certified  and  duly  authenticated  copy  of  their 
articles  of  incorporation  or  charter,  and  the  appointrrient  of  an  apvnl  upon 
whom  process  may  be  served  with  the  Auditor  of  the  Territory  and  with  the 
county  recorder  of  each  county  in  which  it  docs  business  or  has  an  office.  1  he 
appointment  of  the  agent  must  be  in  writing,  signed  by  the  presidenl  and  attested 

23  I 


DIGEST   OF   INCORPORATION   ACTS.  —  ARIZONA. 

by  the  secretary  of  the  corporation,  and  be  based  upon  a  resolution  duly  adopted 
by  the  board  of  directors.  The  agent  must  have  been  a  bona  fide  resident  of 
the  county  wherein  appointed,  for  three  consecutive  years  prior  to  his  appoint- 
ment. The  corporation  must  publish  six  times  in  some  newspaper  published  in 
each  of  said  counties  a  copy  of  its  articles  of  incorporation,  and  upon  the  ex- 
piration of  such  publication  file  an  affidavit  thereof  in  the  office  of  the  Territorial 
Auditor.  The  appointment  of  the  agent  must  be  by  the  board  of  directors. 
Fees  for  filing  and  recording  are  the  same  as  for  domestic  corporations  (Id. 
sees.  909-925).  Except  in  the  case  of  corporations  organized  for  mining  or 
manufacturing  purposes,  foreign  corporations  are  limited  to  real  estate  holdings 
of  320  acres  (sec.  913). 

Babbitt  v.  Field,  52  Pac.  775. 


232 


DIGEST    OF    INCORPORATION    ACTS.  —  ARKANSAS. 


ARKANSAS. 

(The  references  cited  below  are  to  Kirby's  Digest  of  the  Statutes  of  Arkansas,  1904,  chap. 
31,  unless  otherwise  stated.) 

1.  Statute  under  which  Business  Corporations  may  incorporate.  — 

The  general  Business  Corporation  Act  of  Arkansas  is  to  be  found  in  Kirby's 
Digest  of  the  Statutes  of  Arkansas,  1904,  chap.  31,  sees.  824  to  871  inclusive; 
953  to  958  inclusive,  and  acts  amendatory  thereof.  Special  acts  exist  for  the 
incorporation  of  navigation,  traction,  lighting,  trust  and  surety,  turnpike  and 
plank  roads,  bureaus  of  immigration,  railway,  raft  and  boom  companies,  and 
eleemosynary  corporations.  Under  the  act  corporations  may  be  chartered  for 
any  lawful  purpose  not  covered  by  the  special  acts  referred  to. 

2.  Incorporators. — Three  or  more.  There  are  no  residential  require- 
ments (sec.  837). 

3.  Contents  of  the  Articles  of  Association  (sec.  845).  —  The  articles 
of  association  must  contain : 

a.  Name.  —  Any  name  permitted. 

b.  Incorporators.  —  Names  and  residences  of  the  incorporators. 

c.  Domiciliartj  Office.  —  The  location  of  the  principal  place  of  business  and 
the  office  of  the  company  for  the  transaction  of  business  within  the  State. 

d.  Purposes.  —  Persons  desiring  to  incorporate  under  the  General  Act  may 
do  so  by  setting  forth  the  purposes  for  which  the  corporation  is  formed.  These 
purposes  include  any  kind  of  manufacturing,  mechanical,  mining,  and  other 
lawful  business  not  provided  for  by  special  acts.  The  Secretary  of  State  per- 
mits the  insertion  of  as  many  purposes  as  are  desired,  provided  they  are  not 
covered  by  special  acts  (sees.  837,  845). 

e.  Capital  Stock.  —  The  amount  of  capital  stock  must  be  stated.  There 
is  no  limit  as  to  what  this  amount  may  be.  The  amount  of  capital  stock  sub- 
scribed for  by  the  several  incorporators  must  be  set  forth,  and  this  should  be 
followed  by  a  provision  that  the  residue  of  the  capital  stock  may  be  issued  and 
disposed  of  as  the  board  of  directors  may  from  time  to  time  order  and  direct. 

/.  Number  and  Par  Value  of  Shares.  —  The  par  value  of  the  shares  must 
be  $25  (sec.  838). 

g.  Directors.  —  The  number  of  the  directors  must  be  set  forth,  together 
with  the  provision  that  they  shall  all  be  stockholders  of  the  corporation,  and 
to  this  should  be  added  a  provision  that  the  board  of  directors  shall  elect  one 
of  its  members  president  and  another  as  vice-president,  and  shall  also  elect  a 
secretary  and  treasurer.  The  number  of  directors  may  be  any  number  not  less 
than  three.  There  are  no  residential  requirements,  but  they  must  be  stock- 
holders, and  must  be  chosen  annually  by  the  stockholders  at  such  time  and 
place  as  shall  be  provided  by  the  by-laws  of  the  corporation  (sec.  841).  The 
president  is  a  statutory  officer  and  must  be  a  director.  The  secretary  and 
treasurer  are  also  statutory  officers,  but  need  not  necessarily  be  directors.  The 
last  two  named  must  reside  and  have  their  place  of  business  within  the  State. 

h.  First  Election  for  Directors.  — This  clause  should  provide  thai  the  fir  t 
election  for  directors  shall  be  held  immediately  after  the  organization  of  the 
corporation,  and  that  the  directors  shall  serve  for  one  year  and  until  their 
successors  are  elected. 

233 


DIGEST    OF    INCORPORATION    ACTS.  —  ARKANSAS. 

i.  Powers  of  the  Board  of  Directors.  —  This  clause  may  provide  that  the 
board  of  directors  are  empowered  to  establish  all  by-laws  and  regulations 
necessary  to  the  management  of  the  business  and  affairs  of  the  corporation 
and  to  alter  and  repeal  the  same  at  pleasure. 

/.  Organization  Meeting.  —  This  clause  should  fix  a  time  and  place  for  the 
holding  of  the  organization  meeting,  and  should  contain  a  waiver  by  the  incor- 
porators of  the  notice  of  such  meeting. 

k.  Corporate  Existence.  —  Corporate  existence  under  the  statute  is  per- 
petual.    The  period  of  existence  is  not  required  to  be  stated. 

4.  Statutory  Powers. — The  statutory  powers  found  in  the  General 
Incorporation  Act  are  the  usual  common  law  powers  of  corporations  (sees. 
847,  850,  851).  There  is  a  statutory  lien  given  the  corporation  upon  the 
stock  of  members  for  debts  due  it  (sees.  847,  865-868).  Voting  by  proxy  is 
permitted.  The  right  to  issue  preferred  stock  is  granted  (Laws  of  1905,  chap. 
330). 

5.  W.  Co.  v.  Bank,  68  Ark.  234;    57  S.  W.  257;   Conway  et  al.,  ex  parte,  4  Ark.  302. 

5.  Procuring  the  Charter. — The  articles  of  association  must  be  sub- 
scribed by  each  of  the  incorporators.  The  statute  provides  that  any  two  of 
the  incorporators  may  call  the  first  meeting  of  the  corporation  at  such  time 
and  place  as  they  may  appoint,  by  giving  notice  thereof  in  any  one  or  more 
newspapers  published  in  the  county  in  which  such  corporation  is  to  be  estab- 
lished, or  in  any  adjoining  county,  at  least  fifteen  days  before  the  time  ap- 
pointed for  such  meeting.  But  such  notice  may  be  waived  in  writing,  signed 
by  all  the  subscribers  to  the  capital  stock  of  such  company,  specifying  the 
time  and  place  for  said  first  meeting,  which  writing  shall  be  entered  at  full 
length  upon  the  records  of  the  corporation ;  and  the  first  meeting  of  such  cor- 
poration which  has  been  held  pursuant  to  such  written  waiver  of  notice  shall 
be  valid.  At  this  organization  meeting  the  incorporators  proceed  to  the  elec- 
tion of  a  board  of  directors  and  the  adoption  of  by-laws  for  the  corporation. 
The  directors  must  then  meet  and  elect  a  president,  secretary,  treasurer,  and 
such  other  officers  as  the  by-laws  of  the  corporation  shall  prescribe  (sees.  840, 
841,  843).  The  statute  further  provides  that  before  any  corporation  shall 
commence  business,  the  president  and  directors  thereof  shall  file  their  articles 
of  association  and  also  subscribe  under  oath  or  affirmation  to  a  certificate  set- 
ting forth  the  purposes  for  which  said  corporation  is  formed,  the  amount  of 
its  capital  stock,  the  amount  actually  paid  in,  and  the  names  of  its  stock- 
holders and  the  number  of  shares  by  each  respectively  owned,  with  the  clerk 
of  the  county  in  which  the  corporation  is  to  have  its  principal  place  of 
business;  and  shall  file  said  articles  and  certificate  bearing  the  endorsement 
of  the  county  clerk  in  the  office  of  the  Secretary  of  State.  Said  certificate 
shall  be  recorded  by  said  county  clerk  and  Secretary  of  State  in  books  kept 
by  them  for  that  purpose.  Upon  the  fifing  of  such  endorsed  articles  and 
certificate  with  the  Secretary  of  State,  and  the  payment  of  the  organization 
tax,  the  Secretary  of  State  is  authorized  to  issue  a  certificate  of  incorpora- 
tion in  the  form  prescribed  by  statute,  which  certificate  or  certified  copy 
thereof  is  prima  facie  evidence  of  due  incorporation  (sec.   845). 

Town  of  Searcy  v.  Yarnell,  47  Ark.  269;    Fleener  v.  State,  58  Ark.  98. 

6.  Corporate  Indebtedness.  —  There  is  no  limit  prescribed  by  statute 
to  the  creation  of  corporate  indebtedness.  To  create  a  bonded  indebtedness 
the  consent  of  the  larger  amount  in  value  of  stock  must  be  obtained  at  a  meet- 

234 


DIGEST    OF    INCORPORATION    ACTS.  —  ARKANSAS. 

ing  duly  called  for  that  purpose.  Bonds  cannot  be  issued  except  for  money 
or  property  actually  received  or  labor  done,  and  all  fictitious  increase  of  in- 
debtedness is  void  (Cons.,  Art.  XII.  sec.  8). 

7.  Organization  Tax.  —  All  domestic  corporations  upon  incorporation 
must  pay  into  the  treasury  of  the  State  for  the  filing  of  their  articles  a  fee 
of  $25,  where  the  capital  stock  is  $10,000  or  under;  and  one-tenth  of  one 
per  cent  for  all  in  excess  of  $10,000.  The  organization  tax  thus  imposed 
includes  the  fee  of  the  Secretary  of  State  for  fifing  articles  and  issuing  the 
charter    (Act   of   1911,    No.   89). 

8.  Filing  and  Recording  Fees.  —The  organization  tax  includes  the  fees 
of  the  Secretary  of  State  for  filing  and  recording  the  articles  of  association. 
For  the  issuance  of  a  certificate  of  incorporation,  So.  The  charge  for  issuing 
a  certified  copy  of  articles  of  incorporation  is  15  cents  per  hundred  words,  and 
$1  for  certificate.  This  usually  amounts  to  $2.50.  The  charge  for  filing  and 
recording  amendments  to  articles  of  incorporation  is  $10  for  filing  and  15  cents 
per  hundred  words  for  recording.  The  fee  for  recording  the  articles  in  the 
office  of  the  county  clerk  of  the  county  in  which  the  corporation  is  to  have  its 
principal  place  of  business  is  10  cents  per  hundred  words  and  50  cents  for  cer- 
tificate of  filing.     This  fee  usually  varies  from  $2.50  to  $5  (sec.  S57). 

9.  Commencing  Business  (Id.  sec.  845).  —  Corporations  may  com- 
mence business  as  soon  as  the  president  and  board  of  directors  have  filed  a  true 
copy  of  the  articles  of  association  and  the  certificate  referred  to  in  sec.  5  above. 

Garnett  ct  al.  v.  Richardson  et  al.,  35  Ark.  144;  Connor  v.  Abbott,  35  Ark.  365;  Blackwell 
v.  State,  36  Ark.  178. 

10.  Organization  Meeting  (Id.  sec.  840). —The  organization  meeting 
must  be  held  within  the  State.  Each  incorporator  is  presumed  to  be  a  stock- 
holder to  at  least  the  extent  of  one  share.  It  is  usual  to  fix  the  time  and  place 
for  the  holding  of  the  organization  meeting  in  the  articles  of  association.  In 
the  absence  of  any  such  provision,  two  of  the  incorporators  may  call  the  first 
meeting  at  such  time  and  place  as  they  may  appoint  by  giving  notice  thereof 
in  any  one  or  more  newspapers  published  in  the  county  in  which  such  corpora- 
tion is  to  be  established  or  any  adjoining  county  at  least  fifteen  days  before 
the  time  appointed  for  such  meeting  (Id.  sec.  840).  The  duty  of  the  incor- 
porators is  to  adopt  by-laws  and  elect  a  board  of  directors.  Immediately  after 
the  incorporators'  and  stockholders'  meeting  adjourns,  a  meeting  of  the  board 
of  directors  should  be  held  for  the  purpose  of  electing  a  president,  secretary, 
and  treasurer,  and  such  other  officers  as  may  be  required  by  the  by-laws. 

11.  Meeting  of  Stockholders  and  Directors  (sees.  840-843,  846).  —  In 
the  absence  of  any  statute  providing  otherwise,  all  stockholders'  meetings  must 
be  held  within  the  State.  Directors'  meetings,  after  the  first  meeting,  may  be 
held  within  or  without  the  State,  as  the  by-laws  may  provide. 

Bank  v.  McCarthy,  55  Ark.  473;    18  S.  W.  759;    Blackwell  t>.  State,  36  Ark.  178. 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  at  least  three  directors  who  shall  be  stockholders.  There  are  no  resi- 
dential requirements   (Id.  sec.  841). 

Jones  et  al.  v.  Jarman,  34  Ark.  323;    Worthen  v.  Griffith,  59  Ark.  502;    28  S.  W.  286. 

b.  Liabilities.  —  If  the  president  or  secretary  of  any  business  corporation 
shall  neglect  to  make  the  certificate  showing  the  condition  of  (he  affairs  of  the 
corporation,  as  provided  by  sec.  848,  or  refuse  to  perform  the  duties  required 

2J35 


DIGEST    OF    INCORPORATION    ACTS. — ARKANSAS. 

of  them  respectively,  the  persons  so  neglecting  or  refusing  shall  duly  and  sev- 
erally be  liable  to  an  action  founded  on  the  statute  for  the  debts  of  such  corpora- 
tion contracted  during  the  period  of  such  neglect  or  refusal  (sec.  859  as  amended 
by  L.  1909,  Act  222).  Directors  are  jointly  and  severally  liable  for  the  declara- 
tion and  payment  of  a  dividend  when  the  corporation  is  insolvent  or  the  payment 
of  which  renders  it  insolvent,  knowing  such  corporation  to  be  insolvent  or  that 
the  payment  of  such  dividend  would  render  it  so ;  also  for  debts  of  the  corpora- 
tion contracted  during  the  period  when  they  shall  neglect  or  refuse  to  comply 
with  any  of  the  provisions  of  the  incorporation  act  affecting  them.  If,  by  reason 
of  the  violation  of  any  of  the  provisions  of  the  act  by  the  directors,  a  corpora- 
tion shall  become  insolvent,  then  all  directors  ordering  or  assenting  to  such 
violation  shall  be  jointly  and  severally  liable  for  all  corporate  debts  contracted 
after  such  violation  (sees.  862-864). 

Simon  v.  Association,  54  Ark.  58;     14  S.  W.  1101;    Bank  v.  McCarthy,  55  Ark.  473;    18 
S.  W.  759. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  the  debts  of 
the  corporation  only  to  the  extent  of  the  unpaid  stock  subscribed  for  or  held 
by  them.  The  corporation  may,  by  the  adoption  of  a  proper  by-law,  place  a 
lien  upon  the  shares  of  its  stockholders  for  any  debt  or  liability  they  may  incur 
to  the  company.  The  statute  (Id.  sees.  865,  868)  provides  a  method  for  the 
enforcement  of  this  hen.  If  the  capital  stock  should  be  withdrawn  or  refunded 
to  the  stockholders  before  the  payment  of  all  the  debts  of  the  corporation  for 
which  such  stock  would  have  been  liable,  the  stockholders  are  liable  to  any 
creditor  of  the  corporation  for  the  amount  of  the  sum  refunded  to  them  respec- 
tively (Id.  861). 

Jones  et  al.  v.  Jarman,  34  Ark.  323;    Worthen  v.  Griffith,  59  Ark.  562;    28  S.  W.  286. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him.  Stock  certificates  may  be  signed  by  such  offi- 
cers as  the  by-laws  may  provide.  The  par  value  of  the  shares  must  be  $25, 
except  in  the  case  of  railroad  corporations,  when  they  may  be  $100  (sees.  838,, 
6721). 

15.  Preferred  Stock.  —  All  business  corporations  have  power  to  issue 
preferred  stock  with  such  preferences,  voting  powers,  and  restrictions  or  quali- 
fications thereunder  as  shall  be  stated  and  expressed  in  the  certificate  of  incor- 
poration or  in  any  certificate  of  amendment  thereof.  Such  preferred  stock  may, 
if  so  desired,  be  made  subject  to  redemption  at  any  time  after  three  years  from 
the  issue  thereof  at  a  price  not  less  than  par,  and  the  holders  thereof  shall  be 
entitled  to  receive,  and  the  corporation  shall  be  bound  to  pay  thereon,  dividends. 
at  such  rates  and  under  such  conditions  as  shall  be  stated  in  the  original  or 
amended  certificates  of  incorporation,  not  exceeding  eight  per  centum  per 
annum,  payable  quarterly,  half-yearly,  or  yearly  ;  and  such  dividends  may  be 
made  payable  before  any  dividends  shall  be  set  apart  or  paid  on  the  common 
stock,  and  may  be  made  cumulative,  provided  the  corporation  shall  set  apart 
and  pay  the  same  dividend  to  the  holders  of  non-cumulative  preferred  stock 
before  any  dividend  shall  be  paid  on  the  common  stock,  and  in  no  event  shall 
the  holders  of  preferred  stock  be  personally  liable  for  the  debts  of  the  corpora- 
tion; but  in  case  of  insolvency  its  debts  or  other  liabilities  shall  be  paid  in 
preference  to  the  preferred  stock  (Acts  of  Ark.,  1905,  Act  330). 

16.  Payment  of  Capital  Stock.  —  Under  the  constitution  capital  stock 

236 


DIGEST    OF   INCORPORATION    ACTS.  —  ARKANSAS. 

can  be  issued  only  for  money  and  property  actually  received  or  labor  done 
(Cons.,   1S74,  Art.  XII.  sec.  8). 

Carter  v.  Company,  54  Ark.  576;    16  S.  W.  579;    Fletcher  v.  Bank  (Ark.);   69  S.  W.  580. 

17.  Books. — The  books  must  be  kept  within  the  State  at  the  principal 
office  of  the  corporation  therein  or  at  the  office  of  the  treasurer  within  the 
State  (Id.  sec.  852).  The  statute  gives  to  all  stockholders  the  right  to  inspect 
and  examine  the  same   (Id.  sec.  852). 

18.  Office.  —  The  corporation  must  maintain  an  office  within  the  State,  and 
its  secretary  and  treasurer  must  reside  within  the  State  (Id.  sees,  843,  852.  See 
also  Laws  1909,  Act  98). 

19.  Reports.  —  At  least  once  a  year,  by  order  of  the  directors,  a  true  state- 
ment of  the  accounts  of  the  corporation  shall  be  made  to  the  stockholders 
(sec.  852).  An  annual  report  must  be  filed  with  the  Arkansas  Tax  Commis- 
sion on  or  before  July  first  of  each  year  upon  forms  prescribed  by  the  Com- 
mission. This  report  must  be  signed  and  sworn  to  by  the  president,  vice  presi- 
dent, secretary  or  general  manager  of  the  corporation  (Laws  of  1911,  Act  112). 

Under  Act  I.  of  the  Acts  of  Arkansas,  1905,  the  Secretary  of  State,  on  or 
before  the  1st  day  of  July  of  each  year,  addresses  to  the  president,  secretary, 
or  treasurer  of  each  incorporated  company  doing  business  in  the  State  a  letter 
of  inquiry  as  to  whether  the  said  corporation  has  all  or  any  part  of  its  interest 
or  business  in  or  with  any  trust,  combination,  or  association  of  persons  of  the 
kind  described  in  what  is  known  as  the  "Anti-Trust  Act  of  1905."  Such  officers 
are  required  to  answer  under  oath  such  inquiry,  the  form  of  affidavit  for  that 
purpose  being  enclosed.     (See  also  Laws  of  1907,  chap.  451.) 

Neb.  Nat.  Bank  v.  Walsh,  68  Ark.  433;    59  S.  W.  952. 

20.  Anti-Trust  Statute.  —  Under  the  Act  of  January  23,  1905,  Acts  of 
Arkansas,  1905,  chap.  1,  a  very  drastic  act  is  enacted,  providing  a  punishment 
for  pools,  trusts,  and  conspiracies  to  control  prices. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Corporations  may 

forfeit  their  charters  by  misuser  or  non-user  in  matters  that  go  to  the  essential 

elements  of  their  creation  (Darnell  v.  State,  48  Ark.  321).    The  charter  may 

also  be  forfeited  for  violations  of  the  Anti-Trust  Statute  (Acts  of  Ark.,  1905, 

«hap.  1). 

Darnell  v.  State,  48  Ark.  321;  3  S.  W.  365;  State  v.  Bank,  5  Ark.  595;  Blackwell  v. 
State,  36  Ark.  178;    Brown  v.  Ry.  Co.,  68  Ark.  134;    56  S.  W.  862. 

22.  Amendments.  — The  power  of  amendment  in  Arkansas  is  broad,  but 
is  also  somewhat  complicated.  To  reduce  the  capital  stock  either  by  releas- 
ing unpaid  subscriptions  for  stock  or  by  returning  to  the  shareholders  a  portion 
of  the  amount  paid  in  by  them,  such  reduction  must  be  made  by  a  resolution 
duly  adopted  by  a  majority  of  the  stockholders,  and  a  copy  of  such  resolution 
must  be  filed  as  amendment  to  the  charter  in  the  offices  of  the  Secretary  of  State 
and  the  county  clerk  of  the  county  in  which  the  corporation  transacts  business, 
and  such  amendment  must  be  published  once  in  some  newspaper  published 
within  the  county.  To  authorize  the  corporation  to  engage  in  additional  lines 
of  business,  the  stockholders  must  authorize  such  change  by  a  majority  vote 
at  a  meeting  duly  called  for  that  purpose.  Then  the  president  and  directors 
shall  cause  such  of  the  amended  articles  as  specify  the  purposes  for  which  the 
corporation  is  formed,  subscribed  by  the  stockholders,  to  be  published  in  a 
newspaper  printed  in  the  county  in  which  such  corporation  is  located,  or  any 

237 


DIGEST    OF   INCORPORATION    ACTS.  —  ARKANSAS. 

adjoining  county,  and  shall  also  make  a  certificate  of  the  purpose  for  which 
Buch  corporation  is  formed  as  changed  by  the  amended  articles,  which  certifi- 
cate shall  be  signed  and  deposited  and  recorded  in  the  same  manner  as  the 
original  certificate.  To  increase  the  capital  stock  such  increase  must  be  voted 
for  by  a  majority  of  the  stockholders  at  a  meeting  especially  called  for  that 
purpose.  After  the  increase  is  approved  the  president  and  directors  shall  within 
thirty  days  thereafter  make  a  certificate  thereof,  which  must  be  signed,  de- 
posited, and  recorded  the  same  as  an  original  certificate.  By  the  Act  of  April 
11,  1901,  a  corporation  may  change  its  name  and  number  of  directors  by  a  resolu- 
tion of  the  stockholders  duly  adopted  by  a  majority  thereof  at  a  meeting  called 
for  that  purpose.  A  copy  of  such  resolution  duly  certified  by  the  president  and 
secretary  must  be  filed  with  the  clerk  of  the  county  court  of  the  county  in  which 
the  principal  place  of  business  is  located,  and  also  with  the  Secretary  of  State. 
To  change  its  principal  place  of  business  within  the  State  to  a  county  within 
the  State  the  president  and  secretary  must  procure  from  the  county  clerk  of  the 
county  from  which  it  removes  a  certified  copy  of  the  records  of  its  articles  of 
association,  etc.,  to  which  certified  copy  shall  be  attached  the  certificate  of 
such  president  and  secretary  that  such  corporation  has  thus  removed,  which 
certified  copy  of  the  certificate  must  be  filed  and  recorded  in  the  office  of 
the  county  clerk  of  the  county  to  which  such  corporation  shall  remove.  A 
similar  certified  copy  of  the  certificate  must  be  filed  in  the  office  of  the  secretary 
in  such  State.  A  duplicate  copy  of  such  certificate  must  be  published  in  a  news- 
paper in  the  county  in  which  such  corporation  shall  be  located.  If  the  removal 
is  from  one  county  to  another,  there  must  be  two  publications,  one  in  a  news- 
paper in  each  county  (Id.  854-857,  860). 

Brown  v.  W.  &  S.  E.  Ry.  Co.,  68  Ark.  134;   56  S.  W.  862. 

23.  Annual  Franchise  Tax.  —  Domestic  corporations  doing  business  in 
the  State  must  annually  on  or  before  July  1  of  each  year  file  with  the 
Arkansas  Tax  Commission  a  report  signed  and  sworn  to  by  the  president, 
vice  president,  secretary  or  general  manager  of  the  corporation,  which  report 
shall  contain  (a)  the  name  of  the  corporation ;  (b)  the  location  of  its  principal 
office;  (c)  the  names  of  the  president,  secretary,  treasurer  and  members  of 
the  board  of  directors  with  the  post  office  address  of  each ;  (d)  the  amount 
of  authorized  capital  stock;  (e)  the  amount  of  capital  stock  subscribed,  the 
amount  of  capital  stock  issued  and  outstanding,  the  amount  of  capital  stock 
paid  up  and  the  par  and  market  value  of  such  stock  ;  (f)  the  nature  and  kind 
of  business  in  which  the  corporation  is  engaged  and  its  place  of  business  ; 
(g)  the  amount  of  its  capital  stock  employed  and  the  value  of  its  property 
within  this  State,  and  the  amount  of  its  capital  stock  employed  and  the 
value  of  its  property  without  the  State,  except  as  hereinafter  provided  ; 
(h)  the  change  or  changes,  if  any,  in  the  above  particulars,  made  since  the 
last  annual  report  (L.  of  1911,  Act  112,  sec.  2). 

Upon  the  filing  of  the  report  provided  for  in  sections  1  and  2  of  Act  112, 
Laws  of  1911,  the  Commission  or  tax  assessor  as  the  case  may  be,  after  find- 
ing such  report  to  be  correct,  shall  report  to  the  Auditor  of  State,  who  shall 
charge  and  certify  to  the  Treasurer  of  State  for  collection,  on  or  before  July 
20,  as  herein  provided,  from  such  corporation,  a  tax  of  one-twentieth  of  one 
per  cent  upon  that  part  of  its  subscribed  or  issued  and  outstanding  capital  em- 
ployed in  Arkansas  except  as  hereinafter  provided  (Laws  of  1911,  Act  112, 
sect.  3). 

238 


DIGEST    OF    INCORPORATION    ACTS.  —  ARKANSAS. 

24.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for 
extension  of  corporate  existence. 

25.  Dissolution.  —  Corporations  may  be  dissolved  by  application  to  the 
courts  having  equitable  jurisdiction.  Any  corporation  may  surrender  its 
charter  by  resolution  of  a  majority  in  value  of  the  stockholders,  at  a  meeting 
duly  called  for  that  purpose,  and  filing  a  certified  copy  of  such  resolution  in 
the  office  of  the  Secretary  of  State,  and  in  the  office  of  the  county  clerk  of  the 
county  where  the  principal  place  of  business  of  such  corporation  is  located  (Id. 
sees.  953-95S). 

Town  of  Searcy  v.  Yamell,  47  Ark.  289;  1  S.  W.  319;  Dozier  v.  A.  C.  Mills,  67  Ark.  11; 
53  S.  W.  403;  Curran  v.  State,  15  How.  304;  Jefferson  v.  Edrington,  53  Ark.  545;  Forbes  v. 
Whittemore,  62  Ark.,229. 

26.  Foreign  Corporations.  —  Every  company  or  corporation  incorporated 
under  the  laws  of  any  other  State,  Territory,  or  country,  including  foreign  rail- 
road and  foreign  fire  and  life  insurance  companies  now  or  hereafter  doing  busi- 
ness in  this  State,  shall  file  in  the  office  of  the  Secretary  of  State  of  this  State  a 
copy  of  its  charter  or  articles  of  incorporation  or  association  or  a  copy  of  its  cer- 
tificate of  incorporation  duly  authenticated  and  certified  by  the  proper  authority, 
together  with  a  statement  of  its  assets  and  liabilities  and  the  amount  of  its  cap- 
ital employed  in  this  State,  and  shall  also  designate  its  general  office  or  place  of 
business  in  this  State,  and  shall  name  an  agent  upon  whom  service  of  process 
may  be  made.  Provided,  before  authority  is  granted  any  foreign  corporation 
to  do  business  in  this  State,  it  must  file  with  the  Secretary  of  State  a  resolution 
adopted  by  its  board  of  directors  consenting  that  service  of  process  upon  any 
agent  of  such  company  in  this  State  or  upon  the  Secretary  of  State  of  this  State 
in  any  action  brought  or  pending  in  this  State  shall  be  valid  service  upon  such 
company ;  and  if  process  is  served  upon  the  Secretary  of  State,  it  shall  be  his 
duty  to  at  once  send  it  by  mail  addressed  to  the  company  at  its  principal  office; 
and  if  any  company  shall,  without  the  consent  of  the  other  party  to  any  suit  or 
proceeding  brought  by  or  against  it  in  any  court  of  this  State,  remove  such 
suit  or  proceeding  to  any  Federal  court,  or  shall  institute  any  suit  or  proceed- 
ing against  any  citizen  of  this  State  in  any  Federal  court,  it  shall  be  the  duty 
of  the  Secretary  of  State  to  forthwith  revoke  the  authority  of  said  company  and 
its  agents  to  do  business  in  this  State,  and  to  publish  such  revocation  in  some 
newspaper  of  general  circulation  published  in  this  State ;  and  if  such  corporation 
shall  thereafter  continue  to  do  business  in  this  State,  it  shall  be  subject  to  the 
penalty  of  this  act  for  so  continuing  to  do  business  in  this  State  after  such 
revocation.  Any  foreign  corporation  which  shall  fail  to  comply  with  the  pro- 
visions of  this  act  and  shall  do  any  business  in  this  State  shall  be  subject  to 
a  fine  of  not  less  than  $1,000,  to  be  recovered  in  any  court  of  competent  juris- 
diction, and  all  fines  so  recovered  shall  be  paid  into  the  general  revenue  fund 
of  the  county  in  which  the  cause  of  action  shall  accrue;  and  it  is  hereby  made 
a  duty  of  the  prosecuting  attorneys  to  institute  such  suit,  in  the  name  of  the 
State  for  the  use  and  benefit  of  the  county  in  which  the  suit  is  brought,  and 
said  prosecuting  attorney  shall  receive  as  liis  compensation  one-fourth  of  tin- 
amount  recovered,  and  as  an  additional  penalty  any  foreign  corporation  which 
shall  fail  or  refuse  to  file  its  articles  of  incorporation  or  certificate  aforesaid 
cannot  make  any  contract  in  this  State  which  can  be  enforced  by  it  either  in 
law  or  in  equity,  and  the  complying  with  the  provisions  of  this  act  after  suit 
is  brought  shall  in  no  way  validate  said  contract. 

All  corporations  hereinafter  incorporated  in  this  State,  and  all  foreign  0OF> 

239 


DIGEST    OF    INCORPORATION    ACTS.  —  ARKANSAS. 

porations  seeking  to  do  business  in  this  State,  shall  pay  into  the  treasury  of 
this  State  for  the  filing  of  such  articles  a  fee  of  $25  where  the  capital  stock  is 
$10,000  or  under;  one-tenth  of  one  per  cent  on  all  amounts  in  excess  of 
810,000.  This  tax  in  the  case  of  foreign  corporations  is  based  on  the  pro- 
portion of  capital  stock  represented  by  property  and  business  in  the  State  of 
Arkansas  (Acts  of  1911,  no.  197). 

Before  any  foreign  corporation  shall  be  authorized  to  do  intrastate  business 
in  Arkansas,  or  permitted  to  continue  to  do  intrastate  business,  it  shall  file  with 
the  Secretary  of  State,  under  the  oath  of  its  president,  secretary,  treasurer,  su- 
perintendent or  managing  agent  in  this  State,  a  statement  showing  the  follow- 
ing facts  :  (1)  The  number  of  shares  of  authorized  capital  stock  of  the  company 
and  the  par  value  of  each  share;  (2)  the  value  of  the  property  owned  and  used 
by  the  company  in  Arkansas,  and  the  value  of  the  property  owned  and  used 
outside  of  the  State  of  Arkansas;  (3)  the  proportion  of  the  capital  stock  of  the 
Company  which  is  represented  or  to  be  represented,  and  employed  or  to  be 
employed  in  its  business  transacted  or  to  be  transacted  in  Arkansas;  (4)  the 
proportion  of  its  capital  stock  employed  in  its  business  outside  of  Arkansas, 
stating  the  proportionate  part  used  in  each  city  and  county.  From  the  facts 
thus  reported  and  any  other  facts  coming  to  his  knowledge,  bearing  upon  the 
question,  the  Secretary  of  State  shall  determine  the  proportion  of  the  capital 
stock  of  the  company  represented  by  its  property  and  business  in  Arkansas  and 
upon  which  the  fees  prescribed  herein  are  payable  (Laws  of  1911,  Act  87,  sec. 

3). 

Each  foreign  corporation  for  profit  and  doing  business  in  this  State  and 
owning  or  using  a  part  or  all  of  its  capital  or  plant  in  this  State  and  subject  to 
compliance  with  all  other  provisions  of  law,  and  in  addition  to  all  other  state- 
ments required  by  the  law  shall  make  a  report  in  writing  to  the  Arkansas  Tax 
Commission  on  or  before  July  1,  and  if  such  Tax  Commission  shall  have  been 
abolished  by  law,  then  the  Assessor  of  the  County  in  which  the  principal  place 
of  business  of  such  corporation  in  this  State  shall  be  (Laws  of  1911,  Act  112, 
sees.  4,  5,  6). 

Said  report  shall  contain  (1)  name  of  the  corporation  and  under  the  laws  of 
what  State  or  country  organized;  (2)  the  location  of  its  principal- office;  (3)  the 
names  of  the  president,  secretary,  treasurer  and  members  of  the  Board  of  Di- 
rectors with  the  post-office  addresses  of  each;  (4)  the  date  of  the  annual  elec- 
tion of  officers;  (5)  the  amount  of  authorized  capital  stock  and  the  par  value 
of  each  share;  (6)  the  amount  of  capital  stock  subscribed;  the  amount  of 
capital  stock  issued  and  outstanding;  the  amount  of  capital  stock  paid 
up  and  the  market  value  of  the  same;  (7)  nature  and  kind  of  business  in  which 
the  company  is  engaged,  and  its  place  or  places  of  business  both  within  and 
without  the  State;  (8)  the  name  and  location  of  its  office  or  offices  in  this 
State,  and  the  names  and  addresses  of  the  officers  or  agents  of  the  corporation 
in  charge  of  its  business  in  this  State;  (9)  the  value  of  the  property  owned  and 
used  by  the  Company  in  this  State;  where  situated  and  the  value  of  the 
property  owned  and  used  outside  of  this  State;  (10)  the  change  or  changes, 
if  any,  in  the  above  particulars  made  since  the  last  annual  report  (Laws  of 
1911,  Act  112,  sec.  5). 

Upon  the  filing  of  the  report  provided  for  in  sections  4  and  5  of  this  Act,  the 
Commission  or  Assessor,  as  the  case  may  be,  from  the  facts  thus  reported,  and 
any  other  facts  coming  to  its  or  his  knowledge,  bearing  upon  the  question,  shall 
determine  the  proportion  of  the  authorized  capital  stock  of  the  Company  repre- 

240 


DIGEST    OF    INCORPORATION    ACTS.  ARKANSAS. 

sented  by  its  property  and  business  in  this  State,  on  or  before  July  20,  and  shall 
report  the  same  to  the  auditor  of  the  State,  who  shall  charge  and  certify  to  the 
treasurer  of  the  State  on  or  before  August  1  for  collection  as  herein  provided 
annually  from  such  Company,  in  addition  to  the  initial  fee  authorized  by  law, 
for  the  privilege  of  exercising  its  franchises  in  this  State  one  twentieth  of  one 
per  cent  each  year  thereafter  upon  the  proportion  of  the  authorized  capital 
stock  of  the  corporation  represented  by  the  property  owned  and  used  in  business 
transacted  in  this  State  (Laws  of  1911,  Act  112,  sec.  6). 

Any  foreign  mutual  corporation  having  no  capital  stock  shall  be  required 
to  pay  to  the  Secretary  of  State  for  filing  its  articles  of  incorporation  the 
sum  of  $500;  provided,  however,  nothing  in  this  section  shall  apply  to  fra- 
ternal orders  that  write  insurance  (Acts  of  Ark.,  1907,  Act  313,  approved  May 
13,  1907).  A  fee  of  $1  is  required  to  be  paid  for  filing  appointment  of  agent 
by  foreign  corporations.  Foreign  corporations  are  required  to  pay  the  same 
annual  franchise  tax  as  domestic.     (See  ante,  sec.  23.) 

Gunn  v.  Company,  57  Ark.  24 ;  20  S.  W.  591;  Scruggs  v.  Company,  54  Ark.  566;  16  S  W. 
563;  St.  L.,  etc.  Ry.  Co.  v.  Fire  Ass'n,  60  Ark.  325;  30  S.  W.  350;  Buffalo  Zinc  &  Copper  Co. 
v.  Crump,  70  Ark.  525;  69  S.  W.  572;  W.  R.  Lumber  Co.  v.  Implement  Ass'n,  55  Ark.  625; 
18  S.  W.  1055;  Boyington  v.  Van  Etten,  62  Ark.  63;  35  S.  W.  622;  Railway  v.  Fire  Ass'n. 
55  Ark.  163;   18  S.  W.  43;  Woodson  v.  State,  69  Ark.  521 ;  65  S.  W.  465. 


16  241 


DIGEST   OF    INCORPORATION    ACTS.  —  CALIFORNIA. 


CALIFORNIA. 

(The  references  cited  below  are  to  the  Civil  Code,  unless  otherwise  stated.) 

1.  Statute  under  which  Business  Corporations  may  incorporate.  — 
The  Civil  Code  of  California,  Part  IV.  sees.  283-403,  as  amended  in  certain 
respects  by  subsequent  Session  Laws,  constitutes  the  General  Incorporation  Act 
of  the  State  of  California  for  business  corporations.  There  are  special  acts 
applicable  only  to  insurance,  railway,  street  railway,  wagon  road,  bridge,  ferry, 
wharf,  chute,  pier,  telegraph,  telephone,  water,  canal,  homestead,  savings  and 
loan,  mining,  gas,  and  eleemosynary  corporations,  but  any  kind  of  business 
corporation  may  be  incorporated  under  the  General  Act. 

2.  Incorporators.  — There  may  be  any  number  of  incorporators  not  less 
than  three,  a  majority  of  whom  must  reside  in  the  State  (C.  C,  sees.  285,  292 ; 
Laws  of  1905,  chap.  392). 

People  v.  Company,  97  Cal.  276;    32  Pac.  236. 

3.  Contents  of  the  Articles  of  Incorporation  (C.  C,  sec.  290,  as  amended 

by  Laws  of  1907,  chap.  278).  —  The  articles  must  contain : 

a.  Name.  —  The  use  of  a  name  identical  with  that  or  similar  to  that  of 
an  existing  domestic  corporation  is  forbidden  (C.  C,  sec.  296  ;  Laws  of  1905, 
chap.  103 ;  Laws  of  1906,  chap.  19,  sec.  6 ;  Laws  of  1907,  chap.  403).  The 
use  of  the  word  "trust"  is  forbidden  to  all  corporations  except  those  organ- 
ized to  transact  a  trust  company  business  (Laws  of  1905,  chaps.  259,  279). 

Curtiss  v.  Murray  el  al.,  26  Cal.  633. 

b.  Purpose.  —  Companies  may  be  incorporated  for  any  purpose  not  covered 
by  special  act  (Cons.,  Art.  XIII.  sec.  9 ;   Laws  of  1905,  chap.  392). 

c.  Domiciliary  Office.  —  The  place  where  the  principal  business  is  to  be 
transacted. 

d.  Corporate  Existence.  —  The  term  for  which  it  is  to  exist  not  to  exceed 
fifty  years  (sees.  290,  362). 

e.  Directors.  —  Number  of  directors  not  less  than  three,  together  with  the 
names  and  residences  of  those  appointed  for  the  first  year.  The  directors  must 
be  stockholders,  and  a  majority  residents  of  the  State  (C.  C,  sees.  290,  305 ;  Laws 
of  1905,  chap.  392). 

/.  Capital  Stock.  —  The  amount  of  capital  stock,  which  may  be  any  amount. 
The  number  of  shares  must  also  be  stated,  the  par  value  of  which  may  be  any 
amount.  The  articles  of  incorporation  may  provide  for  classification  of  capital 
stock  into  preferred  and  common.  To  this  must  be  added  a  statement  of  the 
number  of  shares  of  stock  to  which  preference  is  granted  and  the  number  of 
shares  to  which  no  preference  is  granted.  The  articles  must  also  set  forth  the 
nature  and  extent  of  the  preference  granted  and  except  as  to  the  matters  and 
things  so  stated  no  distinction  shall  exist  between  such  classes  of  stock;  pro- 
vided, however,  that  no  preference  shall  be  granted,  nor  shall  any  distinction 
be  made  between  the  classes  of  stock  either  as  to  voting  powers  or  as  to  statutory 
constitutional  liability  of  the  holders  thereof  to  the  creditors  of  the  corporation 
(Laws  of  1907,  chap.  278). 

g.   Original  Stock  Subscriptions.  —  The  amount  actually  subscribed  and  by 

242 


DIGEST    OF    INCORPORATION    ACTS.  —  CALIFORNIA. 

whom.    There  need  be  no  particular  amount  subscribed  beyond  the  one  share 
required  for  each  of  the  incorporators  (Laws  of  1905,  chap.  392). 

Harris  et  al.  v.  McGregor,  29  Cal.  125;  Ex  parte  S.  V.  \Y.  \\\,  l7Cal.  132;  People  v.  Company, 
45Cal.  306;  People  v.  Perrin,  56  Cal.  345;  People  v.  Company,  97  Cal.  276;   32  Pac.  236. 

4.  Statutory  Powers  (C.  C,  sees.  283,  354.  355).  —  In  addition  to  the 
statutory  enumeration  of  the  common  law  powers  of  corporations  (C.  C,  sec. 
354)  there  are  some  express  limitations  upon  the  ordinary  corporate  powers. 
One  is  the  provision  that  no  corporation  shall  acquire  or  hold  any  more  real 
property  than  may  be  reasonably  necessary  for  the  transaction  of  its  business 
or  the  construction  of  its  works.  The  bonded  indebtedness  of  a  corporation 
may  be  created  or  increased  by  a  vote  of  the  stockholders  representing  at  least 
two-thirds  of  the  subscribed  capital  stock  at  a  meeting  called  by  the  board 
of  directors,  and  after  publisliing  notice  of  such  meeting  once  a  week  for  at  least 
sixty  days,  which  notice  shall  state  the  amount  of  bonded  indebtedness  which 
it  is  proposed  to  create,  or  the  amount  to  which  it  is  proposed  to  increase  the 
said  indebtedness.  The  necessity  of  publication  may  be  obviated  by  written 
consents  from  the  holders  of  two-thirds  of  the  outstanding  capital  stock  (C.  C, 
sec.  359).  Domestic  mining  corporations  possessing  mining  claims  adjoining 
each  other  may  consolidate  in  such  manner  and  upon  such  terms  as  may  be 
agreed  upon,  provided  the  written  consent  of  all  the  stockholders  representing 
two-thirds  of  the  capital  stock  of  each  corporation  is  first  obtained,  and  provided 
the  statutory  requirements  relative  to  calling  meetings,  publishing  notice  thereof, 
etc.,  are  complied  with  (C.  C,  sec.  361).  Only  so  much  real  property  as  is  neces- 
sary for  the  transaction  of  corporate  business  can  be  held  (C.  C,  sec.  360 ;  also 
Session  Laws,  1905,  chap.  576). 

The  following  additional  powers  are  conferred :  To  authorize  voting  by 
proxy,  to  permit  cumulative  voting  in  the  election  of  directors,  and  to  forfeit 
stock  for  non-payment  of  assessments  (Cons.,  Art.  XII.  sec.  12 ;  C.  C,  sees. 
307,  312,  331-349;  Laws  of  1903,  chap.  215).  Also  to  sell  and  dispose  of  all 
the  corporate  assets  with  the  consent  of  two-tliirds  of  the  stockholders  (C.  C, 
sees.  364,  584 ;  Laws  of  1903,  chap.  271 ;  Laws  of  1905,  chap.  416,  sec.  4).  Also 
to  remove  directors  (sec.  310;  Laws  of  1905,  chap.  416).  To  accept  devises 
(Laws  of  1903,  chap.  223).  By  the  unanimous  vote  of  all  the  directors  at  any 
regular  meeting  corporations  may  acquire  and  hold  the  land  and  buildings  in 
which  their  business  is  carried  on,  and  may  improve  the  same  to  any  extent 
required  for  the  convenient  transaction  of  its  business  (Laws  of  1905,  chap.  576). 
The  power  of  repealing  and  amending  by-laws  and  of  adopting  new  by-laws 
may,  by  a  two-thirds  vote  of  the  stockholders  cast  at  a  meeting  thereof  called 
for  that  purpose,  or  by  the  written  assent  of  the  holders  of  two-thirds  of  the 
stock,  be  delegated  to  the  board  of  directors  (Laws  of  1905,  chap.  416). 

See  Smith  v.  Morse,  2  Cal.  524;  Smith  v.  Company,  6  Cal.  1  :  Knowles  v.  Sandcrcock,  107 
Cal.  629;  40  Pac.  1017;  Tel.  Co.  v.  Tel.  Co.,  22  Cal.  398;  I  ttion  Water  <'•>.  v.  Murphy  I  ...  ■( 
al.,  22  Cal.  621;    1>.  S.  II.  Hank  v.  Sadler  (Cal.  AppJ,  81  Pac.  1029. 

5.  Procuring  the  Charter. — The  articles  must  lie  signed  and  acknowl- 
edged by  each  of  the  three  or  more  incorporators,  a  majority  of  whom  musl  be 
residents  of  the  State  (C.  C,  sec.  292;  Laws  of  1905,  chap.  392).  The  signature 
of  each  person  named  in  such  articles  of  incorporation  as  directors  of  such 
corporation  shall  be  affixed  to  said  articles  of  incorporation  and  acknowledged  b.\ 
each  (Laws  of  1911,  chap.  589).  Next,  (lie  articles  must  be  filed  in  the  office  of 
the  county  clerk  of  the  county  in  which  the  principal  business  of  the  company 
i    to  be  transacted,  and  a  copy  thereof,  certified  by  the  county  clerk,  must  be 

243 


DIGEST    OF   INCORPORATION    ACTS.  —  CALIFORNIA. 

filed  with  the  Secretary  of  State  (C.  C,  sec.  296).  Before  the  articles  can  be  filed 
with  the  latter  the  organization  tax  (see  below)  and  the  proper  proportional  part 
of  the  annual  license  tax  must  be  paid.  (See  post,  sec.  23;  Laws  of  1909,  chap. 
299).  When  such  tax  is  paid  and  the  articles  duly  filed  with  the  Secretary  of 
State,  the  latter  issues  to  the  corporation,  over  the  Great  Seal  of  the  State,  a  cer- 
tificate that  a  copy  of  the  articles  containing  the  required  statement  of  facts  has 
been  filed  in  his  office,  and  the  statute  then  provides  that  the  persons  signing 
the  articles  and  their  associates  and  successors  shall  thereupon  be  a  body  politic 
and  corporate  by  the  name  stated  in  the  certificate  (C.  C,  sec.  296;  Laws  of 
1901,  chap.  201).  The  due  incorporation  of  any  company  claiming  in  good  faith 
to  be  a  corporation,  doing  business  as  such,  and  its  right  to  exercise  corporate 
powers  shall  not  be  inquired  into  collaterally  in  any  private  suit  to  which  such 
de  facto  corporation  may  be  a  party,  but  such  inquiry  may  be  had  at  the  suit  of 
the  State,  except  in  those  cases  where  the  corporation  has  been  doing  business 
for  ten  consecutive  years  as  a  corporation  (C.  C,  sec.  358;  Laws  of  1901,  chap. 
206).  No  corporation  may  purchase,  locate,  or  hold  property  in  any  county  in 
the  State  other  than  the  county  in  which  its  original  articles  are  filed,  without 
filing  a  copy  of  the  copy  of  the  articles  of  incorporation  filed  in  the  office  of 
the  Secretary  of  State  duly  certified  by  him  in  the  office  of  the  clerk  of  the 
county  in  which  said  property  is  situated  and  within  sixty  days  after  such 
purchase  or  location  is  made  (Laws  of  1905,  chap.  416). 

Martin  v.  Deetz,  102  Cal.  55;  36  Pac.  368;  Rondell  v.  Fay,  32  Cal.  354;  Waterworks  v. 
San  Francisco,  22  Cal.  441. 

6.  Organization  Tax.  —  If  the  capital  stock  amounts  to  $25,000  or  less, 
$15;  over  $25,000  and  not  over  $75,000,  $25;  over  $75,000  and  not  over 
$200,000,  $50 ;  over  $200,000  and  not  over  $500,000,  $75 ;  over  $500,000  and 
not  over  $1,000,000,  $100;  over  $1,000,000,  $50  additional  for  every  $500,000 
or  fractional  part  thereof  of  capital  stock  over  and  above  $1,000,000.  The 
foregoing  fees  are  payable  to  the  Secretary  of  State  upon  fifing  articles  in  his 
office  (Laws  of  1905,  chap.  467). 

7.  Filing  and  Recording  Fees.  —  The  Secretary  of  State  is  entitled  to 
no  additional  fee  for  filing  articles  of  incorporation  other  than  the  payment 
to  him  of  the  organization  tax,  but  for  recording  such  articles  he  is  entitled 
to  charge  20  cents  per  folio.  For  issuing  certificate  of  incorporation,  $3.  For 
copy  of  articles  of  incorporation  on  file  in  his  office,  20  cents  per  folio,  and  for 
affixing  certificate  seal  of  State  thereto,  $2.  For  comparing  copy  of  articles  with 
the  original  on  file  in  his  office,  5  cents  per  folio.  The  county  clerk  is  entitled 
to  a  fee  of  $1  for  filing  articles  of  incorporation,  and  for  copy  of  same  10  cents 
per  folio,  and  for  certificate  for  same,  50  cents  (Pol.  Code,  416;  Gen.  Laws, 
Title  84,  Stat.  1895,  p.  268;  Laws  of  1905,  chap.  467;  Laws  of  1907,  chap.  281. 
As  to  provision  for  issuance  of  duplicate  of  articles  of  incorporation,  where  the 
original  has  been  lost,  see  Laws  of  1906,  chaps.  53  and  61). 

8.  Corporate  Indebtedness.  —  Cannot  exceed  amount  of  subscribed  cap- 
ital stock  (C.  C,  sec.  359,  as  amended  by  Laws  of  1903,  chap.  235;  Laws  of 
1905,  chap.  416,  sec.  4).  (As  to  increase  or  decrease  in  indebtedness,  see  Laws 
of  1907,  chap.  280;  see  also  Laws  of  1907,  chap.  93.) 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  the  certificate  of  incorporation  is  issued  by  the  Secretary  of  State  and  a 
license  to  do  business  has  been  issued  by  that  official  to  the  corporation.  In 
order  to  procure  such  a  license  the  law  provides  that  at  the  time  of  filing  a  cer- 
tified copy  of  articles  of  incorporation  of  any  corporation  the  proportionate 

244 


DIGEST    OF    INCORPORATION    ACTS.  —  CALIFORNIA. 

part  of  the  current  annual  license  tax  must  be  paid  (Laws  of  1909,  chap. 
299).  The  law  provides  that  no  corporation,  either  domestic  or  foreign,  shall 
do  or  attempt  to  do  business  by  virtue  of  its  certificate  of  incorporation  in 
the  State  without  a  State  license  therefor.  They  must  commence  business 
within  one  year  upon  penalty  of  having  their  charter  forfeited  by  proper  action 
commenced  by  the  State  (C.  C,  sec.  358;  see  also  Laws  of  1901,  chap.  147). 
If  the  corporation  has  property  in  other  counties  than  that  where  its  original 
articles  are  filed,  it  must  within  sixty  days  after  such  property  is  purchased, 
located,  or  held,  file  with  the  clerk  of  such  counties  copies  of  its  articles  of 
incorporation  certified  by  the  Secretary  of  State  (C.  C,  sec.  299;  Laws  of  1905, 
chap.  416). 

People  v.  Company,  45  Cal.  306. 

10.  Organization  Meeting.  —  A  preliminary  organization  is  effected  by 
the  stockholders  holding  a  meeting  within  the  State  within  one  month  after 
incorporation  (by  proxy  if  desired)  and  proceeding  to  adopt  by-laws.  These 
must  be  adopted  by  a  two-thirds  vote  of  all  the  stock  issued  and  outstanding. 
By-laws  may,  however,  be  adopted  by  the  written  assent  of  two-thirds  of  the 
stockholdings  without  a  meeting  (C.  C,  sec.  301 ;  Laws  of  1905,  chap.  416). 
The  right  to  repeal  and  amend  by-laws  is  governed  by  the  same  provisions. 
The  power  to  repeal  and  amend  by-laws  and  adopt  new  by-laws  may  by  a  similar 
vote  at  any  such  meeting,  or  similar  written  assent,  be  delegated  to  the  board 
of  directors.  All  by-laws  must  be  certified  by  a  majority  of  the  board  of  directors 
and  the  secretary  of  the  corporation,  and  copied  in  a  book  kept  in  the  office  of 
the  secretary  of  the  corporation,  to  be  known  as  the  book  of  by-laws,  subject 
to  the  inspection  of  the  public  during  business  hours  each  day  (C.  C,  sec.  301 ; 
C.  C,  sec.  364;  Laws  of  1901,  chap.  157,  sees.  67,  68;  Laws  of  1905,  chap.  416). 

Hall  v.  Crandall,  29  Cal.  568. 

11.  Meetings  of  Stockholders  and  Directors.  —  Meetings  of  both  stock- 
holders and  board  of  directors  must  be  held  at  the  corporation's  office  or  princi- 
pal place  of  business  (C.  C,  sec.  319 ;  Laws  of  1905,  chaps.  282,  584 ;  as  to  use 
of  proxy  at  stockholders'  meetings,  see  Laws  of  1905,  chaps.  28,  416,  sees.  7-9). 
At  all  elections  or  votes  had  for  any  purpose  there  must  be  a  majority  of  the 
subscribed  capital  stock  represented  either  in  person  or  by  proxy.  Every  person 
acting  at  said  meeting  must  be  a  stockholder  having  stock  in  his  own  name  on 
the  stock  books  of  the  corporation  at  least  ten  days  prior  to  the  election  (Laws 
of  1907,  chap.  319). 

The  directors  of  all  business  corporations  must  be  elected  annually  by  stock- 
holders, and  if  no  provision  is  made  in  the  by-laws  for  the  time  of  election,  the 
election  must  be  held  on  the  first  Tuesday  in  June.  Notice  of  sucli  election 
must  be  given  i*s  prescribed  in  section  301  of  the  Code,  unless  all  the  stock- 
holders waive  such  notice  in  writing  (Laws  of  1909,  chap.  57). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  at  least  three  directors  who  shall  be  stockholders  and  a  majority 
of  whom  shall  be  residents  of  the  State.  Unless  a  quorum  is  present  no  business 
performed  or  acted  on  is  valid  as  against  the  corporation.  Whenever  a  vacancy 
occurs  in  the  office  of  director,  unless  the  by-laws  of  the  corporation  otherwise 
provide,  such  vacancy  must  be  filled  by  an  appointee  of  the  board  (C.  C, 
sees.  290,  301,  305;  Laws  of  1901,  chap.  145;  Laws  of  1905,  chaps.  392,  4  Hi). 
Cumulative  voting  for  directors  is  permitted  (sec.  307). 

b.  Liabilities.  —  Directors  are  jointly  and  severally  liable  to  the  crediton 

245 


DIGEST    OF    INCORPORATION    ACTS.  —  CALIFORNIA. 

and  stockholders  for  all  moneys  embezzled  or  misappropriated  by  the  officers 
during  their  term  of  office  (Cons.,  Art.  XII.  sec.  3).  Non-dissenting  directors 
are  liable  to  the  corporation  and  to  the  creditors  to  the  full  amount  of  the  capital 
stock  withdrawn  as  dividends  when  there  are  no  surplus  profits  (C.  C,  sec.  309  ; 
Laws  of  1905,  chap.  416).  They  are  also  jointly  and  severally  liable  where  they 
create  debts  beyond  the  subscribed'  capital  stock  (C.  C,  sec.  309).  They  are 
also  liable  for  the  withdrawal  of  capital  stock  or  the  increase  or  decrease  thereof, 
except  when  made  in  accordance  with  the  statute  in  such  case  made  and  pro- 
vided (C.  C,  sec.  309).  Finally,  directors  are  made  liable  for  making  false 
reports  relative  to  corporate  matters  (Laws  of  1905,  chap.  522).  Directors  in 
mining  corporations  are  liable  for  failure  to  have  the  reports  and  accounts  cur- 
rent made  and  posted  as  required  by  law  (C.  C,  sec.  590 ;  see  also  Penal  Code, 
sees.  560,  563,  564,  568-572). 

Fox  v  Company,  108  Cal.  478;  41  Pac.  328;  A.  S.  Mining  Co.  v.  Company,  78  Cal.  629; 
21  Pac.  373;  Martin  v.  Zellerbach,  38  Cal.  300;  E.  W.  &  Mining  Co.  v.  Pierce,  90  Cal.  131; 
27  Pac.  44;    Shattuck  v.  Company,  58  Cal.  550;    Irvine  v.  McKeon,  23  Cal.  472. 

13.  Stockholders'  Liabilities,  a.  Individual  Liability.  —  Every  stock- 
holder is  individually  liable  for  such  proportion  of  the  corporation's  debts  and 
liabilities  contracted  or  incurred  during  the  time  he  was  a  stockholder,  as  the 
amount  of  stock  owned  by  him  bears  to  the  whole  of  the  subscribed  capital 
stock  of  the  corporation.  The  liability  of  each  stockholder  is  determined  by 
the  amount  of  stock  owned  by  him  at  the  time  the  debt  or  liability  was  incurred, 
and  such  liability  is  not  released  by  subsequent  transfer  of  stock  (Cons.,  Art.  XII. 
sec.  3 ;  C.  C,  sec.  322 ;  Laws  of  1905,  chap.  339).  Stockholders  are  also  liable 
for  the  amount  of  their  unpaid-stock  subscriptions. 

Harmon  v.  Page,  62  Cal.  448;  Baines  v.  Babcock,  95  Cal.  581;  27  Pac.  674;  Vermont 
Marble  Co.  v.  Company,  135  Cal.  579;  67  Pac.  1057;  Bank  v.  Company,  103  Cal.  594;  37 
Pac.  499. 

b.  Stock  Assessments.  —  Assessments  are  levied  in  the  first  instance  by  the 
board  of  directors  after  one-fourth  of  the  capital  stock  has  been  subscribed. 
The  amount  of  the  assessment  is  limited  except  in  the  case  hereafter  referred 
to,  so  that  no  one  assessment  shall  exceed  ten  per  cent  of  the  amount  of  the 
authorized  capital  stock.  The  exception  is  where  the  whole  capital  stock  has 
not  been  paid  up  and  the  corporation  is  unable  to  meet  its  liabilities  or  to  satisfy 
the  claims  of  creditors.  The  assessment  must  be  levied  according  to  statute, 
and  must  be  made  payable  not  less  than  thirty  nor  more  than  sixty  days  from 
the  time  of  making  the  order  leaving  the  assessment.  The  day  to  be  fixed  for 
the  sale  of  delinquent  stock  shall  be  not  less  than  fifteen  nor  more  than  sixty 
days  from  the  day  the  stock  is  declared  delinquent.  In  addition  to  the  penalty 
provided  for  forfeiture  of  stock  for  failure  to  pay  assessments,  a  corporation  may 
recover  the  amount  of  such  instalment  directly  against  the  stockholder  by  proper 
action  brought  for  that  purpose  (C.  C,  sees.  331-349).  The  Supreme  Court  of 
California  has  held  that  the  directors  of  any  domestic  corporation  may  levy  and 
collect  assessments  for  corporate  purposes  on  shares  of  stock  upon  which  all 
subscriptions  have  been  fully  paid. 

R  R.  Co.  v.  Spreckles,  65  Cal.  193;  3  Pac.  661,  802;  Younglove  v.  Steinman,  80  Cal.  375; 
22  Pac.  189;  Company  v.  Herberger,  82  Cal.  603;  23  Pac.  134;  Water  Co.  v.  Superior  Court, 
92  Cal.  50;  28  Pac.  54;  Green  v.  Medical  Co.,  96  Cal.  322;  31  Pac.  100;  see  also  Cons.,  Art.  XII. 
sec  3;  Visalia,  etc.  Co.  v.  Hyde,  110  Cal.  632;  43  Pac.  10;  U.  S.  Bank  v.  Leiter,  145  Cal.  696; 
79  Pac.  441. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  the  president  and  secretary  (C.  C,  sec.  323). 
The  corporation  may  provide  in  its  by-laws  for  issuing  certificates  prior  to  full 

246 


DIGEST    OF    INCORPORATION    ACTS.  —  CALIFORNIA. 

payment,  but  any  certificate  issued  prior  to  full  payment  must  show  on  its  face 
what  amount  has  been  paid  thereon.  The  par  value  of  stock  certificates  may 
be  any  amount  (C.  C,  sees.  290,  587 ;  Laws  of  1901,  chap.  147  ;  Laws  of  1905, 
chaps.  339  and  391 ;  Laws  of  1907,  chap.  279).  Certificates  of  stock  issued  by 
corporations  issuing  stocks  of  different  classes  shall  express  upon  their  face  the 
character  of  stock  represented  by  such  certificates.  The  latter  must  also  state 
the  number  of  shares  of  stock  of  each  class  issued  and  shall  also  contain  a  state- 
ment of  the  nature  and  extent  of  the  preferences  granted  to  the  preferred  stock 
(Laws  of  1907,  chap.  279 ;  see  also  Laws  of  1907,  chap.  470). 
Williams  v.  Company,  (Cal.)  78  Pac.  28. 

15.  Preferred  Stock.  —  Preferred  stock  is  expressly  authorized  by  Laws 
of  1907,  chap.  278.     (See  ante,  sec.  3,  sub.  f.) 

16.  Payment  of  Capital  Stock.  —  Under  the  constitution  no  corporation 

can  issue  stock  except  for  money  paid,  or  labor  done,  or  property  actually 

received  (Cons.,  Art.  XII.  sec.  11 ;  C.  C,  sec.  359,  as  amended  by  Laws  of  1903, 

chap.  253 ;  Laws  of  1907,  chap.  280). 

Ewing  v.  Company,  56  Cal.  649;  Stein  v.  Howard,  65  Cal.  616;  4  Pac.  662;  Martin  v. 
Zellerbach,  38  Cal.  309;  Jefferson  v.  Hewitt,  103  Cal.  624;  37  Pac.  638;  Kellerman  v.  Mater, 
116  Cal  416;  48  Pac.  377;  Garretson  v.  Company  (Cal.),  79  Pac.  838;  Green  v.  The  Com- 
pany, 96  Cal.  322. 

17.  Books.  — The  book  of  by-laws  and  stock  books  must  be  kept  at  the 
principal  office  of  the  company  within  the  State,  and  are  subject  to  inspection 
thereof  by  any  stockholder.  The  stock  and  transfer  books  are  open  to  inspec- 
tion of  creditors  as  well  as  stockholders  (C.  C,  sees.  304,  377-378,  588;  and 
Cons.,  Art.  XII.  sec.  14). 

18.  Office.  —  The  corporation  must  maintain  an  office  within  the  State 
(Cons.,  Art.  XII.  sec.  14). 

19.  Reports.  —  No  reports  are  required  to  be  published.  Directors  in 
mining  corporations  are  required  to  make  monthly  reports  to  the  stockholders, 
verified  by  the  president  and  secretary  (C.  C,  sec.  588). 

20.  Anti-Trust  Statute.  —  Corporations  cannot  combine  or  agree  to  any 
act  to  prevent  any  person  from  buying  five-stock  in  the  State,  or  having  it  for 
sale  or  selling  it  on  commission  (Session  Laws  of  1893,  chap.  30).  Discrimina- 
tion in  rates  and  combination  among  transportation  companies  are  prohibited 
by  the  Constitution  (Art.  XII,  sees.  20,  21). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  If  a  corporation 
does  not  organize  and  commence  the  transaction  of  its  business  or  the  construc- 
tion of  its  works  within  one  year  from  the  date  of  its  incorporation,  or  if  after 
organization  and  commencement  of  business  it  loses  or  disposes  of  all  of  its 
property  and  for  a  period  of  two  years  fails  to  elect  officers  and  transact  in  a 
regular  way  its  business,  its  corporate  powers  shall  cease,  and  the  corporation 
may  be  dissolved  by  proper  action  brought  by  the  State  for  that  purpose  (C.  C, 
sec.  358;  C.  C,  Pro.,  sees.  802-810;  Laws  of  1901,  chap.  20G).  Charters  may 
be  forfeited  for  failure  to  pay  the  annual  license  tax  as  provided  by  Laws  of  1906, 
chap.  19;  Laws  of  1907,  chaps.  347  and  t03;  Laws  of  L911,  chap.  .".7:;. 

People  v.  Stanford,  77  Cal.  360;  18  Pac.  85;  People  v.  Dashaway  Aaa'n.  si  Cal.  lit;  24 
Pac  277-  San  Pedro  v.  K.  R.  Co.,  101  Cal.  333;  35  Pac.  993;  People  v.  Water  Co.,  9t  (  al. 
276;  32  Pac.  236;   L.  H.  liank  v.  Spires,  120  Cal.  511 ;   5s  Pac.  1049. 

22.  Amendments.  — The  power  of  amendmenl  in  California  is  broad  and 
is  also  somewhat  complicated.  The  name  of  the  corporation  can  be  changed 
only  by  application  to  the  Superior  Court.     The  corporation  must  file  a  certi 

247 


DIGEST    OF    INCORPORATION    ACTS.  —  CALIFORNIA. 

fied  copy  of  the  decree  of  the  court  changing  the  corporate  name  in  the  office 
of  the  Secretary  of  State,  and  in  the  office  of  the  county  clerk  of  each  county 
in  which  the  original  articles  or  certified  copies  thereof  are  required  to  be  filed 
within  thirty  days  from  the  date  of  such  decree  (Code  of  Civ.  Proc,  sees.  1276, 
1277,  1279;  Laws  of  1905,  chaps.  45  and  103;  Laws  of  1907,  chap.  275;  Laws 
of  1909,  chap.  639).  Articles  may  be  amended  for  any  purpose  except  as  stated 
below,  by  the  majority  vote  of  the  directors  and  by  the  vote  or  written  assent 
of  stockholders  representing  two-thirds  of  the  subscribed  capital  stock  of  the 
corporation,  or  the  written  assent  of  the  majority  of  the  members  if  there  is  no 
capital  stock ;  a  copy  of  the  articles  as  amended,  duly  certified  to  be  correct  by 
the  president  and  secretary  of  the  board  of  directors,  shall  be  filed  in  the  office 
where  the  original  articles  are  filed  and  a  certified  copy  thereof  duly  certified 
by  such  county  clerk,  in  the  office  of  the  Secretary  of  State.  Amended  articles, 
duly  certified  as  aforesaid,  must  be  filed  in  the  office  of  the  county  clerk  of  every 
county  in  which  said  corporation  has  or  holds  property  except  only  in  the  county 
in  which  the  original  amended  articles  of  incorporation  have  been  filed.  Failure 
to  so  file  subjects  the  corporation  to  the  penalties  and  liabilities  provided  in  sec. 
299  of  the  Civil  Code.  If  the  assent  of  two-thirds  of  the  stockholders  to  such 
amendment  has  not  been  obtained,  a  notice  of  the  intention  to  make  such 
amendment  must  be  advertised  for  thirty  days  in  some  newspaper  published 
in  the  locality  in  which  the  principal  place  of  business  of  the  corporation  is 
located  before  the  filing  of  the  proposed  amendment  (Laws  of  1907,  chap.  278). 
The  capital  stock  of  a  corporation  may  be  increased  or  diminished  at  a 
meeting  of  the  stockholders  by  a  two-thirds  vote  of  the  subscribed  or  issued 
capital  stock.  When  such  action  is  taken  at  a  meeting  of  the  stockholders,  the 
same  must  be  called  by  the  board  of  directors  and  notice  must  be  given  by  pub- 
lication in  a  newspaper  published  in  the  county  where  the  principal  place  of 
business  of  the  corporation  is  located ;  provided,  however,  where  the  articles 
of  incorporation  provide  for  two  or  more  kinds  of  capital  stock,  no  increase  or 
reduction  shall  be  made  without  the  consent  of  two-thirds  of  all  the  subscribed 
stock,  and  in  making  such  increase  or  reduction  the  assent  shall  identify  the 
particular  class  or  classes  of  stock  to  be  increased  or  reduced  and  the  amounts 
apportioned  to  each.  The  notice  must  specify  the  object  of  the  meeting  and 
the  amount  to  which  it  is  proposed  to  increase  or  diminish  the  capital  stock 
and  the  time  and  place  of  holding  the  meeting,  which  latter  must  be  at  the 
principal  place  of  business  of  the  corporation,  and  at  the  building  where  the 
board  of  directors  usually  meet.  The  notice  of  the  meeting  must  be  published 
once  a  week  for  at  least  sixty  days.  In  addition  to  the  notice  by  publication, 
the  secretary  of  the  corporation  must  address  a  notice  to  each  of  the  stock- 
holders whose  names  appear  on  the  company's  books,  at  his  place  of  residence, 
if  known,  and  if  not,  then  at  the  place  at  which  the  principal  place  of  business 
of  the  corporation  is  situated,  which  notice  shall  be  so  mailed  to  said  stock- 
holders at  least  thirty  days  before  the  date  appointed  for  such  meeting.  In 
lieu  of  such  call  for  a  meeting  of  stockholders  and  of  such  notice  and  publica- 
tion of  the  same,  and  of  a  stockholders'  meeting  held  in  pursuance  thereof,  and 
of  said  vote  thereat,  representing  two-thirds  of  the  subscribed  capital  stock, 
any  corporation  may  diminish  its  capital  stock  and  also  originally  create  its 
bonded  indebtedness  by  a  resolution  adopted  by  the  unanimous  vote  of  its 
board  of  directors  or  trustees  at  a  regular  or  at  a  special  meeting  called  for  that 
purpose,  and  approved  by  the  written  assent  or  assents  of  the  stockholders 
holding  two-thirds  of  the  subscribed  or  issued  capital  stock,  which  assent  or 

248 


DIGEST    OF    INCORPORATION    ACTS.  —  CALIFORNIA. 

assents  must  be  filed  with  the  secretary  of  the  corporation;  or  the  secretary 
of  the  corporation  must  address  by  mail,  postage  fully  prepaid,  a  copy  of 
such  resolution  to  each  of  the  stockholders  whose  names  appear  upon  the 
company's  books  as  sufficiently  addressed  or  identified,  at  his  place  of  resi- 
dence if  known,  and  if  not  known,  then  at  the  place  in  which  the  principal 
place  of  business  of  the  corporation  is  situated,  which  notice  shall  be  so  mailed 
to  such  stockholders  at  least  thirty  days  before  the  certificate  hereinafter 
provided  for  is  made  and  signed  or  filed,  as  hereinafter  provided,  and  within 
that  time  any  stockholder  may  file  with  such  secretary  his  dissent  in  writing ; 
and  it  is  further  provided  that  if  at  any  time  within  said  thirty  days  such  writ- 
ten assent  or  assents  of  the  stockholders  holding  all  of  the  subscribed  or 
issued  capital  stock  be  so  filed  with  the  secretary,  then  and  at  once  and  without 
further  delay  a  certificate  hereinafter  provided  for  may  be  so  made,  signed  and 
filed  as  hereinafter  provided  and  with  the  same  effect,  but  such  capital  stock 
cannot  be  diminished  to  an  amount  less  than  the  indebtedness  of  the  corpo- 
ration, and  no  increase  of  capital  stock  or  bonded  indebtedness  of  the  corpora- 
tion can  be  made  except  at  a  meeting  of  the  stockholders  as  in  this  section 
provided. 

Upon  such  increase  or  diminution  of  the  capital  stock  or  creation  or  increase 
of  the  bonded  indebtedness  being  made  in  accordance  with  the  provisions  of 
this  section,  there  shall  be  made  a  certificate  under  the  corporate  seal  and  signed 
by  the  president  and  secretary  of  the  corporation,  or  of  each  corporation  acting 
in  the  premises,  and  a  majority  of  the  directors  or  trustees  of  such  corpora- 
tion, or  each  corporation  so  acting,  showing  compliance  by  such  corporation,  or 
each  corporation  so  acting  with  the  requirements  of  said  laws  named  in  said 
subdivisions,  and  the  amount  to  which  the  capital  stock  has  been  increased 
or  diminished,  or  the  amount  of  the  bonded  indebtedness  created,  or  to  which 
the  bonded  indebtedness  may  have  been  increased,  and  the  amount  of  stock 
represented  at  the  meeting,  and  the  total  vote  in  the  affirmative  by  which  the 
same  was  accomplished,  and  the  total  vote  in  the  negative ;  or,  if  such  pro- 
ceedings be  had  and  taken  under  subdivision  five  of  this  section  as  to  dim- 
inution of  capital  stock  or  the  original  creation  of  bonded  indebtedness  a 
like  certificate  shall  be  made  and  sealed  and  signed  as  aforesaid,  showing  the 
compliance  by  such  corporation  or  by  each  corporation  acting  in  the  premises 
with  the  requirements  of  said  subdivision  fifth  and  the  amount  to  which  the 
capital  stock  has  been  diminished,  or  the  amount  of  bonded  indebtedness  so 
originally  created  and  the  total  amount  of  the  stock  represented  by  the  said 
written  assent  or  assents  so  filed  with  the  secretary  and  the  total  amount  of 
stock  represented  by  the  said  written  dissent  or  dissents  so  filed. 

In  case  of  a  consolidated  bonded  indebtedness,  each  corporation  which  is 
a  party  thereto,  shall  cause  to  be  made,  signed,  sealed  and  verified  and  filed  as 
in  this  section  provided,  a  separate  certificate. 

In  all  cases  the  certificates  shall  state  the  total  number  of  subscribed  or 
issued  shares  of  the  capital  stock  of  the  corporation  or  of  each  corporation  re- 
spectively acting  in  the  premises,  and  shall  be  verified  by  the  oath  of  the  said 
president,  secretary  or  of  the  said  respective  presidents  and  secretaries.  Said 
consolidated  bonded  indebtedness  may  be  created  or  increased  to  an  amount 
equal  to  the  par  or  face  value  of  the  aggregate  amount  of  the  subscribed  or 
issued  capital  stock  of  said  two  or  more  corporations  and  shall  not.  exceed  such 
aggregate  amount.  In  each  and  every  case  the  certificate  must  be  filed  in  the 
office  of  the  clerk  of  the  county  or  the  city  or  county  where  the  original  articles 

249 


DIGEST    OF    INCORPORATION    ACTS.  —  CALIFORNIA. 

•of  incorporation  of  the  corporation  or  corporations  acting  hereunder  are  filed 
and  a  certified  copy  thereof  certified  by  such  clerk  shall  be  filed  in  the  office  of 
the  Secretary  of  State;  and  thereupon  the  capital  stock  shall  be  so  increased 
or  diminished,  or  the  bonded  indebtedness  or  consolidated  bonded  indebtedness 
shall  be  decreased  or  increased  accordingly,  and  said  certificate  or  certificates 
so  filed  shall  be,  when  such  certified  copy  or  copies  are  so  filed,  conclusive  proof 
of  such  increase  or  diminution  of  capital  stock  or  such  creation  or  increase  of 
original  or  consolidated  bonded  indebtedness  and  the  validity  of  each  thereof. 
When  the  by-laws  of  a  corporation  prescribe  the  paper  in  which  the  notices  of 
meetings  of  directors  or  trustees  or  stockholders  are  to  be  published,  notice  of 
publication  herein  provided  for  shall  be  published  in  such  paper  unless  publica- 
tion thereof  shall  have  ceased  (Laws  of  1907,  chap.  280). 

The  place  of  business  may  be  changed,  if  desired,  by  amendment  (C.  C, 
sec.  321  a).  If  articles  are  filed  in  the  wrong  county  in  the  first  instance,  the 
Code  provides  a  means  of  remedying  this.  (See  sec.  363.)  The  number  of 
directors  may  be  changed  by  a  majority  vote  of  the  stockholders,  whereupon 
a  certificate  must  be  filed  relative  to  such  change,  in  the  same  manner  as  in 
the  case  of  original  articles  (Laws  of  1905,  chap.  392). 

Application  of  La  SocieHe",  etc.,  123  Cal.  525;  56  Pac.  458. 

23.  Annual  License  Tax.  —  No  corporation  heretofore  or  hereafter  incor- 
porated under  the  laws  of  this  State,  or  of  any  other  State  shall  do  or  attempt 
to  do  business  by  virtue  of  its  charter  or  certificate  of  incorporation  in  this 
State  without  a  State  license  therefor  (Laws  of  1906,  chap.  19). 

It  shall  be  the  duty  of  every  corporation  incorporated  under  the  laws  of 
this  State,  and  of  every  foreign  corporation  now  doing  business,  or  which  shall 
hereafter  engage  in  business  in  this  State,  to  procure  annually  from  the  Sec- 
retary of  State,  a  license  authorizing  the  transaction  of  such  business  in  this 
State,  and  shall  pay  therefor  a  license  tax  as  follows: 

When  the  authorized  capital  stock  of  the  corporation  does  not  exceed  $10,000, 
the  tax  shall  be  $10;  when  the  authorized  capital  stock  exceeds  $10,000,  but 
does  not  exceed  $20,000,  the  tax  shall  be  $15 ;  when  the  authorized  capital 
stock  exceeds  $20,000,  but  does  not  exceed  $50,000,  the  tax  shall  be  $20 ;  when 
the  authorized  capital  stock  exceeds  $50,000,  but  does  not  exceed  $100,000,  the 
tax  shall  be  $25 ;  when  the  authorized  capital  stock  exceeds  $100,000,  but  does 
not  exceed  $250,000,  the  tax  shall  be  $50 ;  when  the  authorized  capital  stock 
exceeds  $250,000,  but  does  not  exceed  $500,000,  the  tax  shall  be  $75 ;  when 
the  authorized  capital  stock  exceeds  $500,000,  but  does  not  exceed  $2,000,000, 
the  tax  shall  be  $100;  when  the  authorized  capital  stock  exceeds  $2,000,000, 
but  does  not  exceed  $5,000,000,  the  tax  shall  be  $200;  when  the  authorized 
capital  stock  exceeds  $5,000,000,  the  tax  shall  be  $250.  Said  license  tax  or  fee 
shall  be  due  and  payable  on  the  1st  day  of  July  of  each  and  every  year  to  the 
Secretary  of  State,  who  shall  pay  the  same  into  the  State  Treasury.  If  not 
paid  on  or  before  the  hour  of  four  o'clock  p.  m.,  of  the  1st  day  of  September 
next  thereafter,  the  same  shall  become  delinquent  and  there  shall  be  added 
thereto,  as  a  penalty  for  such  delinquency  the  sum  of  $10.  The  license  tax  or 
fee  hereby  provided  authorizes  the  corporation  to  transact  its  business  during 
the  year  or  for  any  fractional  part  of  such  year  in  which  such  license  tax  or  fee 
is  paid.  "Year"  within  the  meaning  of  this  act  means  from  and  including  the 
1st  day  of  July  to  and  including  the  30th  day  of  June  next  thereafter  (Laws 
of  1907,  chap.  347,  as  amended  by  Laws  of  1909,  chap.  299). 

250 


DIGEST    OF    INCORPORATION    ACTS.  —  CALIFORNIA. 

The  Secretary  of  State  shall,  on  or  before  the  loth  day  of  September  of 
each  year,  report  to  the  governor  of  the  State  a  li^t  of  all  corporations  which 
have  become  delinquent  as  provided  in  sec.  2  of  this  act,  and  the  governor  shall 
forthwith  issue  his  proclamation  declaring  under  this  act,  that  the  charters  of 
such  delinquent  corporations  will  be  forfeited  unless  payment  of  said  lio 
tax  together  with  the  penalty  for  such  delinquency,  as  hereinbefore  provided, 
be  made  to  the  Secretary  of  State  on  or  before  the  hour  of  four  o'clock  i».  M., 
of  the  30th  day  of  November  next  following  (Laws  of  1906.  chap.  19j.  Said 
proclamation  shall  be  filed  immediately  in  the  office  of  the  Secretary  of  State. 
and  said  Secretary  of  State  shall  immediately  cause  a  copy  of  said  proclama- 
tion to  be  published  in  one  issue  of  two  daily  newspapers  to  be  selected  by  the 
governor  (Laws  of  1906,  chap.  19). 

At  the  hour  of  four  o'clock  p.  m.,  of  the  30th  day  of  November  each  year, 
the  charters  of  all  delinquent  domestic  corporations  which  have  failed  to 
said  license  tax  together  with  said  penalty  for  such  delinquency  shall  be  for- 
feited to  the  State  of  California  and  the  right  of  all  delinquent  foreign  corpo- 
rations to  do  business  in  this  State,  which  have  failed  to  pay  said  license  tax, 
together  with  the  penalty  for  such  delinquency  shall  be  likewise  forfeited  (Laws 
of  1906,  chap.  19;  see  also  Laws  of  1907,  chap.  403;  Laws  of  1911,  chap.  .573). 

At  the  time  of  filing  a  certified  copy  of  articles  of  incorporation  of  any  cor- 
poration when  filed  on  or  between  the  1st  day  of  July  and  the  30th  day  of 
September  in  any  year,  there  shall  be  paid  to  the  Secretary  of  State  the  full 
amount  of  the  license  tax  provided  to  be  paid  as  stated  above;  when  filed 
on  or  between  the  1st  day  of  October  and  the  31st  day  of  December  in  any 
year,  a  sum  equal  to  three-fourths  of  the  license  tax  provided  to  be  paid 
stated  above;  when  filed  on  or  between  the  1st  day  of  January  and  the  31s1 
day  of  March  in  any  year,  a  sum  equal  to  one-half  of  such  license  tax  as 
stated  above  shall  be  paid;  when  filed  on  or  between  the  1st  day  of  April  and 
the  30th  day  of  June  in  any  year,  a  sum  equal  to  one-fourth  of  the  license  as 
stated  above  shall  be  paid.  Upon  receipt  of  such  full  or  fractional  lie 
tax  the  Secretary  of  State  shall  issue  a  license  receipt  for  the  full  or  for  tin- 
fractional  part  of  the  then  current  fiscal  year  (Laws  of  1909,  chap.  299). 

24.  Extension  of  Corporate  Existence.  —  Every  corporation  may  at 
any  time  prior  to  the  expiration  of  the  term  of  its  corporate  existence,  extend 
such  term  to  a  period  not  exceeding  fifty  years  from  the  date  of  such  extension. 
An  extension  must  be  voted  for  at  a  meeting  of  the  stockholders,  called  by  the 
directors  expressly  for  that  purpose,  and  two-thirds  of  the  stockholders  must 
vote  in  favor  thereof.  Or,  in  lieu  of  a  meeting,  it  may  be  made  upon  the  written 
assent  of  stockholders  representing  two-thirds  of  the  capital  stock.  The  cer- 
tificate of  such  vote  or  assent  shall  be  signed  and  sworn  to  by  the  secretary  or 
treasurer  and  by  a  majority  of  the  directors  of  the  corporation  and  filed  in  the 
office  of  the  county  clerk  where  the  original  articles  of  incorporation  were  filed, 
and  a  copy,  certified  by  said  clerk  shall  be  filed  in  the  office  of  the  Secretary  of 
State  (C.  C,  sec.  4010,  as  amended  by  Laws  of  1907,  chap.  274). 

25.  Dissolution.  —  The  dissolution  of  a  corporation  is  effected  by  a  decree 
of  the  Superior  Court  of  the  county  where  the  principal  place  of  business  of  the 
corporation  is  situated,  upon  action  previously  had  at  a  meeting  of  the  stock- 
holders called  for  that  purpose,  whereat  the  dissolution  of  the  corporation  was 
resolved  by  a  vote  of  two-thirds  of  the  holders  of  the  subscribed  capital  Btock. 
The  application  must  also  show  that  all  claims  and  demands  against  the  cor- 
poration have  been  satisfied  and  discharged.      Upon  filing  of  the  application 

251 


DIGEST    OF   INCORPORATION   ACTS.  —  CALIFORNIA. 

the  clerk  must  give  notice  of  the  same  for  such  time  as  the  court  may  order, 
and  not  less  than  thirty,  nor  more  than  fifty  days,  by  publication  in  some  news- 
paper published  in  the  county  where  the  corporation  has  its  principal  place  of 
business.  The  application  for  dissolution  must  be  signed  by  a  majority  of  the 
board  of  directors  or  other  officers  having  the  management  of  the  affairs  of  the 
corporation  (Code  of  Civ.  Proc,  sees.  1227-1234;  Laws  of  1905,  chaps.  348,  416; 
Laws  of  1907,  chap.  254). 

After  the  time  of  publication  has  expired  the  court  may,  upon  five  days' 
notice  to  the  persons  who  have  filed  objections,  or  without  further  notice  if  no 
objections  have  been  filed,  proceed  to  hear  and  determine  the  application,  and 
if  all  the  statements  therein  made  are  shown  to  be  true,  must  declare  the  cor- 
poration dissolved.  A  certified  copy  of  the  decree  and  order  of  the  court  dis- 
solving the  corporation  must  be  filed  in  the  office  of  the  Secretary  of  State 
(Laws  of  1907,  chap.  401).  (As  to  involuntary  dissolution,  see  Code  of  Civ. 
Proc,  sec.  812,  etc.) 

26.  Foreign  Corporations.  —  Foreign  corporations  must  at  the  time  they 
file  application  for  a  permit  to  do  business  within  the  State  file  in  the  office 
of  the  Secretary  of  State  a  designation  of  some  person  residing  within  the  State 
upon  whom  service  of  process  may  be  made.  Unless  such  designation  is  made 
the  right  to  maintain  or  defend  actions  in  the  courts  is  denied  to  the  corporation. 
The  corporation  must  also  file  in  the  office  of  the  Secretary  of  State  a  certified 
copy  of  its  articles  of  incorporation  or  of  the  statute  or  governmental  act  creat- 
ing it,  and  a  certified  copy  thereof  duly  certified  by  the  Secretary  of  State  of 
California  must  likewise  be  filed  in  the  office  of  the  county  clerk  of  the  county 
where  its  principal  place  of  business  is  located  and  also  where  such  corpora- 
tion owns  property.  For  filing  such  certified  copy  in  the  office  of  the  Secretary 
of  State  the  same  fees  must  be  paid  as  are  paid  by  domestic  corporations  of 
like  capitalization  upon  organization.  Failure  to  comply  with  the  law  subjects 
the  corporation  to  heavy  penalties  (Laws  of  1905,  chap.  471 ;  Laws  of  1907, 
chap.  283).  Foreign  corporations  are  also  subject  to  the  payment  of  the  same 
annual  license  tax  as  domestic  corporations  (Laws  of  1906,  chap.  19 ;  Laws  of 
1907,  chap.  347;  Laws  of  1909,  chap.  299).  Stockholders  in  foreign  corpora- 
tions doing  business  in  the  State  are  liable  to  the  same  extent  as  stockholders  in 
domestic  corporations  (Laws  of  1905,  chap.  3S6).  The  fee  for  filing  notice  of 
appointment  of  agent  is  $5  (Laws  of  1905,  chap.  467).  The  filing  and  record- 
ing fees  are  otherwise  the  same  as  are  imposed  upon  domestic  corporations. 
The  right  to  cumulate  votes  in  the  election  of  directors  is  made  applicable  to 
foreign  corporations  (Laws  of  1903,  chap.  215).  See  as  to  penalty  for  failure 
on  the  part  of  foreign  corporations  to  file  certified  copies  of  articles  (Laws  of 
1911,  chap.  541). 

Thomas  v.  Company,  65  Cal.  600;  4  Pac.  641;  Pinney  v.  Nelson,  183  U.  S.  144;  22  Sup. 
Ct.  52. 


252 


DIGEST    OF    INCORPORATION    ACTS.  —  COLORADO. 


COLORADO. 

(The  references  cited  below  are  to  Mills'  Annotated  Statutes,  1905  Edition,  unless  otherwise 
stated.) 

1.  Character  of  the  Law  under  which  Business  Corporations  may 
incorporate.  —  The  Business  Corporation  Act  of  Colorado  is  found  in  Mills' 
Annotated  Statutes  of  Colorado,  sees.  472  et  seq.  Special  acts  arc  provided  for 
the  incorporation  of  railways,  banks,  trust  companies,  deposit,  surety,  title, 
guaranty,  insurance,  toll  road,  ditch,  bridge  and  ferry,  telegraph,  telephone, 
gas,  and  electric  companies. 

2.  Incorporators.  —  Three  or  more.  There  are  no  residential  require- 
ments (Mills,  sec.  473). 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate  must 
set  forth : 

a.  Name.  —  The  name  must  commence  with  the  word  "the"  and  end  with 
the  word  "corporation,"  "company,"  "association,"  or  "society,"  and  must 
indicate  the  business  to  be  carried  on.  Similarity  of  names  is  forbidden  (Mills, 
sees.  472,  475,  625).  Upon  the  filing  in  the  office  of  the  Secretary  of  State  of  a 
certificate  by  three  or  more  persons  or  corporation,  stating  that  it  is  the  desire 
and  intention  of  such  persons  or  corporation  to  adopt  and  use  a  certain  name 
as  and  for  the  name  of  a  domestic  corporation  to  be  thereafter  incorporated  or 
organized,  it  shall  be  the  duty  of  the  Secretary  of  State  to  reserve  such  name 
for  the  use  and  benefit  of  the  persons  or  corporation  filing  such  certificate  for  the 
period  of  sixty  days  from  the  date  of  filing  the  same;  and  the  Secretary  of  State 
shall  not  file  or  permit  to  be  filed  in  his  office  within  said  period  any  articles 
of  incorporation  or  any  other  papers,  by  any  other  person,  persons,  or  corpora- 
tions by  which  such  name  is  sought  to  be  used  or  adopted  as  (lie  name  of  a 
domestic  corporation;  provided,  however,  that  such  name  is  not  already  used, 
adopted  or  prepared  by  some  other  person,  persons,  or  domestic  corporation 
(Laws  of  1911,  chap.  104,  sec.  1). 

b.  Purposes.  —  The  statute  clearly  contemplates  that  corporations  may  be 
organized  for  any  number  of  purposes  not  covered  by  the  special  acts.  It  should 
be  remembered  in  this  connection  that  this  clause  cannot  be  changed  by  amend- 
ment after  incorporation  (sec.  477). 

c.  Capital  Stock. — The  amount  of  the  capital  stock.  This  may  be  any 
amount.  In  the  case  of  a  mining  company  the  article  should  state  whether 
the  stock  is  non-assessable  or  assessable  (Mills,  sec.  581). 

d.  Duration.  —  Must  not  exceed  twenty  years. 

e.  Number  and  Par  Value  of  Shares.  —  The  par  value  of  shares  must  not  be 
less  than  $1  nor  more  than  $100. 

/.  Directors.  —  The  number  of  directors  must  not  be  less  than  three  nor 
more  than  thirteen.  In  the  case  of  mining  companies  and  banks  the  number 
must  not  exceed  nine  (sees.  512,  585). 

g.  Names  of  First  Board  of  Directors.  —  This  board,  under  the  statute,  lias 
control  of  the  affairs  of  the  company  for  the  first  year  of  its  existence 

h.  Domiciliary  Office. — The  name  of  the  town  and  county  in  which  the 
principal  office  of  the  company  shall  be  kept. 

i.  Place  for  the  Transaction  of  Business.  \aine  of  the  county  or  counties 
in  which  the  principal  business  shall  hi'  carried  on.      \\  hen   the  corporation   is 

253 


DIGEST    OF    INCORPORATION    ACTS.  —  COLORADO. 

to  carry  on  part  of  its  business  without  the  State,  the  certificate  must  state 
that  fact,  and  also  state  the  name  of  the  town  and  county  in  Colorado  in  which 
the  principal  office  shall  be  kept,  and  also  state  the  names  of  the  counties  in 
which  the  principal  business  of  the  corporation  is  to  be  carried  on  within  the 
State. 

j.  By-Laws.  —  To  directors  may  be  delegated  the  right  to  make  by-laws  if 
so  desired,  otherwise  the  stockholders  must  adopt  the  by-laws. 

k.  Directors'  Meetings.  —  If  it  is  desired  to  hold  directors'  meetings  without 
the  State,  this  right  should  be  reserved  in  the  certificate  (Mills,  sec.  473). 

Schroers  v.  Fisk,  10  Col.  599;  16  Pac.  285;  Duggan  v.  Company,  11  Col.  113;  17  Pac. 
105;  Humphreys  v.  Mooney,  5  Col.  293;  People  v.  Cheeseman,  7  Col.  376;  3  Pac.  716;  D.  & 
S.  Ry.  Co.  v.  D.  C.  Rv.  Co.,  2  Col.  673;  G.  R.  B.  Co.  v.  Rollins,  13  Col.  4;  21  Pac.  897;  Jones 
v.  Company,  21  Col.  263;    40  Pac.  457;    Tabor  v.  Bank,  62  Fed.  383. 

4.  Statutory  Powers.  —  The  main  statutory  powers  are  what  are  known 
as  the  common  law  powers  belonging  to  all  business  corporations  (Mills,  sec 
476).  Corporations  have,  however,  the  following  extraordinary  powers  in 
Colorado :  To  consolidate  with  another  corporation  when,  by  a  vote  of  at  least 
three-fourths  of  the  stock  of  each  company  severally  had,  the  proposition  shall 
be  approved.  The  method  of  consolidation  is  pointed  out  in  detail  in  the 
statute  (Mills,  sees.  625,  628).  The  statute  contains  one  express  limitation 
upon  the  powers  of  corporations,  which  may  be  enumerated  as  follows :  They 
are  forbidden  to  use  any  of  the  corporate  funds  for  the  purchase  of  their  own 
stock  except  such  as  may  be  forfeited  for  the  non-payment  of  assessments 
thereon  (Mills,  sec.  485).  Manufacturing  and  mining  companies  cannot  encum- 
ber their  plant  or  mines  or  machinery  without  the  vote  of  a  majority  of  the 
stockholders  (3  Mills,  sec.  481).  Cumulative  voting  for  directors  is  permitted 
(Laws  of  1905,  p.  150) ;  also  voting  by  proxy  (Laws  of  1S95,  pp.  150-152,  sec.  1; 
Laws  of  1891,  p.  93,  sec.  4;  see  also  Laws  of  1903,  p.  158). 

Jones  v.  Hardware  Co.,  21  Col.  263;  40  Pac.  457;  Spangler  v.  Butterfield,  6  Col.  356; 
Carpenter  v.  People,  8  Col.  116;  5  Pac.  828;  Mining  Co.  v.  Bank,  2  Col.  248;  City  of  Pueblo 
v.  Company,  28  Col.  524;    67  Pac.  162. 

5.  Procuring  the  Charter.  —  The  certificate  must  be  signed  and  acknowl- 
edged by  each  of  the  incorporators.  In  practice  it  is  well  to  execute  a  sufficient 
number  of  original  certificates  so  as  to  permit  the  filing  of  one  original  in  every 
county  where  the  business  of  the  corporation  is  to  be  carried  on,  as  well  as 
in  the  office  of  the  Secretary  of  State.  As  soon  as  the  certificate  has  been  filed 
in  the  office  of  the  recorder  of  deeds  in  each  of  the  counties  in  which  the  principal 
place  of  business  shall  be  carried  on,  as  well  as  in  the  office  of  the  Secretary  of 
State,  the  corporate  existence  commences  (sees.  473-475).  The  Secretary  of 
State  issues  a  certificate  of  authority  to  transact  business  as  a  corporation  within 
the  State.  The  president  and  a  majority  of  the  directors,  after  the  last  instal- 
ment of  stock  is  paid  in,  must  make  a  certificate  stating  the  amount  of  the 
capital  so  fixed  and  paid  in,  which  certificate  shall  be  signed  and  sworn  to  by 
the  president  and  a  majority  of  the  directors  and  must  be  recorded  in  the  same 
offices  where  the  certificate  of  incorporation  is  recorded  (Mills,  sees.  487,  491). 
There  is  no  penalty  by  law  for  failure  to  file  the  certificate  of  full  paid  stock. 

Austin  v.  Berlin,  13  Col.  198;  22  Pac.  433;  Cook  v.  Merritt,  15  Col.  212;  25  Pac.  176; 
Matthews  v.  Patterson,  16  Col.  215;  26  Pac.  812;  F.  M.  &  Co.  v.  MacLeod,  8  Col.  App.  190; 
45  Pac.  282. 

6.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon  the 
amount  of  indebtedness  which  a  corporation  may  incur. 

7.  Organization  Fee.  —  There  must  be  paid  to  the  Secretary  of  State  $20 
for  filing  the  certificate  of  incorporation  of  companies  with  a  capitalization  of 

254 


DIGEST    OF    INCORPORATION    ACTS.  —  COLORADO. 

not  more  than  $50,000,  and  for  every  thousand  dollars  in  excess  of  $50,000 
an  organization  tax  of  20  cents  per  thousand  is  exacted  (Laws  of  1901,  chap. 
52,  sec.  1). 

Jones  v.  Company,  21  Col.  263;  40  Pac.  457. 

8.  Filing  and  Recording  Fees. — There  are  no  fees  due  the  Secretary 
of  State  for  filing  articles  of  incorporation  other  than  payment  of  the  organiza- 
tion tax.  For  certified  copy  of  articles  of  incorporation,  15  cents  per  folio  of 
one  hundred  words,  and  SI  for  seal.  For  issuing  certificate  of  authority  showing 
that  all  fees  prescribed  by  law  have  been  paid,  $5;  for  filing  and  recording 
impression  of  the  corporate  seal,  $2.50;  for  filing  certificate  of  payment  of 
stock,  $2.50  and  upwards,  according  to  capitalization;  if  capitalization  exceeds 
$50,000,  the  fee  is  5  cents  per  $1,000  of  stock  in  excess  thereof.  Fee  for  filing 
annual  report,  $1  where  capitalization  is  $10,000  or  less  ;  where  it  exceeds 
that  amount  it  is  $5.  With  regard  to  fees  of  county  recorder,  wherein  articles 
of  incorporation  are  required  to  be  filed,  the  counties  are  graded  for  fee  pur- 
poses. The  fifing  fee  there  ranges  from  10  cents  to  25  cents.  If  the  articles  are 
recorded,  the  fee  ranges  from  50  cents  to  $2  (Laws  of  1901,  pp.  116-121,  sees. 
1-10  ;   Session  Laws  of  1907,  chap.  182). 

9.  Commencing  Business.  —  Corporations  may  begin  business  as  soon 
as  their  certificates  have  been  filed,  State  fees  paid,  and  certificate  of  payment 
thereof  issued  (Laws  of  1901,  chap.  52,  sec.  1). 

10.  Organization  Meeting. — The  incorporators  should  sign  a  written 
agreement  fixing  the  time  and  place  within  the  State  for  the  organization  of 
the  corporation.  The  incorporators  may  be  represented  by  proxy  if  desired. 
If  the  certificate  of  incorporation  does  not  bestow  upon  directors  the  right  to 
make  by-laws,  the  stockholders  should  adopt  by-laws  themselves.  Immedi- 
ately after  the  adjournment  of  the  stockholders'  organization  meeting  (if  any  is 
held),  the  board  of  directors  named  in  the  certificate  of  incorporation  should 
meet  and  elect  the  officers  of  the  corporation,  receive  and  act  upon  an  offer 
to  transfer  property  for  stock,  etc.,  and  adopt  by-laws.  The  statutory  officers 
are  a  president,  who  must  be  chosen  from  among  the  directors,  and  such  sub- 
ordinate officers  as  the  company  may  by  its  by-laws  designate. 

Humphreys  v.  Mooney,  5  Col.  283. 

11.  Meetings  of  Stockholders  and  Directors.  —  Meetings  of  the  stock- 
holders must  be  held  at  the  office  of  the  company  within  the  State.  Directors" 
meetings  may  be  held  without  the  State  only  by  making  provision  therefor 
in  the  certificate  of  incorporation  (Mills,  sees.  481,  493). 

Humphreys  v.  Mooney  .  5  Col.  283;  Jones  v.  Pearl  M.  Co.,  20-Col.  417;  38  Pac.  700;  Cook 
v.  Hager,  3  Col.  386;   Utlay  v.  Company,  4  Col.  371. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  not  be  less  than  three  nor  more  than  thirteen  directors,  all  of  whom 
must  be  stockholders.  In  case  of  mining  companies  and  banks  not  more  than 
nine  are  permitted.  There  are  no  residential  requirements  (Mills,  sec.  481  ;  set- 
also  Mills,  sec.  585;  Laws  of  1895,  pp.  150-152,  Bee.  \>.  Cumulative  voting  for 
directors  is  provided  for  by  statute  I  Laws  of  1905,  p.  150,  sec.  1). 

b.  Liabilities.  —  Assenting  directors  are  jointly  and  severally  liable  for  the 
declaration  and  payment  of  dividends  which  render  il  insolvent  or  which 
decrease  the  amount  of  its  capital  stock.  The  extent  of  the  liability  is  for 
all  debts  of  the  corporation  then  existing  and  for  all  thai  Bhall  thereafter  be 
contracted  while  the  capital  remains  so  diminished  (Mills,  sec.  192).    Thej  are 


DIGEST    OF    INCORPORATION    ACTS.  —  COLORADO. 

also  liable  for  failure  to  file  annual  reports  (Laws  of  1901  ;  3  Mills,  sec.  491  j). 
However,  as  the  failure  to  file  the  annual  report  fixes  directors  and  officers  with 
the  liability  for  debts  as  stated,  and  as  this  annual  report  must  be  filed  whether 
the  stock  has  been  fully  paid  and  certificate  to  that  effect  made  or  not,  it  would 
appear  that  the  failure  to  make  a  certificate  as  to  full  payment  of  stock  is  in 
itself  immaterial.  It  is  made  a  misdemeanor  for  directors  to  fail  to  properly 
keep,  and,  on  demand  of  parties  entitled  to  the  same  to  permit  inspection  of, 
corporate  books  (sec.  488  to  508). 

Nix  v.  Miller,  26  Col.  203;  57  Pac.  1034;  Austin  v.  Berlin,  13  Col.  198;  22  Pac.  433; 
Matthews  v.  Patterson,  16  Col.  215;  26  Pac.  812;  Larsen  v.  James,  1  Col.  App.  313;  29  Pac. 
183;  Gregory  v.  Bank,  3  Col.  322;  Col.  Fuel  Co.  v.  Lenhart,  6  Col.  App.  511;  41  Pac.  634; 
Cook  v.  Merritt,  15  Col.  212;  25  Pac.  176. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  corporate 
debts  to  the  extent  of  their  unpaid  subscriptions  to  the  corporate  stock  (Mills, 
sec.  486). 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  officers  as  the  by-laws  shall  prescribe. 
The  par  value  of  stock  certificates  must  not  be  less  than  $1  nor  more  than 
$100  (Mills,  sec.  480). 

15.  Preferred  Stock.  —  The  issuance  of  preferred  stock  is  not  expressly 
authorized  by  statute. 

16.  Payment  of  Capital  Stock.  —  The  corporation  may  purchase  mines, 
manufactories,  and  other  property  necessary  for  the  corporate  business,  and 
issue  stock  to  the  amount  of  the  value  thereof  in  payment  therefor.  Stock 
so  issued  shall  be  declared  full  paid  stock  and  not  liable  to  any  further  assess- 
ments. Neither  shall  the  stockholders  be  liable  to  any  further  payments  there- 
for. The  constitutional  provision  (Cons.,  Art.  XV.  sec.  9)  is  that  no  corporation 
shall  issue  stock  or  bonds  except  for  labor  done,  service  performed,  or  money 
or  property  actually  received  (Mills,  sec.  618). 

17.  Books.  — The  directors  are  required  to  keep  at  the  principal  office  or 
place  of  business  within  the  State  correct  books  of  account.  These  books 
shall  be  open  to  the  inspection  of  stockholders  at  any  time.  In  addition  to 
the  foregoing  a  stock  register  must  be  kept  containing  the  names  and  residences 
of  the  stockholders,  the  number  of  shares  held  by  them,  the  time  when  they 
became  or  ceased  to  be  stockholders,  and  the  amount  of  stock  actually  paid  in 
and  what  proportion  has  been  paid  in  cash.  This  book  is  open  to  the  inspection 
of  stockholders  and  creditors  during  business  hours  (Mills,  sec.  488;  3  Mills, 
sec.  508 ;  Laws  of  1903,  chap.  77). 

18.  Office.  —  The  corporation  must  maintain  an  office  within  the  State 
(Mills,  sec.  473). 

19.  Reports.  —  Annually  within  sixty  days  from  January  1st,  reports  must 
be  filed  with  the  Secretary  of  State,  covering  the  names  and  residences  of  officers 
and  directors,  the  amount  of  capital  stock  fixed,  and  the  proportion  paid  in; 
a  statement  of  the  manner  of  the  payment  of  capital  stock,  a  statement  that  the 
company  is  or  is  not  engaged  actively  in  business  within  the  State,  and  other 
information  necessary  to  show  the  financial  condition  of  the  company.  Also 
the  amount  of  indebtedness  of  the  company  at  the  date  of  the  filing  of  the 
report.  (Mining,  ditch,  and  power  companies  must  include  other  statements.) 
In  case  of  failure  to  file  such  report  the  officers  and  directors  become  liable  for 

256 


DIGEST    OF    INCORPORATION    ACTS.  —  COLORADO. 

corporate  indebtedness  contracted  during  the  preceding  year,  or  while  such 
default  continues  (Laws  of  1911,  chap.  102).  A  report  of  particulars  of  financial 
condition  must  also  be  made  to  the  State  Board  of  Assessors,  and  tiled  before 
June  1st,  under  penalty  of  $100  per  day  for  default  (Laws  of  1902,  pp.  71-73, 
sec.  63). 

20.  Anti-Trust  Statute.  — There  is  no  anti-trust  statute. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Quo  warranto  lies 
for  failure  to  pay  fees  on  issuance  of  stock  (sec.  491  b,  Cons.,  Art  icle  XV,  sec.  3). 
If  any  corporation  fails  for  a  period  of  three  years  to  pay  tin-  annual  State,  cor- 
poration or  license  tax  and  other  fees  required  by  law,  or  to  make  any  report 
the  statutes  require,  the  charter  of  such  corporation  is  subject  to  forfeiture  by 
the  Secretary  of  State  upon  compliance  by  him  with  statutory  requirements 
looking  to  that  end.     (See  Laws  of  1911,  chap.  101.) 

22.  Amendments.  —  Corporations  may  amend  their  articles  of  incorpora- 
tion in  any  manner  provided  that  thereby  they  do  not  so  change  such  articles 
as  to  work  a  change  in  the  object  or  purposes  for  which  such  corporation  was 
originally  organized.  All  proposed  amendments  must  be  voted  upon  by  the 
stockholders  either  at  their  regular  annual  meeting  or  at  a  special  meeting ; 
provided  the  published  notice  of  such  annual  meeting  required  by  law  and  by 
the  by-laws  of  the  corporation  shall  have  contained  a  notice  of  such  proposed 
amendment  giving  the  purport  of  the  same,  and  that  it  would  be  presented 
and  acted  upon  at  such  meeting,  and  provided  further  that  if  such  amendment 
is  to  be  voted  upon  at  a  special  meeting  the  same  shall  be  called  by  order  of 
the  board  of  directors,  and  that  notice  thereof  shall  have  been  given  as  required 
by  the  by-laws  of  the  corporation  and  by  delivering  personally  or  depositing 
in  the  post-office,  at  least  thirty  days  before  the  time  fixed  for  such  meeting, 
a  notice  properly  addressed  to  each  stockholder,  signed  by  the  president  or 
other  head  officer  or  the  secretary,  stating  the  time  and  object  of  such  meeting, 
and  that  the  same  will  be  held  at  the  place  appointed  by  said  board  and  desig- 
nated in  such  notice,  and  as  provided  in  sec.  347  of  the  General  Statutes  of 
Colorado.  The  act  also  provides  that  a  meeting  of  the  stockholders  to  vote 
upon  the  proposed  amendment  shall  be  called  by  the  president  or  other  head 
officer  upon  the  written  request  of  the  holders  of  one-third  in  amount  of  the 
subscribed  capital  stock.  Upon  such  request  the  president  must  call  together 
the  board  of  directors  and  present  such  request  to  them,  and  thereupon  it 
shall  be  the  duty  of  the  board  of  directors  to  call  a  special  meeting  of  the  stock- 
holders for  the  purpose  of  considering  such  proposed  amendment  for  a  time 
not  less  than  thirty  nor  more  than  sixty  days  thereafter,  which  meeting  shall  be 
called  by  delivering  personally  or  depositing  in  the  post-office,  at  least  thirty 
days  before  the  time  fixed  for  such  meeting,  a  notice  properly  addressed  to 
each  stockholder,  signed  by  the  president  or  other  head  officer  or  secretary, 
stating  the  time  and  object  of  such  meeting,  which  shall  be  held  at  the  place 
appointed  by  the  said  board  and  designated  in  such  notice.  If  at  such  stock- 
holders' meeting  the  amendment  shall  receive;  the  vote  of  two-thirds  of  all  the 
subscribed  capital  stock,  it  shall  be  deemed  adopted,  and  a  certificate  setting 
forth  the  fact  or  facts,  signed  by  the  president  or  other  bead  officer  of  such 
corporation,  and  verified  by  his  affidavit  and  attested  by  the  secretary  thereof 
with  the  seal  of  the  corporation  thereunto  affixed,  shall  be  filed  for  record  with 
the  Secretary  of  State,  and  a  like  certificate  shall  be  hied  in  the  office  of  the 
recorder  of  each  county  wherein  the  original  articles  of  incorporation  were  tiled. 
Thereafter  such  amendment  or  amendments  shall  be  in  full  force  and  effect   to 

17  257 


DIGEST    OF    INCORPORATION    ACTS.  —  COLORADO. 

the  same  extent  as  if  the  same  had  been  included  in  the  original  articles  of 
incorporation  (3  Mills,  sees.  477  to  479  inclusive,  as  amended  by  Session  Laws 
of  Colorado,  1907,  chap.  138). 

23.  Annual  Franchise  Tax.  —  All  domestic  corporations  must  on  or  before 
the  1st  day  of  May  of  each  year  pay  an  annual  State  corporation  license  tax 
to  the  Secretary  of  State  in  the  amount  of  2  cents  upon  each  $1,000  of  its 
capital  stock  (Session  Laws  of  1907,  chap.  211). 

24.  Extension  of  Corporate  Existence.  —  Stockholders  owning  at  least 
ten  per  cent  of  the  entire  capital  stock  of  the  corporation  have  the  right  to  call 
a  special  meeting  of  the  stockholders  to  vote  upon  the  question  as  to  whether 
the  corporate  existence  shall  be  extended  beyond  the  limit  prescribed  in  the 
original  articles.  Notice  of  such  meeting  must  be  given  by  publication  for  four 
successive  weeks  by  mailing  notice  thereof  to  each  stockholder  at  least  thirty 
days  prior  to  the  time  fixed  for  the  meeting.  A  majority  of  the  entire  capital 
stock  issued  and  outstanding  must  be  represented  thereat.  If  such  majority 
votes  in  favor  of  renewal,  the  president  and  secretary  shall  under  the  seal  of 
the  company  certify  to  that  fact,  and  shall  file  one  certificate  in  the  office  of  the 
recorder  of  deeds  in  each  county  wherein  the  company  may  do  business,  and 
one  in  the  office  of  the  Secretary  of  State.  Thereupon  the  corporate  life  of  such 
corporation  shall  be  renewed  for  another  term  of  twenty  years.  The  Secretary 
of  State  is  entitled  to  charge  the  same  fees  as  are  provided  by  law  for  fifing  in 
his  office  new  certificates  of  incorporation  (Laws  of  1905,  chap.  87). 

Pratt  v.  Company,  1  Col.  Dec.  Supp.  171. 

25.  Dissolution.  —  If  all  debts  are  paid,  a  company  may  be  dissolved  by 
the  vote  of  two-thirds  of  the  outstanding  stock  at  a  meeting  of  the  stockholders 
called  for  that  purpose.  A  certificate  of  such  dissolution  must  be  filed  and  like- 
wise published  (3  Mills,  sec.  619  a ;  see  special  act  relative  to  conspiracies  to 
bring  about  receiverships,  Session  Laws  of  1907,  chap.  152). 

26.  Foreign  Corporations. — A  foreign  corporation  desiring  to  do  any 
business,  institute  or  defend  actions,  or  hold  property  within  the  State  is  re- 
quired to  file  with  the  Secretary  of  State  a  copy  of  its  charter,  or  of  its  certifi- 
cate of  incorporation,  duly  certified  and  authenticated  by  the  proper  authority 
from  the  State  from  which  the  charter  issues.  It  must  also  file  a  certificate, 
signed  and  acknowledged  by  the  president  and  secretary,  with  the  Secretary 
of  State  and  in  the  office  of  the  recorder  of  deeds  of  the  county  or  counties  in 
which  it  proposes  to  carry  on  its  business  within  the  State,  designating  the  princi- 
pal place  wherein  the  business  of  said  corporation  is  to  be  carried  on  in  the  State, 
and  appointing  an  agent  at  this  principal  place  of  business  upon  whom  process 
may  be  served.  The  preliminary  fee  for  foreign  corporations  seeking  to  obtain 
a  permit  to  do  business  within  the  State  is  one-half  more  than  for  filing  original 
certificates  of  domestic  corporations.  All  foreign  corporations  must  pay  on  or 
before  the  1st  day  of  May  of  each  year  an  annual  State  corporation  license  of 
two  cents  upon  each  one  thousand  dollars  par  value  upon  that  proportion  of  its 
capital  stock  represented  by  its  corporate  capital  property  and  assets  located  and 
employed  in  Colorado;  and  every  such  foreign  corporation  by  its  president  and 
secretary  shall  within  sixty  days  next  after  the  first  day  of  June  in  each  year 
make  and  forward  to  the  Secretary  of  State  a  statement  sworn  to  and  showing 
that  portion  of  the  capital  stock  of  such  corporation  which  is  represented  by  its 
corporate  capital,  property  and  assets  located  and  employed  in  Colorado.  A 
penalty  of  ten  per  cent  of  such  tax  for  every  six  months  during  which  said  tax  is 

258 


DIGEST   OF   INCORPORATION   ACTS.  —  COLOR-ADO. 

delinquent  is  exacted  (Laws  of  1911,  chap.  103).  Foreign  corporations  must 
also  file  annual  reports,  setting  forth  the  same  matters  as  are  required  of  domestic 
corporations,  and  in  addition  thereto  the  following  matters:  A  statement  as  t<> 
the  portion  of  its  capital  stock  represented  by  its  corporate  capital,  property 
and  assets  located  and  employed  in  the  State  of  Colorado.  And  if  it  appear  by 
any  animal  report  so  filed  that  the  corporate  capital,  property  and  assets  located 
and  employed  in  the  State  of  Colorado  will  exceed  the  amount  mentioned  in  its 
sworn  statement  at  the  time  of  the  original  filing  in  the  office  of  the  Secretary 
<oi  State,  then  the  said  corporation  shall  pay  to  the  Secretary  of  State  thirty 
oents  on  each  and  every  one  thousand  dollars  of  such  excess  (Laws  of  1911,  chap. 
102). 

Every  corporation,  joint  stock  company  or  association,  incorporated  by  or 
under  any  general  or  special  law  of  any  foreign  State  or  kingdom,  or  any  State 
or  Territory  of  the  United  States  beyond  the  limits  of  this  State,  having  a  capital 
stock  divided  into  shares,  shall  pay  to  the  Secretary  of  State  for  the  use  of  the 
S-tate  a  fee  of  thirty  dollars  in  case  the  capital  stock  which  such  corporation, 
joint  stock  company  or  association  is  authorized  to  have  does  not  exceed  fifty 
thousand  dollars;  but  in  case  the  capital  stock  thereof  is  in  excess  of  fifty  thou- 
sand dollars  the  Secretary  of  State  shall  collect  the  further  sum  of  thirty  cents 
on  each  and  every  one  thousand  dollars  of  that  portion  of  such  excess  of  capital 
stock  as  is  represented  by  its  corporate  capital  property  and  assets  employed  and 
located  in  Colorado  and  a  like  fee  of  thirty  cents  on  each  one  thousand  dollars 
of  that  proportion  of  the  amount  of  subsequent  increase  of  stock  as  represented 
by  the  corporate  capital,  property  and  assets  employed  and  located  in  Colorado, 
and  every  such  corporation  by  its  president  and  secretary  shall  file  with  the 
certified  articles  of  incorporation  and  the  affidavits  required  a  sworn  statement 
under  its  corporate  seal,  setting  forth  the  entire  amount  of  its  capital,  and  that 
proportion  thereof  which  is  represented  by  the  corporate  property,  capital  and 
assets  employed  and  located  in  the  State  of  Colorado.  The  said  fee  shall  be  due 
and  payable  upon  the  fifing  of  the  certificate  of  incorporation,  articles  of  associa- 
tion or  charter  of  such  corporation,  joint  stock  company  or  association  in  the 
office  of  the  Secretary  of  State,  and  no  such  corporation,  joint  stock  company 
or  association  shall  have  or  exercise  any  corporate  powers  or  hold  or  acquire  any 
real  or  personal  property,  franchises,  rights  or  privileges  or  be  permitted  to  do 
any  business  or  prosecute  or  defend  any  suit  in  this  State  until  the  said  fee  shall 
have  been  paid  (Laws  of  1911,  chap.  102,  sec.  4).  For  filing  copies  of  laws  of 
foreign  States  the  fee  is  $5;   for  filing  certificate  designating  agent,  $5. 

Miller  v.  Williams,  27  Col.  34;  59  Pac.  740;  Keghart  v.  People,  28  Col.  73;  62  Pac.  946; 
Iron  Silver  Mining;  Co.  v.  Cowie,  31  Col.  450;  72  Pac.  1067. 


259 


DIGEST    OF    INCORPORATION    ACTS.  —  CONNECTICUT. 


CONNECTICUT. 

(The  references  cited  below  are  to  the  Session  Laws  of  1903,  chap.  194,  unless  otherwise 
stated.) 

1.  Character  of  the  Law  under  which  Business  Corporations  may 
incorporate. — The  corporation  laws  of  Connecticut,  including  the  Corpora- 
tion Act  of  1901  (General  Statutes,  1901,  chap.  157),  have  been  entirely  revised. 
The  provisions  of  the  Act  of  1901  have  been  repealed,  and  the  revised  law  — 
Laws  of  1903,  chap.  194  —  has  been  substituted  therefor.  Special  acts  are  pro- 
vided for  the  incorporation  of  banking,  trust,  building  and  loan,  insurance, 
surety,  railway,  street  railway,  telephone,  telegraph,  gas,  electric  light,  and 
water  companies.  Corporations  may,  however,  be  incorporated  for  the  purpose 
of  transacting  any  of  the  said  lines  of  business  just  enumerated  in  any  other 
State  or  foreign  country  if  not  prohibited  by  the  laws  of  such  State  or  foreign 
country  (sec.  62). 

2.  Incorporators. — Three  or  more.  There  are  no  residential  require- 
ments (sec.  62). 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate  must 
set  forth : 

a.  Name.  —  The  name  of  every  corporation  shall  be  such  as  to  distinguish  it 
from  any  other  corporation  organized  under  the  laws  of  this  State,  and  from  any 
other  corporation  engaged  in  the  same  business  or  promoting  or  carrying  on  the 
same  purposes  in  this  State,  and  such  name  shall  be  in  the  English  language, 
and  shall  begin  with  "the"  and  end  with  "company"  or  "corporation,"  or  have 
the  word  "incorporated"  immediately  after  or  in  the  same.  Every  corporation 
shall  be  located  in  some  town  in  the  State  (Public  Acts  of  1907,  chap.  155). 

b.  Domiciliary  Office.  —  The  name  of  the  town  in  the  State  in  which  the 
corporation  is  to  be  located  (sec.  63  ;   Public  Acts  of  1907,  chap.  155). 

c.  Nature  of  the  Business  to  be  transacted  or  the  Purposes  to  be  promoted  or 
carried  out.  —  The  statute  clearly  contemplates  that  corporations  may  be  or- 
ganized for  any  number  of  purposes  not  covered  by  the  special  acts  (sec.  63). 

d.  Capital  Stock.  —  The  amount  of  the  total  authorized  capital  stock,  which 
shall  not  be  less  than  $2,000 ;  also  the  number  of  shares  into  which  the  same 
is  divided,  which  shall  not  be  less  than  $25.  If  there  be  more  than  one  class 
of  stock,  a  description  of  the  general  classes  with  the  terms  upon  which  they 
are  respectively  created  (sec.  63). 

e.  Commencing  Business.  —  Amount  of  capital  stock  with  which  the  corpo- 
ration shall  begin  business,  which  shall  not  be  less  than  $1,000  (sec.  63). 

/.  Duration.  —  The  period,  if  any,  limited  for  the  duration  of  the  corpora- 
tion.    The  charter  may  be  perpetual  if  desired  (sec.  63). 

g.  Regulation  of  Internal  Affairs.  —  There  may  also  be  inserted  any  lawful 
provisions  which  the  incorporators  may  choose  to  insert  for  the  regulation  of 
the  business  of  the  corporation,  or  for  defining  or  limiting  the  powers  of  the 
corporation,  its  officers,  directors,  or  any  class  of  stockholders  (sec.  64). 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of  the 
powers  of  corporations  (Laws  of  1903,  chap.  194,  sec.  3)  corporations  have  the 
following  extraordinary  powers  :  To  carry  on  their  business  in  any  State  or 
Territory  of  the  United  States  or  in  any  foreign  country.    To  share  profits  with 

260 


DIGEST    OF    INCORPORATION    ACTS. CONNECTICUT. 

employees.  To  acquire  its  own  stock.  To  voluntarily  dissolve  itself.  To 
mortgage  real  and  personal  estate,  including  its  franchises,  and  issue  promissory 
notes,  bonds,  or  other  evidences  of  indebtedness.  To  issue  one  or  more  classes 
of  stock.  To  consolidate  with  another  corporation  engaged  in  the  same  or  simi- 
lar line  of  business.  To  enforce  a  lien  upon  corporate  stock  for  all  debts,  includ- 
ing assessments.  To  appoint  an  executive  committee  from  the  board  of  directors. 
To  vote  by  proxy  and  to  purchase  and  to  hold  the  stock  of  other  corporations. 
To  cumulate  votes  in  the  election  of  directors  by  making  provision  therefor  in 
the  certificates  of  incorporation  (Laws  of  1903,  chap.  194,  sees.  3,  4,  9,  11,  21, 
25,  27,  59,  75;  Laws  of  1905,  chaps.  166,  171.  As  to  mortgage  of  after-acquired 
property,  see  Laws  of  1911,  chap.  260.) 

5.  Procuring  the  Charter.  —  The  certificate  must  be  signed  and  sworn 
to  by  each  of  the  incorporators  and  must  be  filed  in  the  office  of  the  Secret a ry 
of  State,  who  shall  examine  the  same,  and  if  he  finds  that  it  conforms  to  the 
law,  and  that  the  organization  tax  has  been  paid,  shall  endorse  thereon  the  word 
"approved,"  with  his  name  and  official  title,  and  shall  thereupon  record  such 
certificate  in  a  book  kept  by  him  for  that  purpose  (sec.  60).  The  law  provides 
that  the  corporate  existence  shall  begin  upon  the  approval  of  such  certificate 
by  the  Secretary  of  State  (sec.  65).  After  such  approval  and  until  the  directors 
shall  be  elected,  the  incorporators  shall  be  given  charge  of  the  affairs  of  the 
corporation  and  may  take  such  steps  as  are  necessary  or  proper  to  obtain  sub- 
scriptions to  its  stock  (sees.  66  and  67). 

5.  G.  &  P.  Co.  v.  Scholfield,  70  Conn.  500;  40  Atl.  182. 

6.  Corporate  Indebtedness. — There  is  no  limitation  upon  amount  of 
corporate  indebtedness. 

7.  Organization  Tax.  —  Fifty  cents  on  every  thousand  dollars  of  its  cap- 
ital stock  up  to  $5,000,000.  Beyond  that  amount  10  cents  upon  every  thousand 
dollars  of  excess.    The  minimum  fee,  however,  is  $25  (sec.  61). 

8.  Filing  and  Recording  Fees.  — To  the  Secretary  of  State,  $1  for  filing 
certificate  of  incorporation,  and  for  recording  the  same  $1  for  two  pages  or  less, 
and  for  each  additional  page  at  the  rate  of  50  cents  per  page.  For  filing  eeitifi- 
cate  of  organization,  $1,  and  for  recording  the  same  $1  for  two  pages  or  less,  and 
for  each  additional  page  at  the  rate  of  50  cents  per  page.  For  preparing  certi- 
fied copy  of  certificate  of  incorporation,  50  cents  for  each  page,  but  in  no  case 
less  than  $1.50.  For  filing  annual  reports,  $1.  For  preparing  forms  lor  certifi- 
cates and  reports  of  corporations,  for  recording  the  same  and  for  copies  of 
certificate,  50  cents  for  each  page,  but  in  no  case  less  than  $1.  For  filing  copy 
of  charter  or  certificate  of  organization  of  foreign  corporation,  $10;  for  filing 
statement  required  from  such  corporation,  $5;  for  secretary's  certificate  with  the 
State's  seal  impressed  thereon,  50  cents.  For  filing  appointment  of  Secretary 
of  State  as  attorney  for  such  corporation,  $1  ;  for  filing  annual  report  and  certi- 
fied copy  thereof,  $2.50 ;  for  recording  certificate  of  incorporation  in  local  county 
office,  $1. 

9.  Commencing  Business.  —  A  corporation  cannot  commence  business 
until  the  amount  of  capital  specified  in  the  certificate  of  incorporation  as  the 
amount  with  which  it  will  begin  business  lias  been  paid  in,  nor  until  its  directors 
and  officers  have  been  duly  elected  and  its  by-laws  adopted,  nor  until  a  majority 
of  its  directors  have  caused  to  be  filed  with  the  Secretary  of  Stale  a  certificate 
of  organization  setting  forth  (1)  The  amount  of  each  class  of  stock  subscribed 
for.      (2)  The   amount    paid  thereon  in  cash.      (3)  The  amount   paid    thereon  in 

L'Cl 


DIGEST    OF    INCORPORATION   ACTS. CONNECTICUT. 

property  other  than  cash.  (4)  The  amount  paid  on  each  share  of  stock  which 
has  not  been  paid  in  full.  (5)  The  names  and  residences  of  each  of  the  origi- 
nal subscribers  with  the  number  and  class  of  shares  subscribed  for  by  each. 
(6)  That  the  officers  and  directors  of  the  corporation  have  been  duly  elected  and 
its  by-laws  adopted.  (7)  The  names,  residences,  and  post-office  addresses  of 
each  of  the  officers  and  directors.  (8)  The  location  of  its  principal  office  in  this 
State  with  the  street  number,  if  any,  thereof,  and  the  name  of  the  agent  or 
person  in  charge  thereof  upon  whom  process  against  the  corporation  may  be 
served  (Laws  of  1905,  chap.  267;  Laws  of  1909,  chap.  160).  Unless  a  certifi- 
cate of  organization  is  filed  within  two  years  after  the  filing  of  the  certificate  of 
incorporation,  such  certificate  of  incorporation  shall  be  void.  The  Secretary  of 
State  must  approve  the  certificate  of  organization  before  fifing  (sec.  69,  Laws 
of  1905,  chap.  267;  Laws  of  1909,  chap.  160).  No  corporation  can  commence 
business  until  a  copy  of  the  certificate  of  incorporation,  duly  certified  by  the 
Secretary  of  State,  shall  have  been  duly  filed  and  recorded  in  the  office  of  the 
town  clerk  of  the  town  where  the  corporation  is  to  be  located  (sec.  60).  (As  to 
preliminaries  necessary  to  be  observed  to  secure  permit  to  sell  stock  of  oil  and 
mining  companies,  see  Laws  of  1903,  chap.  196.) 

10.  Organization  Meeting.  —  A  majority  of  the  incorporators  may  call 
the  organization  meeting  at  such  time  and  place  as  may  be  designated  by  a 
notice  published  twice  at  least  seven  days  before  the  time  designated  in  a  news- 
paper in  the  State  having  circulation  in  the  town  in  which  the  corporation  is 
located,  and  such  notice  may  be  waived  by  a  writing  signed  by  all  the  sub- 
scribers to  the  stock,  and  a  majority  of  the  incorporators,  specifying  the  time 
and  place  for  such  meeting.  When  the  meeting  is  held,  the  subscribers  for  the 
stock,  who  may  be  present  in  person  or  be  represented  by  proxy,  must  choose 
a  temporary  clerk,  and  proceed  to  the  election  by  ballot  of  three  or  more  directors 
who  are  subscribers  to  the  capital  stock,  and  shall  adopt  by-laws  for  the  regu- 
lation of  the  affairs  of  the  corporation.  Immediately  upon  the  adjournment 
of  the  organization  meeting  of  the  incorporators  the  directors  should  meet  and 
organize  by  choosing  from  among  their  number  a  president,  and  shall  appoint 
a  treasurer  and  secretary,  and  such  other  officers  as  the  by-laws  shall  prescribe. 
The  same  person  may  fill  the  offices  of  president  and  treasurer  or  of  secretary 
and  treasurer  (sees.  67-71  inclusive). 

11.  Meetings  of  Stockholders  and  Directors.  —  Meetings  of  stock- 
holders must  be  held  at  the  office  of  the  company  within  the  State.  Directors' 
meetings  may  be  held  without  the  State  by  making  provision  therefor  in  the 
by-laws  or  by  the  consent  of  all  the  directors.  Cumulative  voting  is  permitted 
if  provision  is  made  therefor  in  the  certificate  of  incorporation  (sees.  3,  22 ;  Laws 
of  1905,  chap.  171).  For  three  days  prior  to  the  holding  of  any  stockholders' 
meeting  a  complete  list  of  the  stockholders  entitled  to  vote,  arranged  in  alpha- 
betical order,  shall  be  open  to  inspection  by  any  stockholder  at  the  time  and  place 
of  the  meeting  (Laws  of  1911,  chap.  215). 

McCall  v.  Company,  6  Conn.  428. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  at  least  three  directors,  who  must  be  stockholders.  There 
are  no  residential  requirements.  They  may  be  divided  into  classes  if  desired 
(sees.  10,  68).  The  board  of  directors  may  appoint  an  executive  committee 
if  they  see  fit  (sec.  10).  May  adopt  by-laws  subject  to  those  adopted  by  the 
stockholders. 

262 


DIGEST    OF    INCORPORATION    ACTS. CONNECTICUT. 

b.  Liabilities.  —  Every  director  voting  for  a  dividend  or  other  distribution 
of  assets,  except  from  the  net  profits  or  actual  surplus  of  the  corporation,  is 
liable  to  a  fine  of  not  more  than  §500.  If  such  payment  or  distribution  leaves 
the  company  insolvent,  the  directors  so  voting  shall  be  jointly  and  severally 
liable  to  the  amount  so  paid  or  distributed  to  any  creditors  existing  at  the  date 
of  such  voting  which  shall  have  obtained  judgment  against  such  corporation 
and  on  which  execution  shall  have  been  returned  unsatisfied.  Where  the  di- 
rectors concur  in  a  fraudulent  overvaluation  of  property  taken  in  exchange  for 
stock  of  the  corporation,  they  are  jointly  and  severally  liable  to  the  corporation 
for  the  amount  of  the  difference  between  the  actual  value  of  any  property  so 
accepted  in  payment  at  the  time  of  such  indebtedness  and  the  amount  for  which 
it  is  received  in  payment  (sees.  5,  12.     See  also  Laws  of  1907,  chap.  144). 

Davenport  v.  Lines,  72  Conn.  118;    44  Atl.  17. 

13.  Stockholders'  Liabilities.  —  Stockholders,  whether  original  sub- 
scribers or  not,  are  liable  for  any  balance  due  on  the  stock  held  by  them.  After 
the  par  value  of  their  stock  has  been  paid  they  are  not  liable  for  any  further 
assessments.  They  are  liable  for  causing  insolvency  by  illegally  reducing  stock 
(sees.  6,  16). 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  under  the  seal  of  the  corporation  signed  by  the  presi- 
dent or  vice-president  and  by  the  secretary  or  assistant  secretary  or  treasurer 
or  assistant  treasurer.  The  par  value  of  stock  certificates  must  not  be  less  than 
$25  (sees.  1,  17,  63). 

15.  Preferred  Stock.  —  Special  authority  to  issue  preferred  stock  is  given 
by  statute  if  provision  is  made  therefor  in  the  certificate  of  incorporation.  The 
terms  upon  which  such  preferred  stock  is  issued  must  be  stated  in  the  certificate 
of  incorporation  (sec.  63 ;  see  also  sec.  25). 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  paid  for  either  in  case 
or  in  property.  If  not  paid  for  in  cash,  a  majority  of  the  directors  shall  make 
and  sign  upon  the  corporate  records  a  statement  showing  the  property  received 
in  payment  for  stock  and  that  it  has  an  actual  value  equal  to  the  amount  for 
which  it  was  so  received.  The  judgment  of  the  directors  as  to  the  value  of  the 
property  upon  this  subject  is  made  final.  But  the  directors  concurring  in  the 
judgment  of  such  valuation,  in  the  case  of  fraud  in  the  overvaluation  of  such 
property,  are  jointly  and  severally  liable  to  the  corporation  for  the  difference 
between  the  actual  value  of  such  property  so  accepted  in  payment  and  the 
amount  for  which  it  is  received  in  payment  (sec.  12). 

17.  Books.  —  The  stock  book  or  duplicate  thereof,  containing  the  names 
and  addresses  of  the  stockholders  and  the  number  of  shares  held  by  them,  shall 
at  all  times  during  the  usual  hours  of  business  be  open  to  the  examination  of 
every  stockholder  at  its  principal  office  and  place  of  business  in  the  State.  If 
a  creditor  makes  an  affidavit  that  he  is  a  creditor  of  the  corporation,  the 
person  in  charge  of  the  stock  books  is  obliged  to  furnish  him  informaticm 
as  to  the  number  of  shares  held  by  such  stockholder  in  any  corporation 
(sec.  18,  as  amended  by  Laws  of  1911,  chap.  215;  see  also  sec.  39). 

Heminway  v.  Heminway,  58  Conn.  443;    19  Atl.  766. 

18.  Office.  —  The  corporation  must  maintain  an  office  within  the  State 
(sec.  63). 

19.  Reports.  — The  president,  or,  in  case  of  his  absence  or  disability,  the 
secretary  and  treasurer,  must  annually,  on  or  before  the  15th  day  of  February 

263 


DIGEST    OF    INCORPORATION   ACTS.  —  CONNECTICUT. 

or  August,  make,  sign,  swear  to,  and  file  in  the  office  of  the  Secretary  of  State 
a  certificate  setting  forth  as  of  the  1st  day  of  January  or  July  immediately  pre- 
ceding: the  name,  residence,  and  post-office  address  of  all  the  officers  and 
directors;  amount  of  outstanding  capital  stock  which  has  not  been  paid  for 
in  full,  with  the  amount  due  thereon ;  location  of  the  principal  office  within  the 
State,  with  the  street  number  if  there  be  any,  and  the  name  of  the  person  in 
charge  thereof  upon  whom  process  against  the  corporation  may  be  served  (sec. 
37,  as  amended  by  Public  Acts  of  1907,  chap.  27).  Whenever  a  corporation 
shall  be  in  the  hands  of  a  receiver  or  trustee  in  bankruptcy  or  a  trustee  in  in- 
solvency, or  whenever  any  foreign  corporation  shall  have  appointed  the  Secretary 
of  State  its  attorney,  has  ceased  to  do  business  in  this  State,  and  such  fact  is 
certified  to  and  recorded  by  the  Secretary  of  State,  or  whenever  any  domestic 
corporation  has  filed  its  certificate  of  dissolution,  no  annual  report  shall  be  re- 
quired of  such  corporation  during  the  period  aforesaid  (Public  Acts  of  1909, 
chap.  160).  A  certified  copy  of  said  certificate  must  be  recorded  in  the  office 
of  the  town  clerk  of  the  town  in  which  such  corporation  is  located  (sec.  37). 
Every  corporation  may  at  any  meeting  duly  held  for  that  purpose,  empower  its 
directors  to  issue  shares  of  its  unissued  authorized  capital  stock.  At  the  time  of 
the  filing  of  its  next  annual  report,  after  the  issue  of  any  such  shares,  a  majority 
of  the  directors  shall  make  and  file  a  certificate  setting  forth  the  facts  relating, 
to  such  issue  similar  to  the  facts  relative  to  the  original  issue  of  stock  required 
as  set  forth  under  the  certificate  of  organization  (sec.  71.  As  to  penalty  for 
failure  to  file  annual  report  see  sec.  21  below.  See  Laws  of  1911,  chap.  147,  as  to 
power  of  Attorney  General  to  remit  forfeitures  or  fines). 

20.  Anti-Trust  Statute. — There  is  no  anti-trust  affidavit  in  force  in 
Connecticut. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  grounds  for 
proceedings  in  the  nature  of  quo  warranto  against  corporations  are  to  be  found 
in  the  Statutes  of  Connecticut  1887,  sees.  1296-1302  inclusive.  Unless  the  cer- 
tificate of  organization  is  filed  within  two  years  after  the  filing  of  the  certificate 
of  incorporation,  it  is  void  (Laws  of  1905,  chap.  267). 

Any  corporation  failing  to  file  its  annual  report  for  two  consecutive  years 
and  shall  not  pay  to  the  State  the  forfeiture  imposed  for  such  neglect  shall  prima 
facie  be  deemed  to  have  forfeited  its  rights  and  powers,  and  its  corporate  ex- 
istence may  be  terminated  by  law  (Public  Acts  of  1909,  chap  200). 

Pearce  v.  Olney,   20  Conn.  544;  Hart  v.  Company,  40  Conn.  524. 

22.  Amendments.  —  Articles  may  be  amended  before  commencing  busi- 
ness in  any  respect  desired,  provided  that  the  subject  matter  of  such  changes 
could  have  been  inserted  in  the  original  certificate  of  incorporation.  No 
change,  alteration,  or  amendment  shall  be  valid  unless  approved  in  writing  by 
all  of  the  subscribers  to  the  capital  stock  of  such  corporation,  nor  unless  a  cer- 
tificate setting  forth  such  amendments,  changes,  or  alterations  and  stating  the 
same  has  been  duly  approved  by  the  subscribers,  shall  be  made,  acknowledged, 
and  filed  by  all  of  the  incorporators  both  in  the  office  of  the  Secretary  of  State 
and  in  the  office  of  the  town  clerk  of  the  town  where  the  corporation  is  to  be 
located  (sec.  73). 

Every  corporation  may  change  its  name,  nature  of  its  business,  and  its  loca- 
tion ;  may  increase  or  reduce  the  amount  of  its  authorized  capital  stock ;  may 
create  one  or  more  classes  of  stock ;  may  make  such  other  amendments  in  its 
certificate  of  incorporation  as  may  be  desired,  provided  that  the  subject  matter 

264 


DIGEST    OF    INCORPORATION    ACTS.  —  CONNECTICUT. 

thereof  could  have  been  lawfully  inserted  in  the  original  certificate  of  incor- 
poration. No  such  amendments  shall  be  valid  unless  approved  by  the  vote  of 
two-thirds  of  the  outstanding  capital  stock  of  each  class  at  a  meeting  of  the 
stockholders  duly  called  to  consider  such  amendment,  nor  unless  a  certificate 
setting  forth  such  amendments  and  stating  the  same  have  been  duly  adopted 
by  the  stockholders,  shall  be  made  and  filed  with  the  Secretary  of  State  by  a 
majority  of  the  directors  (sec.  74). 

N.  H.  &  D.  Ry.  Co.  v.  Chapman,  38  Conn.  56. 

23.  Annual  Franchise  Tax.  —  There  is  no  annual  franchise  tax 
(sec.  61). 

24.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for 
extension  of  corporate  existence. 

25.  Dissolution.  —  The  franchises  may  be  surrendered  at  any  time  be- 
fore any  part  of  subscriptions  are  paid  and  business  begun.  Whence  er  directors 
of  a  corporation  shall  vote  to  terminate  its  corporate  existence,  they  shall  forth- 
with call  a- special  meeting  of  the  stockholders,  to  be  held  not  less  than  thirty 
nor  more  than  forty  days  after  the  date  of  such  calling.  Such  call  shall  contain 
a  copy  of  such  vote,  and  shall  be  published  once  a  week  for  four  weeks  next  pre- 
ceding such  meeting  in  a  newspaper  of  the  State  having  a  circulation  in  the 
town  where  such  corporation  is  located,  and  a  copy  thereof  shall  be  sent  by 
mail  to  the  last  known  address  of  each  stockholder.  If  at  said  meeting  of  the 
stockholders  three-fourths  in  interest  of  each  class  of  stock  issued  shall  vote 
to  confirm  such  vote  of  the  directors,  the  directors  shall  proceed  forthwith  to 
wind  up  the  affairs  of  the  corporation.  If  every  stockholder  shall  sign  and  ac- 
knowledge an  agreement  among  stockholders  that  the  corporate  existence  of 
such  corporation  shall  be  terminated,  the  vote  of  the  directors  and  the  con- 
firming vote  of  the  stockholders  may  be  dispensed  with  (sec.  29).  Whenever 
the  stockholders  shall  by  vote  or  written  assent  agree  to  the  dissolution  of  a 
corporation,  a  majority  of  the  directors  shall  make,  sign,  and  swear  to  and  file 
in  the  office  of  the  Secretary  of  State  a  certificate  that  such  stockholders'  vote 
has  been  duly  passed  or  such  assent  duly  given,  and  stating  the  address  to 
which  all  claims  against  such  corporation  may  be  sent,  and  such  secretary  shall 
thereupon  record  such  certificate  in  a  book  kept  by  him  for  that  purpose.  When 
the  directors  have  completed  their  duties  as  trustees,  for  the  purpose  of  winding 
up  the  affairs  of  the  corporation,  a  majority  of  them  shall  make,  sign,  and  swear 
to  and  file  in  the  office  of  the  Secretary  of  State  a  further  certificate  stating  that 
the  directors  have  completed  their  duties  in  winding  up  the  affairs  of  such  cor- 
poration and  have  sold  or  collected  all  its  assets  and  distributed  the  same, 
stating  the  mariner  of  such  distribution.  The  Secretary  of  State  shall  examine 
the  same,  and  if  he  finds  it  conforms  to  law,  shall  endorse  his  approval  thereon, 
and  shall  thereupon  record  such  certificate.  When  such  certificate  has  been 
approved  by  the  Secretary  of  State,  the  existence  of  such  corporation  shall 
terminate  (sec.  34).  The  minority  stockholders  owning  one-tenth  of  the 
capital  stock  may  petition  the  court  for  dissolution  (Laws  of  1905,  chap. 
121). 

26.  Foreign  Corporations.  —  Before  a  foreign  corporation  can  transact 
business  in  the  State  it  must  file  in  the  oflice  of  the  Secretary  of  Stale  a  certified 
copy  of  its  charter  or  certificate  of  incorporation,  together  with  a  statement 
signed  and  sworn  to  by  its  president  and  a  majority  of  directors,  showing  the 
amount  of  its  authorized  capital  stock  and  the  amount  thereof  which  has  been 

265 


DIGEST   OF   INCORPORATION   ACTS.  —  CONNECTICUT. 

paid  in,  and  if  any  part  of  such  payment  has  been  made  otherwise  than  in  cash 
such  statement  shall  state  forthwith  the  particulars  thereof  (Public  Acts  of  1907, 
chap.  60).  They  must  also  appoint,  in  writing,  the  Secretary  of  State  to  be  their 
attorney,  upon  whom  process  may  be  sewed  (sees.  83  to  85  inclusive).  Foreign 
corporations  are  required  to  file  annual  reports  similar  to  those  required  of 
domestic  corporations.  The  fee  for  fifing  certified  copy  of  the  charter  is  $10, 
and  a  further  fee  of  $5  is  charged  for  filing  the  statement  required  by  law  (sees. 
SO  to  88  inclusive).  For  filing  appointment  of  Secretary  of  State  as  attorney,  $1. 
Charge  for  filing  annual  report  and  making  certified  copy  thereof  for  purpose 
of  filing  the  same  with  the  town  clerk,  $2.50. 

Farmers'  Loan  &  Trust  Co.  v.  Smith,  74  Conn.  625;  51  Atl.  609. 


266 


DIGEST    OF    INCORPORATION    ACTS.  —  DELAWARE. 


DELAWARE. 

(The  references  cited  below  are  to  the  21  Delaware  Laws  (1899),  chap.  273,  unless  other- 
■wise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Delaware  is  to  be  found  in  an  act  passed  March 
10,  1899,  entitled  "An  Act  providing  a  General  Corporation  Law"  (21  Del. 
Laws,  chap.  273).  This  act  has  been  successively  amended  by  the  Delaware 
legislature  in  1901,  1903,  1905,  and  1907.  Under  it  parties  may  incorporate  for 
any  lawful  business  excepting  banking.  Special  provisions  are  to  be  found 
therein  for  incorporating  railway  companies  for  the  purpose  of  operating  rail- 
ways within  the  State. 

2.  Incorporators. — There  must  be  at  least  three  incorporators.  There 
are  no  residential  requirements  (sec.  1). 

3.  Contents  of  the  Certificate  of  Incorporation  (sec.  5).  —  The  certifi- 
cate of  incorporation  must  set  forth : 

a.  Name.  —  The  name  of  the  corporation  must  contain  one  of  the  words 
"association,"  "company,"  "corporation,"  "club,"  "incorporated,"  "society," 
"union,"  or  "syndicate."  No  name  can  be  employed  which  does  not  serve  to 
distinguish  it  from  that  of  any  other  corporation  engaged  in  the  same  business 
or  promoting  or  carrying  on  the  same  objects  or  purposes  within  the  State. 

b.  Domiciliary  Office.  —  The  name  of  the  city  or  town,  county  or  place 
within  the  county  in  which  the  principal  office  or  place  of  business  is  to  be 
located  in  Delaware,  and  the  name  of  the  resident  agent  (Laws  of  1907, 
chap.  173). 

c.  Purposes.  —  The  nature  of  the  business,  objects,  or  purposes  proposed  to 
be  transacted,  promoted,  or  carried  on.  The  statute  clearly  contemplates  that 
corporations  may  be  organized  for  more  than  one  purpose  not  covered  by  the 
special  acts.  Banking  is  the  only  purpose  forbidden  to  corporations  organized 
under  the  General  Act. 

d.  Capital  Stock.  —  The  amount  of  capital,  which  shall  not  be  less  than 
$2,000,  the  number  of  shares  into  which  the  same  is  divided,  and  the  par  value 
of  each  share,  which  may  be  any  amount,  the  amount  of  capital  stock  with 
which  it  will  commence  business,  which  cannot  be  less  than  $1,000.  If  the  cor- 
poration is  to  have  more  than  one  class  of  stock,  a  description  of  each  class 
must  be  given,  with  the  terms  on  which  the  respective  classes  of  stock  are 
created. 

e.  Incorporators.  —  The  name  and  place  of  residence  of  each  of  the  original 
subscribers  to  the  capital  stock,  who  are  in  practice  the  incorporators  of  the 
company. 

/.  Duration.  —  The  corporation  may  have  perpetual  existence.  If  not,  the 
time  when  the  existence  is  to  commence  and  the  time  when  it  is  to  cease  must 
be  stated. 

g.  Exemption  of  Stockholders  from  Liability  for  Corporate  Debts. — The  cer- 
tificate must  state  whether  the  private  property  of  the  corporation  shall  !>'■  Bub- 
ject  to  the  payment  of  corporate  debts,  and  if  so  to  what  extent. 

h.  Regulation  of  tin-  Internal  Affair*  of  the  Corporation. — The  Certificate 
may  contain  any  provision  desired  for  the  regulation  of  the  business  and  the 

267 


DIGEST    OF    INCORPORATION    ACTS. — DELAWARE. 

conduct  of  the  affairs  of  the  corporation,  the  directors  and  stockholders,  or  any 
classes  of  stockholders  permitted  by  law  (sees.  5,  12,  29,  34).  If  the  business  is 
to  be  conducted  outside  of  the  State,  such  power  must  be  specifically  set  forth 
in  the  certificate  of  incorporation  (sec.  3). 

4.  Statutory  Powers.  —  In  addition  to  the  common  law  powers  which 
are  enumerated  in  the  statute,  Delaware  corporations  have  the  following  addi- 
tional powers :  To  guaranty,  purchase,  hold,  assign,  transfer,  mortgage,  pledge, 
or  otherwise  dispose  of  stock  and  bonds  of  other  corporations,  and  to  exercise 
in  the  case  of  stock  the  right  to  vote  thereon.  Corporations  also  have  power 
to  acquire  and  hold  their  own  shares,  but  not  to  vote  thereon.  To  conduct 
business  in  any  State,  Territory,  or  colony  of  the  United  States  or  in  any  for- 
eign country.  To  issue  stock  for  property  or  services,  and  to  forfeit  stock  for 
non-payment  of  assessments.  To  have  one  or  more  offices  out  of  the  State,  and 
to  hold,  purchase,  mortgage,  convey  real  and  personal  property  out  of  the 
State,  provided  such  powers  are  included  within  the  objects  set  forth  in  the 
certificate  of  incorporation.  To  classify  directors.  The  corporation  also  has 
express  power  to  create  preferred  stock,  if  desired,  provided  this  power  is  set 
forth  in  the  articles  of  incorporation.  The  consolidation  of  corporations  carry- 
ing on  any  kind  of  business  is  expressly  permitted.  Also  to  authorize  voting 
by  proxy,  to  forfeit  stock  for  non-payment  of  assessments,  and  to  cumulate 
votes  in  the  election  of  directors  (sees.  2,  9,  13,  14,  17,  19,  22,  28,  29,  36,  59-66, 
135;  see  also  Laws  of  1905,  chap.  155;  Laws  of  1909,  chap.  154).  Bondholders 
may  be  given,  if  desired,  the  same  voting  powers  as  stockholders  (sec.  29). 

State  ex  rel.  White  v.  Hancock,  2  Pen.  252;  45  Atl.  851. 

5.  Procuring  the  Charter.  —  The  certificate  of  incorporation  must  be 
signed,  sealed,  and  acknowledged  by  each  of  the  original  subscribers  to  the  capi- 
tal stock.  The  original  certificate  of  incorporation  is  then  filed  in  the  office  of 
the  Secretary  of  State,  and  a  certified  copy  thereof  recorded  in  the  office  of  the 
recorder  of  deeds  in  the  county  in  which  the  principal  office  as  stated  in  the 
certificate  of  incorporation  is  located.  When  these  acts  have  been  completed 
and  the  organization  tax  paid  to  the  Secretary  of  State,  the  corporate  existence 
begins  (sees.  5,  6,  7,  11).  Collateral  inquiry  into  legality  of  corporate  existence 
is  forbidden  (sec.  68). 

6.  Corporate  Indebtedness.  —  There  is  no  limit  upon  the  amount  of 
indebtedness  which  a  corporation  may  incur.  Bondholders  may  be  given  the 
right  to  vote  (sec.  29). 

7.  Organization  Tax.  —  The  organization  tax  is  10  cents  for  each  one 
thousand  dollars  of  the  total  amount  of  capital  stock  authorized,  but  in  no 
case  shall  it  be  less  than  $10.  In  cases  where  the  amount  of  the  capital  stock 
of  any  corporation  as  authorized  in  its  original  certificate  of  incorporation,  or 
in  any  amendment  thereof,  shall  exceed  $2,000,000,  the  organization  tax  shall 
be  at  the  rate  of  5  cents  on  each  one  thousand  dollars  of  authorized  capital  in 
excess  of  $2,000,000,  but  in  no  case  less  than  $10  (Laws  of  1907,  chap.  174). 
Whenever  any  certificate  of  increase  of  capital  stock  shall  be  filed,  an  additional 
tax  of  10  cents  on  each  one  thousand  dollars  of  such  increased  capitalization 
shall  be  paid,  but  in  no  case  shall  such  fee  be  less  than  $5.  When  two  or  more 
corporations  shall  consolidate  or  merge,  the  Secretary  of  State  shall  demand 
and  receive  for  the  use  of  the  State  10  cents  on  each  one  thousand  dollars  of 
capital  stock  authorized  or  merged,  but  in  no  case  less  than  $20. 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State  for  receiving, 

268 


DIGEST    OF    INCORPORATION    ACTS.  —  DELAWARE. 

filing,  and  indexing  the  certificate  of  incorporation,  S2  ;  for  recording  certificate 
of  incorporation,  10  cents  per  line;  for  certified  copy  of  the  certificate  of  in- 
corporation, 2  cents  per  line  for  copy,  and  SI  for  attaching  thereto  the  official 
seal.  The  fee  for  this  service  usually  averages  about  S4.50.  For  filing  cer- 
tificate of  dissolution,  change  of  name,  amended  certificate  of  organization,  de- 
crease of  capital  stock,  increase  or  decrease  of  number  of  shares,  $10;  fur 
filing  other  certificates,  So.  Fee  to  the  Recorder  of  Deeds  for  recording  cert  i- 
fied  copy  of  the  certificate  of  incorporation  in  the  local  county  office  where  it 
does  not  exceed  four  pages,  $3.50.  For  each  additional  page,  50  cents  1 1  awa 
of  1909,  chap.  240). 

9.  Commencing  Business.  —  At  least  $1,000  of  the  capital  stock  must  he 
subscribed  for  before  the  corporation  can  begin  business.  If  the  corporate 
business  is  not  begun  in  good  faith  within  two  years  from  the  date  of  the 
incorporation,  the  franchise  is  subject  to  forfeiture  (sees.  5,  67). 

P.  W.  &  B.  R.  R.  Co.  v.  Kent  Co.  R.  R.  Co.,  5  Houst.  127. 

10.  Organization  Meeting.  —  This  may  be  held  either  within  or  without 
the  State  (sec.  30).  The  incorporators  ordinarily  sign  a  written  agreement, 
fixing  the  time  and  place  within  the  State  for  the  organization  of  the  corpora- 
tion.    In  the  absence  of  such  consent,  the  meeting  must  be  called  by  notice 

•  signed  by  a  majority  of  the  incorporators,  and  published  three  times  in  a  local 
newspaper  at  least  two  weeks  before  the  time  of  meeting,  or  by  two  days' 
notice  served  personally  (sec.  11).  The  incorporators  may  be  represented  by 
proxy  if  desired.  Until  the  directors  are  elected  the  signers  of  the  certificate 
of  incorporation  have  by  statute  control  of  the  affairs  and  of  the  organization 
of  the  corporation,  and  may  take  such  steps  as  are  proper  to  obtain  the  neces- 
sary subscriptions  to  stock.  As  soon  as  the  meeting  is  organized  by  the  elect  inn 
of  a  chairman  and  secretary,  by-laws  should  be  adopted.  If  the  certificate  of 
incorporation  so  provides,  the  directors  to  be  elected  at  the  organization  meet- 
ing of  the  corporation  may  adopt  by-laws.  The  incorporators  should  then  pro- 
ceed to  the  election  of  not  less  than  three  directors.  The  directors  must  own  at 
least  three  shares  of  stock,  and  one  must  be  a  resident  of  the  State.  The  by- 
laws may  provide  for  the  election  of  officers  either  by  the  stockholders  or  the 
directors.  If  by  the  stockholders,  the  election  of  the  statutory  officers  should 
be  had  before  the  adjournment  of  the  organization  meeting.  Immediately 
after  the  adjournment  of  the  incorporators'  meeting  the  directors  named  in  the 
articles  of  incorporation  should  meet  and  elect  the  officers  of  the  corporation. 
The  statutory  officers  are  a  president,  secretary,  and  treasurer.  The  president 
must  be  chosen  from  among  the  directors.  The  secretary  and  treasurer  may 
or  may  not  be  the  same  person,  and  if  the  corporation  have  a  vice-president,  he 
may,  if  deemed  advisable  by  the  directors,  hold  the  office  of  vice-president  and 
secretary,  or  vice-president  and  treasurer,  but  not  the  office  of  vice-president, 
secretary,  and  treasurer.  The  directors  may,  if  authorized  by  the  by-laws,  or 
by  a  resolution  passed  by  a  majority  of  the  whole  board,  designate  two  or  mure 
of  their  number  to  constitute  an  executive  commit  tee.  who  shall  have  and 
exercise  all  the  powers  of  the  bund  of  directors  in  the  management  of  t  lie  busi- 
ness affairs  of  the  company.     The  secretary  must  be  sworn  (sees.  7    11). 

11.  Meetings  of  Stockholders  and  Directors.  -■-  The  stockholders  and 
directors  may  hold  their  meetings  outside  of  the  State  if  tin-  by  la  us  so  pro- 
vide.   It  may  be  found  more  convenient  to  hold  the  organizatio eting  within 

the  State  (sees.  30,  32).    As  to  right  of  cumulative  voting,  see  Laws  of  L903, 

269 


DIGEST    OF    INCORPORATION    ACTS.  —  DELAWARE. 

chap.  394,  sec.  17 ;  see  also  Cons.,  Art.  IX.  sec.  6 ;  see  post,  sec.  12.  Voting  may- 
be by  proxy  (sec.  17).  No  shares  can  be  voted  which  have  been  transferred  on 
the  books  of  the  company  within  twenty  days  next  preceding  the  election 
(sees.  17,  29). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  a  board  of  directors  of  not  less  than  three  in  number,  one  of  whom 
must  be  a  resident  of  the  State.  The  directors  must  hold  at  least  three  shares 
of  stock.  They  may  be  divided  into  classes  if  desired.  Power  may  be  given 
the  directors  to  adopt  by-laws  for  the  corporation,  by  inserting  such  a  provi- 
sion in  the  certificate  of  incorporation  (sees.  9,  12,  30).  It  is  a  mooted  ques- 
tion whether  cumulative  voting  is  permissible  under  the  Laws  of  Delaware. 
Under  the  Constitution,  Art.  IX.  sec.  6,  each  stockholder  is  declared  to  be 
entitled  to  one  vote  for  each  share  of  stock  he  may  hold,  but  under  the  Laws 
of  1903,  chap.  394,  sec.  17,  it  is  provided  that  at  every  meeting  of  stockholders, 
each  stockholder,  whether  resident  or  non-resident,  shall,  unless  otherwise  pro- 
vided in  the  charter  or  by-laws,  be  entitled  to  one  vote  in  person  or  by  proxy  for 
each  share  of  capital  stock  held  by  him  (Laws  of  1903,  chap.  394,  sec.  17).  Di- 
rectors have  power  to  designate  two  or  more  of  their  number  to  act  as  an  execu- 
tive committee  (sec.  9). 

b.  Liabilities.  —  Directors  are  disqualified  from  re-election  to  office  in  case 
they  fail  to  make  and  file  the  annual  report  required  by  law  (Laws  of  1906, 
chap.  1).  Directors  who  knowingly  cause  to  be  published  or  give  out  any 
written  statement  or  report  of  the  corporate  business  or  condition  that  is  false 
in  any  material  respect,  are  jointly  and  severally  liable  for  any  loss  or  damage 
resulting  therefrom.  Non-dissenting  directors  are  also  liable  for  declaring  divi- 
dends not  earned  or  for  the  illegal  distribution  of  capital  stock  (sees.  35,  37). 
They  are  also  liable  for  refusing  to  make  certificate  of  full  paid  capital  stock  upon 
written  request  of  any  creditor  or  stockholder  (sec.  23).  Directors  are  liable 
for  failure  to  publish  certificate  of  reduction  of  capital  stock  to  the  extent 
that  they  are  personally  liable  for  the  corporate  debts  contracted  during  such 
default  (sec.  28).  Directors  are  liable  for  loans  made  to  officers  of  the  corpora- 
tion or  to  stockholders  upon  the  security  of  its  stock  (sec.  36).  Directors  neglect- 
ing or  failing  to  have  alphabetical  list  of  stockholders  produced  at  election  are 
ineligible  to  re-election  to  any  office  thereat  (sec.  29). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  only  liable  for  their 
unpaid  stock  subscriptions  (sees.  20,  28). 

14.  Stock  Certificate.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  the  president  and  treasurer.  The  par  value 
of  stock  certificates  may  be  any  amount  (sees.  15,  29). 

15.  Preferred  Stock.  —  Corporations  have  the  power  to  create  two  or 
more  kinds  of  stock  with  such  preferences  and  voting  powers  and  with  such 
restrictions  or  qualifications  thereof  as  shall  be  stated  or  expressed  in  the  cer- 
tificate of  incorporation.  The  preferred  stock,  however,  must  not  exceed  two- 
thirds  of  the  actual  capital  paid  in  in  cash  or  property.  The  preferred  stock 
may,  if  desired,  be  made  subject  to  redemption  at  not  less  than  par  at  a  fixed 
time  and  place  to  be  fixed  in  the  certificate  of  incorporation.  Preferred  stock- 
holders shall  be  entitled  to  receive  a  fixed  yearly  dividend  to  be  expressed  in 
the  certificate,  not  exceeding  eight  per  cent  payable  quarterly,  half  yearly,  or 
yearly.  Such  dividends  may  be  made  cumulative.  Preferred  stock  cannot 
be  created  unless  provided  for  in  the  original  certificate  or  amended  certificate 
of  incorporation.     Corporations  are  authorized  to  issue  bonds  and  to  confer 

270 


DIGEST    OF    INCORPORATION    ACTS.  —  DELAWARE. 

upon  the  holders  thereof  the  power  to  vote  in  reaped  to  t he  corporate  affairs 
and  management  of  the  company,  to  the  same  extent  and  in  the  same  manner 
as  stockholders,  if  sojprovided  in  the  certificate  of  incorporation  (sees.  5,  13,  29). 

16.  Payment  of  Capital  Stock.  —  The  Delaware  Constitution  provides 
(Cons.,  Art.  IX.  sec.  3)  that  no  corporation  shall  issue  stock  except  for  money 
paid,  labor  done,  or  personal  property  or  real  property  or  leases  thereof,  actu- 
ally acquired  by  such  corporation,  and  no  labor  or  property  shall  be  received 
in  payment  of  stock  at  a  greater  price  than  the  actual  value  at  the  time  the 
said  labor  was  done  or  property  delivered  or  title  acquired.  By  statute,  how- 
ever, it  is  provided  that  subscriptions  to  and  purchase  of  the  capital  stock  of 
any  corporation  organized  under  any  law  of  this  State  may  be  paid  for  wholly 
or  partly  by  cash,  by  labor  done,  by  personal  property,  or  by  real  property  or 
leases  thereof ;  and  the  stock  so  issued  shall  be  declared  and  taken  to  be  fully 
paid  stock  and  not  liable  to  any  further  call,  nor  shall  the  holder  thereof  be 
liable  for  any  further  payments  thereon  under  the  provisions  of  this  act.  In 
the  absence  of  actual  fraud  in  the  transaction  the  judgment  of  the  directors 
as  to  the  value  of  such  labor,  property,  real  estate,  and  leases  thereof  shall  he 
conclusive  (Laws  of  1905,  chap.  155). 

Every  corporation  may  at  any  meeting  increase  its  capital  stock  and  the 
number  of  shares  thereof  until  it  shall  reach  the  amount  named  in  the  original 
certificate  (sec.  27).  The  president,  with  the  secretary  or  treasurer,  shall,  upon 
the  written  request  of  any  creditor  or  stockholder,  make  a  certificate  stating 
the  amount  of  the  instalments  or  calls  paid  in  cash  or  by  the  purchase  of  prop- 
erty, and  stating  also  the  total  amount  of  capital  stock  issued,  which  certificate 
shall  be  signed  and  sworn  to  by  the  president  and  secretary  or  treasurer,  and 
shall  within  thirty  days  after  the  making  thereof  be  filed  in  the  office  of  the 
Secretary  of  State. 

17.  Books.  —  The  original  or  duplicate  stock  ledger  containing  the  names 
and  addresses  of  the  stockholders  and  the  number  of  shares  held  by  them 
respectively  must  be  kept  at  the  principal  office  within  the  State.  These  are 
open  to  the  inspection  of  stockholders.  The  general  books  of  account  need 
not  be  kept  within  the  State  (sec.  29). 

18.  Office.  —  The  corporation  must  maintain  a  principal  office  or  place 
of  business  in  the  State,  and  have  an  agent,  a  resident  of  the  State,  in  charge 
thereof.  A  sign  containing  the  name  of  the  corporation  must  be  displayed  at 
a  conspicuous  place  in  said  office  (sees.  32,  33,  137). 

19.  Annual  Reports.  —  On  or  before  the  first  Tuesday  in  January  of 
each  year  it  shall  be  the  duty  of  the  president,  treasurer  or  other  officer  of  any 
two  directors  of  any  domestic  corporation  to  file  with  the  Secretary  of  State 
an  annual  report  stating  the  location  within  the  state  of  the  principal  office  and 
the  name  of  the  agent  upon  whom  service  of  process  against  such  corporation 
may  be  served,  the  location  or  locations  (town  or  towns,  city  or  cities,  stating 
the  street  and  number,  if  numbers  there  be)  of  the  place  or  places  of  business 
of  such  company  without  the  State  of  Delaware  ;  the  names  and  addresses  of  all 
the  directors  and  officers  of  the  company  and  when  the  term  of  each  expires, 
the  date  appointed  for  the  next  annual  meeting  of  stockholders  lor  the  election 
of  directors,  the  amount  of  its  authorized  capital,  the  amount  actually  paid  in, 
the  amount  invested  in  real  estate,  taxes  annually  thereon,  t  he  amount  invested 
in  manufacturing  or  mining  in  Delaware  or  both  ;  if  such  report  is  not  so  made 
and  so  filed  the  corporation  shall  forfeit  to  the  State  the  sum  of  $200,  t<>  be 
recovered  with  costs  in  an  action  of  debt  to  be  prosecuted  by  the  Attorney 

_'7I 


DIGEST    OF    INCORPORATION    ACTS. DELAWARE. 

General,  and  provided  further  that  if  such  report  shall  not  be  made  and  filed, 
all  the  directors  of  any  such  corporation  who  shall  wilfully  refuse  to  comply 
with  the  provisions  thereof  and  who  shall  be  in  office  during  the  default  shall 
at  the  time  appointed  for  the  next  election  and  for  a  period  of  one  year  there- 
after be  thereby  rendered  ineligible  for  election  or  appointment  to  any  office 
in  the  company  as  directors  or  officers  (Laws  of  1906,  chap.  1).  On  written 
request  of  any  director  or  stockholder,  the  officers  of  the  corporation  must  file 
with  the  Secretary  of  State  certificate  showing  amount  of  stock  issued  and 
paid  for  in  cash  or  property  and  the  total  amount  of  capital  stock  issued 
(sec.  23). 

20.  Anti-Trust  Statute.  —  There  is  none  in  force  within  the  State. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  statutory 
grounds  for  forfeiture  of  charter  are  failure,  for  two  years  after  the  corpora- 
tion is  created,  to  commence  in  good  faith  the  business  to  be  promoted  ot 
the  objects  or  purposes  for  which  it  was  organized.  Also  failure  for  two  suc- 
cessive  years  to  pay  the  State  tax  assessed  against  it,  which  it  is  required  to 
pay  under  the  law,  renders  the  charter  void  (sec.  67 ;  Tax  Law,  sees.  10,  11). 

22.  Amendments.  —  The  incorporators,  before  the  payment  of  any  part  of 
the  authorized  capital  stock  of  the  corporation,  may  file  with  the  Secretary  of 
State  an  amended  certificate  duly  signed  by  all  of  the  incorporators  amending 
the  original  certificate  of  incorporation  in  whole  or  in  part.  A  copy  of  such 
certificate,  duly  certified  by  the  Secretary  of  State,  must  then  be  recorded  in 
the  office  of  the  recorder  of  the  county  in  which  the  original  certificate  of  in- 
corporation was  recorded.  Such  amended  certificate  shall  thereupon  take  the 
place  of  the  original  certificate  of  incorporation  (sec.  25).  Certificates  of  in- 
corporation may  be  amended  when  and  as  desired  either  by  addition  to  its 
corporate  powers  and  purposes  or  diminution  thereof,  or  by  the  substitution 
of  other  powers  and  purposes  in  whole  or  in  part  for  those  prescribed  by  its 
charter,  or  by  increasing  or  decreasing  its  authorized  capital  stock,  or  by  chang- 
ing the  number  and  par  value  of  the  shares  of  its  capital  stock,  or  by  changing 
the  corporate  name,  or  by  making  any  other  change  that  may  be  desired,  in 
manner  following,  to  wit : 

The  board  of  directors  shall  first  adopt  a  resolution  setting  forth  the  amend- 
ment proposed-,  declaring  its  advisability,  and  calling  a  meeting  of  the  stock- 
holders for  consideration  thereof.  The  meeting  shall  be  called  and  held  upon 
notice  as  provided  for  by  the  corporation's  charter  or  by-laws.  At  «uch  meet- 
ing a  vote  of  the  stockholders  in  person  or  by  proxy  shall  be  taken  for  and 
against  the  proposed  amendment,  which  vote  shall  be  conducted  by  two  judges 
appointed  for  that  purpose  either  by  the  directors  or  by  the  said  meeting.  The 
judges  are  given  plenary  powers,  and  they  are  required  to  make  out  certificates 
in  duplicate  stating  the  number  of  shares  of  stock,  voting  for  and  against  the 
amendment,  and  subscribing  and  delivering  the  same  to  the  secretary  of  the 
corporation.  If  it  shall  appear  by  such  certificates  of  the  judges  that  the  persons 
holding  a  majority  of  the  stock  of  the  corporation  or  of  each  class  of  stock,  if 
there  be  more  than  one,  have  voted  in  favor  of  the  amendment,  thereupon  the 
said  corporation  shall  make  under  its  corporate  seal  and  the  hands  of  its  presi- 
dent and  secretary  a  certificate  accordingly,  and  the  president  shall  duly  execute 
and  acknowledge  the  same  with  one  of  the  judge's  duplicate  certificates  attached, 
which  shall  be  filed  in  the  office  of  the  Secretary  of  State,  and  a  copy  thereof 
certified  by  said  Secretary  of  State  shall  be  recorded  in  the  office  of  the  recorder 
of  the  county  in  which  the  original  certificate  of   incorporation  is  recorded. 

272 


DIGEST    OF    INCORPORATION    ACTS.  —  DELAWARE. 

No  corporation,  however,  can  decrease  its  capital  stock  without  paying  or 
adequately  securing  such  of  its  del  its  as  are  not  then  fully  secured  (G.  C.  L., 
sec.  26,  as  amended  by  Laws  of  1909,  chap.  155).  (See  also  sees.  27  aiul  28,  as 
to  increase  and  reduction  of  capital  paid  in.) 

The  board  of  directors  of  any  corporation  may  change  the  location  of  the 
principal  office  of  any  corporation  within  the  State  to  any  other  place  within 
the  State  by  resolution  adopted  at  a  regular  or  special  meeting  of  said  board. 
Upon  the  adoption  of  such  resolution  a  copy  thereof  shall  be  filed  in  the  office 
of  the  Secretary  of  State  by  the  president  or  secretary  of  such  corporation  and 
sealed  with  its  corporate  seal ;  a  certified  copy  of  such  resolution  shall  also  be 
recorded  in  the  office  of  the  recorder  of  the  county  to  which  such  principal 
office  is  removed.  For  filing  such  certificate  the  Secretary  of  State  shall  charge 
a  fee  of  So  (sec.  137). 

If  it  is  desired  to  decrease  the  issued  capital  stock  without  changing  the 
amount  of  authorized  capital  stock,  this  may  be  effected  by  the  vote  or  written 
consent  of  two-thirds  in  interest  of  the  stockholders  (see  sec.  28).  Such  re- 
duction may  be  carried  into  effect  by  retiring  or  reducing  any  class  of  the  stock 
or  by  drawing  the  necessary  number  of  shares  by  law  for  retirement,  or  by 
decreasing  the  number  of  shares  of  each  shareholder,  or  by  the  purchase  at  not 
less  than  par  of  certain  shares  for  retirement  or  by  retiring  the  shares  owned  by 
the  corporation  or  by  reducing  the  par  value  of  shares.  No  such  reduction 
shall  be  made  until  the  corporate  debts  are  fully  secured  or  have  been  paid  and 
discharged  (sec.  28). 

23.  Annual  Franchise  Tax.  —  The  annual  franchise  tax  on  the  amount 
of  the  authorized  capital  stock  up  to  and  including  §25,000,  is  $5  ;  on  all  author- 
ize! capital  stock  exceeding  $25,000,  and  not  more  than  $100,000,  $10;  on 
authorized  capital  stock  exceeding  $100,000,  and  not  more  than  $300,000,  $20; 
on  authorized  capital  stock  exceeding  $300,000,  and  not  more  than  $500,000, 
$25 ;  on  authorized  capital  stock  exceeding  $500,000,  and  not  more  than 
$1,000,000,  $50;  and  a  further  sum  of  $25  a  year  on  each  $1,000,000  or  part 
thereof  in  excess  of  $1,000,000;  provided  that  such  corporation  shall  only  be 
required  to  pay  one-half  of  the  amount  of  taxes  here  enumerated  in  cases  where 
they  show  in  their  annual  report  that  they  are  not  engaged  in  any  business,  but 
in  no  case  shall  the  amount  of  taxes  be  less  than  $5  a  year.  This  tax  is  pay- 
able on  May  1st  of  each  year  (Laws  of  1907,  chap.  47).  Manufacturing  or 
mining  companies  as  well  as  mercantile  companies  whose  capital  actually  paid 
in  is  invested  in  a  mercantile  business  carried  on  within  the  State  and  which  is 
now  subject  to  a  license  tax  for  the  carrying  on  of  such  business  under  chapter 
117,  Vol.  13,  Laws  of  Delaware,  and  all  corporations  at  least  fifty  per  cent  of 
whose  capital  stock  issued  and  outstanding  is  invested  in  business  carried  on 
within  the  State,  are  exempt  from  the  payment  of  such  license  tax  (Laws  of 
1903,  chap.  17).  If  any  other  corporation  shall  have  less  than  fifty  per  cent  of 
its  capital  stock  issued  and  outstanding  invested  in  business  carried  on  within 
the  State  it  shall  pay  the  annual  license  tax  or  franchise  tax  provided  for  com- 
panies not  carrying  on  business  in  this  State,  but  shall  be  entitled  in  the  compu- 
tation of  such  tax  to  a  deduction  from  the  amount  of  its  capital  stock  issued 
and  outstanding  of  the  assessed  value  of  its  real  or  personal  estate  within  this 

State  (22  Del.   Laws.  chap.  259;    Laws  of   L903,  chap.    17). 

24.  Extension  of  Corporate  Existence.  —  Corporate  existence  may  be 
extended  by  complying  with  the  terms  of  the  statute  in  such  case  made  and 
provided  (sees.  131-134).    (See  also  Laws  of  190.),  chap.  166.) 

18  273 


DIGEST    OF    INCORPORATION    ACTS.  —  DELAWARE. 

25.  Dissolution.  —  Before  payment  of  any  part  of  the  capital  stock  or 
beginning  business  the  incorporators  may  surrender  their  franchises  by  filing 
in  the  office  of  the  Secretary  of  State  a  certificate  verified  by  a  majority  of  the 
incorporators  to  the  effect  that  no  part  of  the  capital  has  been  paid  and  that 
such  business  has  not  been  begun.  After  the  paying  in  of  the  capital  stock 
a  majority  vote  of  the  directors  cast  in  favor  of  the  dissolution  of  the  corpora- 
tion, coupled  with  the  written  consent  of  two-thirds  in  interest  of  the  stock- 
holders, affords  the  necessary  basis  for  a  dissolution  of  the  corporation  by 
consent.  In  addition  to  this,  notice  of  the  stockholders'  meeting,  called  for 
the  purpose  of  voting  upon  the  question  of  dissolution,  must  be  published  for 
four  successive  weeks.  The  consent  of  the  directors  and  officers  must  be  certified 
by  the  president,  secretary,  and  treasurer  and  filed  with  the  Secretary  of  State, 
who  issues  his  certificate  that  such  consent  has  been  filed,  which  certificate  must 
be  published  for  four  consecutive  weeks.  If  all  the  stockholders  consent  in 
writing,  no  meeting  or  notice  is  required  (sees.  38-58). 

Com.  Bank  v.  Lockwood's  Adm'r,  2  Harr.  8. 

26v  Foreign  Corporations.  —  Before  doing  business  within  the  State, 
foreign  corporations  are  required  to  file  with  the  Secretary  of  State  a  certified 
copy  of  their  certificate  of  incorporation,  the  name  of  the  authorized  agent 
within  the  State,  a  sworn  statement  of  assets  and  liabilities,  and  must  pay  to  the 
Secretary  of  State  a  license  fee  of  $50.  Thereupon  the  Secretary  of  State 
issues  a  certificate  of  authority  to  transact  business  within  the  State.  The  law 
imposes  a  duty  upon  the  Secretary  of  State  after  issuing  the  certificate  afore- 
said to  issue  a  certificate  to  the  prothonotary  of  the  Superior  Court  in  each 
county  of  the  State  of  Delaware,  containing  the  name  of  the  agent  of  such  foreign 
corporation  and  the  State  wherein  incorporated.  This  certificate  is  then  filed  by 
such  prothonotary  in  his  office.  For  this  service  the  law  provides  that  he  shall 
receive  a  fee  of  $1,  to  be  collected  from  each  corporation  by  the  Secretary  of 
State  and  paid  over  by  that  official  to  the  prothonotary  (Laws  of  1903,  chap. 
395 ;  Cons.,  Art.  IX.  sec.  5 ;  as  to  penalties  for  non-compliance  with  the  law, 
see  Laws  of  1903,  chap.  395,  sec.  6).  Section  9  of  the  tax  law  provides  that 
foreign  corporations  doing  business  in  Delaware  shall  be  subject  to  what  is 
known  as  the  retaliatory  tax  law.  This  act  provides  that  when  by  the  laws  of 
any  other  State  any  other  or  greater  taxes,  licenses,  etc.,  are  imposed  upon 
corporations  of  this  State  doing  business  in  such  other  State,  than  the  laws  of 
this  State  impose  upon  foreign  corporations  doing  business  in  this  State,  so  long 
as  such  laws  continue  in  force  in  such  foreign  State  the  same  taxes,  licenses,  etc., 
shall  be  imposed  upon  all  corporations  of  such  other  States  doing  business 
within  this  State.  Foreign  corporations  must  pay  a  filing  and  recording  fee 
of  $10  in  all  cases  (Tax  Law,  sec.  9).  No  annual  reports  are  required  of 
foreign  corporations  and  they  are  not  subject  to  the  payment  of  any  annual 
franchise  tax. 

Deringer's  Adm'r  v.  Deringer's  Adm'r,  5  Houst.  416;  Standard  Sewing  Machine  Co.  v. 
Frame,  2  Pen.  430;    48  Atl.  188;    Love  v.  P.  &  J.  Co.,  3  Pen.  577;    52  Atl.  542. 


274 


DIGEST    OF    INCORPORATION    ACTS. — DISTRICT    OF    COLUMBIA. 


DISTRICT   OF   COLUMBIA. 

(The  references  are  to  the  District  of  Columbia  Code  (1902),  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  in  force  in  the  District  of  Columbia  is  to  be  found 
in  the  United  States  Statutes  at  Large,  Vol.  31,  pp.  1284  et  seq.,  as  amended 
by  the  Acts  of  January  31,  1902  (U.  S.  Stat,  at  L.,  Vol.  32,  p.  2),  and  Act  of  June 
30,  1902  (U.  S.  Stat,  at  L.,  Vol.  32,  pp.  533  et  seq.).  Under  this  act  companies 
may  be  formed  for  the  purpose  of  carrying  on  any  business  or  enterprise  which 
may  be  lawfully  conducted  by  an  individual,  excepting  banks,  corporations 
formed  to  buy,  sell,  or  deal  in  real  property,  railways,  and  such  other  enterprises 
or  business  as  are  provided  for  by  special  acts. 

2.  Incorporators. — There  must  be  at  least  three  incorporators.  There 
are  no  residential  requirements  (sec.  605). 

3.  Contents  of  the  Certificate  of  Incorporation  (sec.  606).  The  cer- 
tificate must  set  forth : 

a.  Name.  —  The  act  forbids  the  employment  of  a  name  already  in  use 
(sec.  604). 

b.  Purposes.  —  Object  for  which  it  is  formed.  The  recorder  of  deeds  only 
permits  the  insertion  of  one  line  of  business  in  the  certificate  of  incorporation. 
(See  sees.  605,  612.) 

c.  Duration.  —  May  be  perpetual  if  desired. 

d.  Capital  Stock.  —  Amount  thereof  and  the  number  of  shares.  Both  may 
be  any  amount  desired. 

e.  Trustees.  —  The  number  of  trustees  who  shall  manage  the  concerns  of 
the  company  for  the  first  year  and  their  names.  The  recorder  of  deeds  requires 
that  the  citizenship  of  each  of  the  trustees  shall  be  set  forth  in  the  certificate. 

/.  Domiciliary  Office.  —The  name  of  the  place  in  the  District  in  which  the 
operations  of  the  company  are  to  be  carried  on.  The  recorder  of  deeds  requires 
that  the  post-office  address  of  the  place  of  business  of  the  corporation  shall  also 
be  given. 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers  the  act  authorized  voting  by  proxy ;  also  forfeiture  of  stock 
for  non-payment  of  assessments.  The  statute  expressly  forbids  the  purchase 
to  stock  in  other  corporations.  Power  to  adopt  by-laws  is  conferred  upon  the 
trustees  (sees.  397,  607,  609,  612,  613). 

Scanlon  v.  Snow,  2  D.  C.  App.  Cases,  137. 

5.  Procuring  the  Charter.  —  No  proper  understanding  of  the  Business 
Corporation  Act  in  force  in  the  District  of  Columbia  can  be  obtained  without 
a  careful  reading  of  the  case  of  Dancy  v.  Clark  et  al.,  24  D.  C.  App.  Cas.  487, 
wherein  the  Court  of  Appeals  of  the  District  of  Columbia  made  the  following 
holding:  (1)  That  while  the  recorder  of  deeds  in  the  District  is  a  ministerial 
officer,  without  jurisdiction  to  pass  upon  the  validity  of  certificates  of  incor- 
poration  presented  to  him  for  record,  that  nevertheless  he  is  not  wholly  \\  ithoul 
jurisdiction  in  determining  whether  a  given  certificate  shall  be  admitted  fco 
record  or  not.  The  court  held  that  he  had  the  right  to  exercise  discretion  in  the 
premises,  but  not  judicial  discretion.     (2)   The  court  held  that  only  one  kind 

275 


DIGEST    OF    INCORPORATION    ACTS. DISTRICT    OF    COLUMBIA. 

of  business  may  be  included  in  the  designation  of  purposes  for  which  any  specific 
corporation  is  formed.  (3)  The  court  held  that  inasmuch  as  the  statute  re- 
quires that  all  the  trustees  must  be  stockholders,  that  therefore  each  of  the 
trustees  named  in  the  certificate  of  incorporation  must  join  in  the  execution 
of  the  certificate,  thus  in  effect  requiring  that  all  the  trustees  must  be  incorpora- 
tors.   The  reasoning  by  which  the  court  arrived  at  this  conclusion  was  as  follows : 

That  the  incorporators  must  be  regarded  as  the  only  stockholders  of  the 
corporation,  and  that  therefore  the  trustees,  being  necessarily  by  reason  of  their 
positions  stockholders,  must  on  incorporation  be  selected  from  the  original 
incorporators.  The  court  further  held  that  the  only  extension  of  business 
permissible  by  amendment  of  the  certificate  of  incorporation  is  to  extend  the 
business  of  the  corporation  to  some  business  cognate  to  the  business  for  which 
the  company  was  originally  incorporated. 

Finally,  the  court  held  that  the  powers  inserted  in  the  certificate  not  author- 
ized by  law  must  be  regarded  as  surplusage. 

The  certificate  of  incorporation  must  be  subscribed  and  acknowledged  by 
each  of  the  incorporators.  It  must  then  be  filed  in  the  office  of  the  recorder  of 
deeds  for  the  District  (sec.  605).  Under  the  Act  of  February  4,  1905,  the  cer- 
tificate of  incorporation  must  be  accompanied  by  proof  satisfactory  to  the 
recorder  of  deeds,  that  all  the  stock  of  the  said  company  has  been  subscribed 
for  in  good  faith,  and  that  not  less  than  ten  per  cent  of  the  par  value  of  the  stock 
has  been  actually  paid  in  cash,  and  the  money  derived  therefrom  is  then  in  the 
possession  of  the  person  named  as  the  first  board  of  trustees.  The  proof  required 
by  the  recorder  of  deeds  is  that  the  requirements  above  set  forth  have  been 
complied  with.  That  is,  first,  a  statement  of  the  trustees  named  in  the  cer- 
tificate that  all  of  the  capital  stock  of  the  proposed  company  has  been  subscribed 
for  in  good  faith  and  that  not  less  than  ten  per  cent  of  the  par  value  thereof 
has  been  actually  paid  for  in  cash,  and  that  the  money  derived  therefrom  is  in 
the  possession  of  the  persons  named  as  the  first  board  of  trustees  of  the  cor- 
poration ;  and,  secondly,  a  certificate  made  by  one  of  the  executive  officers  of 
some  reputable  bank  or  trust  company,  that  said  sum  in  cash  is  on  deposit  in 
said  bank  or  trust  company  to  the  credit  of  the  said  trustees.  The  recorder 
furnishes  blank  forms  for  this  purpose. 

6.  Corporate  Indebtedness.  —  By  implication  the  debts  should  not  at 
any  time  exceed  the  amount  of  capital  stock  (sec.  634). 

7.  Organization  Tax.  —  All  corporations  must  pay  to  the  recorder  of 
deeds  at  the  time  of  the  filing  of  the  certificate  of  incorporation  40  cents  on 
each  $1,000  of  the  capital  stock  of  the  corporation  as  set  forth  in  the  certificate 
of  incorporation ;  provided,  however,  that  no  fee  shall  be  paid  less  than  $25 
(sec.  552 ;   see  Act  of  Congress  approved  February  4,  1905). 

8.  Filing  and  Recording  Fees.  —  To  the  recorder  of  deeds,  50  cents  for 
the  first  two  hundred  words  in  articles  of  incorporation;  15  cents  for  each 
hundred  words  in  addition  thereto ;  extra  charge  of  25  cents  for  each  separate 
acknowledgment  over  one.  For  each  certificate  and  seal,  25  cents.-  For  certified 
copies  of  certificate  of  incorporation,  50  cents  for  the  first  two  hundred  words 
and  15  cents  for  each  additional  one  hundred  words ;  for  affixing  certificate  and 
seal  thereto,  25  cents  (U.  S.  Stat.,  Vol.  31,  p.  1276). 

9.  Commencing  Business.  —  Business  may  be  commenced  as  soon  as  the 
articles  are  executed  and  filed  as  required  by  law.  Before  business  can  be 
transacted  ten  per  cent  of  the  capital  stock  must  be  paid  in,  either  in  money 
or  property  at  its  actual  value  (sec.  613).     Within  thirty  days  after  the  pay- 

276 


DIGEST    OF    INCORPORATION    ACTS. DISTRICT    OF    COLUMBIA. 

ment  of  the  last  instalment  of  the  capital  stock  the  president  and  a  majoritv 
of  the  trustees  must  make,  verify,  and  record  in  the  office  of  the  recorder  of 
deeds  a  certificate  stating  the  amount  of  capital  fixed  by  the  certificate  and 
paid  in  (sec.  616). 

10.  Organization  Meeting. — The  organization  meeting  must  be  held 
within  the  District  (this  in  the  absence  of  any  statute  expressly  authorizing  such 
meeting  to  be  held  without  the  District). 

11.  Meetings  of  Stockholders  and  Trustees.  —  Stockholders'  meetings 
must  be  held  within  the  District.  Owing  to  the  provision  that  a  majority  of 
the  trustees  must  be  residents  of  the  District,  it  is  in  practice  almost  a  neces- 
sity to  hold  trustees'  meetings  in  the  District,  where  a  majority  of  the  body  is 
required  to  be  present.  In  practice,  however,  through  the  expedient  of  the  ap- 
pointment of  an  executive  committee,  composed  of  a  majority  of  the  board  of 
trustees  to  whom  is  delegated  all  the  powers  of  the  full  board  in  the  transaction 
of  the  business  outside  of  the  District  of  Columbia,  meetings  of  the  trustees 
who  are  members  of  an  executive  committee  can  be  held  outside  of  the  District. 
Notice  of  the  holding  of  annual  meetings  for  the  election  of  trustees  must  be 
published  in  the  District  not  less  than  thirty  days  previous  thereto  (sees.  608, 
609). 

12.  Trustees'  Qualifications  and  Liabilities.  —  a.  Qualifications.  There 
must  be  not  less  than  three,  nor  more  than  fifteen  trustees,  who  shall  be  stock- 
holders, and  a  majority  citizens  of  the  District  (sees.  608,  609,  612). 

b.  Liabilities.  —  Trustees  are  jointly  and  severally  liable  for  making  false 
certificates  or  reports,  knowing  the  same  to  be  false,  which  liability  extends 
to  all  debts  of  the  company  contracted  while  acting  as  such  trustees  (sees.  618, 
619,  631).  Non-dissenting  trustees  are  liable  for  loans  of  money  upon  the  secu- 
rity of  the  company's  own  stock.  They  are  also  liable  for  illegal  declaration  of 
dividends  (sees.  621-623). 

13.  Stockholders'  Liabilities.  —  All  stockholders  are  severally  liable  to 
the  creditors  of  the  corporation  for  the  unpaid  amount  due  on  the  shares  of 
stock  held  by  them  respectively,  for  all  debts  and  contracts  made  by  the  cor- 
poration until  the  whole  amount  of  the  capital  stock  of  said  company  shall  have 
been  paid  in,  and  a  certificate  thereof  shall  have  been  made  and  recorded.  This 
certificate,  signed  and  sworn  to  by  a  majority  of  the  trustees  and  the  president, 
must  within  thirty  days  after  the  payment  of  the  last  instalment  of  the  capital 
stock  be  recorded  in  the  office  of  the  register  of  deeds  of  the  District  (sees.  615, 
616). 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
showing  the  number  of  shares  owned  by  him,  signed  by  such  officers  as  the 
by-laws  may  prescribe. 

15.  Preferred  Stock.  —  There  is  no  express  provision  authorizing  the  issu- 
ance of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  paid  for  in  money  or 
property  at  its  actual  cash  value  (sec.  613). 

17.  Books.  —  The  stock  register  must  be  kept  within  the  District  of  Co- 
lumbia. This  is  open  to  the  inspection  of  stockholders  and  creditors  (sees.  (L'7, 
628;  see  also  sees.  631,  632). 

18.  Office.  —  Every  corporation  must  maintain  an  office  at  all  times  within 
the  District  (sec.  606). 

19.  Reports.  —  Every  corporation  shall  annually  within  twenty  days 
from  the  1st  of  January  make  a  report,  which  must  he  published  in  a  news- 

277 


DIGEST    OF    INCORPORATION    ACTS.  —  DISTRICT    OF    COLUMBIA. 

paper  published  in  the  District,  stating  the  amount  of  capital  and  the  propor- 
tion actually  paid  and  the  amount  of  existing  debts,  which  report  shall  be 
signed  by  the  president  and  a  majority  of  the  trustees  and  verified  by  the  oath 
of  the  president  or  secretary  of  the  company  and  filed  in  the  office  of  the  re- 
corder of  deeds  of  the  District.  The  only  penalty  for  failure  to  make  this  report 
is  that  any  creditor  of  the  corporation  may,  by  petition  for  mandamus  against 
the  corporation,  compel  such  publication  to  be  made,  and  in  such  case  the  court 
shall  require  the  corporation  to  pay  all  expenses  of  the  proceeding  including 
counsel  fees.  If  any  false  report  is  made,  all  officers  who  have  signed  the  same 
knowing  it  to  be  false  are  individually  liable  for  all  debts  of  the  company  con- 
tracted while  they  are  stockholders  or  officers  thereof  (sees.  617,  618). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  specially  appli- 
cable to  the  District  of  Columbia. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  act  specifi- 
cally provides  for  forfeiture  of  charters  when  the  corporation  has  been  guilty  of 
misuse,  abuse,  or  non-user  of  its  corporate  powers  and  franchises  of  such  viola- 
tion of  law  as  would  authorize  and  make  proper  the  forfeiture  thereof  (sec. 
786). 

See  Gilbert  v.  Endowment  Ass'n,  10  D.  C.  App.  316. 

22.  Amendments.  —  Articles  may  be  amended  only  for  the  purpose  of  in- 
creasing or  decreasing  the  capital  stock,  or  for  the  purpose  of  extending  or 
changing  its  business.  This  may  be  accomplished  in  the  following  manner: 
Before  the  corporation  shall  be  entitled  to  diminish  the  amount  of  its  capital 
stock  it  must  first  diminish  the  amount  of  its  debts  and  liabilities  so  that  they 
shall  not  exceed  such  diminished  amount  of  capital.  To  increase  or  diminish 
the  capital  stock  or  to  extend  or  change  the  business,  a  majority  of  the  trustees 
shall  publish  notice  in  a  newspaper  in  the  District  at  least  three  successive 
weeks  and  depositing  a  notice  of  such  meeting  in  the  post-office  addressed  to 
each  stockholder  at  his  usual  place  of  residence  at  least  three  weeks  to  the 
date  fixed  upon  for  holding  such  meeting,  specifying  the  object  of  the  meeting 
and  the  time  and  place  where  such  meeting  shall  be  held.  At  this  meeting 
stockholders  must  appear  either  in  person  or  by  proxy,  representing  not  less 
than  two-thirds  of  all  of  the  shares  of  stock  of  the  corporation.  If  after  organi- 
zation at  said  meeting  and  canvassing  the  votes  it  appears  that  the  votes  of 
two-thirds  of  the  capital  stock  have  been  cast  in  favor  of  increasing  or  diminish- 
ing the  amount  of  capital  or  extending  or  changing  the  business  of  the  company, 
a  certificate  of  the  proceedings,  showing  compliance  with  the  laws  relative  to 
amendments,  the  amount  of  capital  paid  in,  the  business  to  which  it  is  extended 
or  changed,  the  whole  amount  of  its  debts  and  liabilities,  and  the  amount  to 
which  the  capital  shall  be  increased  or  reduced,  shall  be  made  out  and  signed 
and  verified  by  the  affidavit  of  the  chairman  of  the  meeting,  and  be  counter- 
signed by  the  secretary  thereof.  Such  certificate  when  acknowledged  by  the 
chairman  and  filed  in  the  office  of  the  recorder  of  deeds  of  the  District  shall  be 
sufficient  to  secure  the  amendment  desired  (sees.  633-639  inclusive).  Under 
the  decision  of  the  District  Court  of  Appeals  in  Dancy  v.  Clark  (24  D.  of  C. 
App.  Cas.  487),  the  business  of  the  corporation  can  be  extended  only  to  some 
additional  line  of  business  cognate  to  that  for  which  the  company  was  originally 
incorporated.  In  connection  with  the  provisions  of  the  Code  relative  to  pub- 
lication of  notice  of  stockholders'  meetings  for  the  purpose  of  increasing  or 
decreasing  capital  stock  or  for  extending  or  changing  the  business,  the  Attorney- 

278 


DIGEST    OF    INCORPORATION    ACTS.  —  DISTRICT    OF    COLUMBIA. 

General  of  the  United  States  has  rendered  an  opinion  to  the  effect  that  such 
publication  may  be  waived  by  unanimous  consent  of  all  the  stockholders. 

23.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for  the 
extension  of  corporate  existence  except  by  reincorporating  under  the  general 
statute  (see  sees.  766,  767). 

24.  Dissolution.  —  Corporations  may  be  dissolved  on  application  to  the 
court  having  jurisdiction,  for  cause  shown  (sees.  769-789). 

Morrow  v.  Edwards,  9  Mackey,  475. 

25.  Annual  Franchise  Tax.  — There  is  no  annual  franchise  tax.  Under 
sec.  8  of  the  Tax  Law  approved  July  1,  1902,  capital  stock  of  all  newspaper,  real 
estate,  and  mercantile  corporations  are  taxed  the  same  as  individuals  conduct- 
ing business  along  similar  lines. 

26.  Foreign  Corporations.  —  Foreign  corporations  are  not  required  to 
obtain  a  permit  to  do  business  in  the  District  of  Columbia.  (Sec,  however, 
32  Statutes  at  Large,  622.)  Under  the  act  of  February  1,  1907,  when  a  foreign 
corporation  transacts  business  in  the  District  without  having  any  place  of 
business  or  resident  agent  therein,  the  service  upon  any  agent  or  officer  or 
employe  in  the  District  shall  be  effectual  as  to  suits  growing  out  of  contracts 
entered  into  or  to  be  performed  in  whole  or  in  part  in  the  District  of  Columbia, 
or  growing  out  of  any  tort  heretofore  or  hereafter  committed  in  said  District 
(U.  S.  Comp.  Stat.  1901,  Sup.  of  1905,  Title  XLVIII.  sec.  4066). 

Eastern  Trust  &  Banking  Co.  v.  Willis,  6  D.  C.  App.  375. 


279 


DIGEST    OF    INCORPORATION    ACTS. — FLORIDA. 


FLORIDA. 

(The  references  cited  below  are  to  the  General  Statutes  of  1906  unless  otherwise  stated.) 

1.  Statute  under  which  Business  Corporations  may  incorporate. — 

The  Business  Corporation  Act  of  Florida  is  to  be  found  in  the  General  Statutes 
of  1906,  sees.  2643  to  2692  inclusive.  Special  provision  is  made  by  statute  for 
banking,  building  and  loan,  insurance,  surety,  railroad,  canal,  telegraph  com- 
panies and  eleemosynary  institutions. 

2.  Incorporators. — Three  or  more  persons.  There  are  no  residential 
requirements  (sec.  2647). 

Brown  v.  Company,  19  Fla.  472. 

3.  Contents  of  the  Charter.  — The  charter  must  set  forth  (sec.  2648) : 

a.  Name.  —  Similarity  of  names  is  forbidden  (sec.  2676). 

b.  Domiciliary  Office.  —  The  place  or  places  of  business  must  be  set  forth. 

c.  Purposes.  —  The  general  nature  of  the  business  or  businesses  to  be 
transacted.  The  statute  clearly  contemplates  that  corporations  may  be  created 
for  more  than  one  purpose,  provided  none  of  the  purposes  set  forth  are  covered 
by  special  acts. 

d.  Capital  Stock.  —  The  amount  of  the  capital  stock  authorized,  the  number 
and  par  value  of  the  shares  into  which  it  is  divided,  and  the  terms  and  condi- 
tions upon  which  it  is  to  be  paid  in  must  be  set  forth.  The  par  value  of  the 
shares  must  not  be  less  than  $10  (sec.  2653).  The  capitalization  may  be  any 
amount.  If  it  is  desired  to  pay  in  the  capital  stock  in  anything  but  money,  this 
fact  must  be  stated  in  the  charter.  This  statement  should  include  a  provision 
either  that  the  whole  capital  stock  or  some  portion  thereof  shall  be  payable  in 
property,  labor  or  services,  at  a  just  valuation,  to  be  fixed  by  the  incorporators, 
or  by  the  directors  at  a  meeting  called  for  that  purpose  (sec,  2653). 

e.  Corporate  Existence.  —  The  charter  may  be  perpetual  if  desired. 

/.  Corporate  Officers.  —  The  charter  must  designate  the  officers  by  whom 
the  business  is  to  be  conducted,  the  times  at  which  they  shall  be  elected,  and 
the  names  of  the  officers  who  are  to  conduct  the  business  until  those  elected 
at  the  first  election  shall  have  qualified.  The  directors  must  all  be  stockholders. 
The  statutory  officers  are  a  president  and  treasurer  or  cashier  and  such  other 
officers  as  the  by-laws  may  designate. 

g.  Corporate  Indebtedness.  —  The  highest  amount  of  indebtedness  to  which 
the  corporation  can  at  any  time  subject  itself  must  be  set  forth. 

h.  Incorporators.  —  The  names  and  residences  of  the  incorporators  must 
be  stated.  The  subscribing  incorporators  must  also  state  the  amount  of  stock 
subscribed  for  by  each.  Such  amount  shall  be  not  less  than  ten  per  cent  of  the 
authorized  capital  stock  (sec.  2648). 

4.  Statutory  Powers.  —  Florida  statutes  enumerate  fully  the  common 
law  powers  of  corporations  as  follows:  Every  corporation  by  virtue  of  its 
existence  as  such  shall  have  power  (1)  To  have  succession  by  its  corporate 
name  for  the  period  limited  in  its  charter,  and,  when  no  period  is  limited, 
perpetually ;  (2)  To  sue  and  be  sued  in  any  court  of  law  or  equity ;  (3)  To 
make  contracts  and  to  adopt  and  use  a  common  seal,  and  alter  the  same  at 
pleasure ;   (4)  Where  special  provision  is  not  made  by  law  or  otherwise,  to 

280 


DIGEST    OF    INCORPORATION    ACTS.  —  FLORIDA. 

hold,  buy,  convey,  or  mortgage  such  personal  or  real  estate  as  the  purposes 
of  the  corporation  shall  require,  also  to  take,  hold,  and  convey  such  other  real 
and  personal  property  as  shall  be  necessary  for  the  corporation  to  acquire  in 
order  to  obtain  or  secure  the  payment  of  any  indebtedness  or  liability  to  it ; 
(5)  To  appoint  such  subordinate  officers  and  agents  as  the  affairs  of  the  cor- 
poration shall  require,  and  to  allow  them  suitable  compensation  ;  (6)  To  make 
by-laws ;  (7)  To  increase  or  diminish  by  a  vote  of  its  members,  cast  as  the 
by-laws  direct,  the  number  of  directors,  managers,  or  trustees,  so,  however, 
that  the  number  shall  not  be  less  than  three  nor  more  than  thirteen.  The 
only  additional  powers  conferred  by  statute  are  the  right  to  vote  by  proxy 
and  to  forfeit  stock  for  non-payment  of  assessments.  Also  to  mortgage  prop- 
erties. The  power  to  adopt  by-laws  may  be  delegated  in  the  charter  to  the 
directors  if  desired  (sees.  2645,  2662,  2671). 

5.  Procuring  the  Charter.  —  The  charter  must  be  subscribed  and  ac- 
knowledged by  each  of  the  incorporators  (sec.  2648).  Then  the  proposed  charter, 
together  with  notice  of  the  intention  to  apply  to  the  governor  for  letters  patent 
thereon,  must  be  published  for  four  weeks  once  each  week,  in  some  newspaper 
published  in  the  county  where  the  principal  place  of  business  is  to  be  located 
(sec.  2640).  This  notice  must  be  signed  with  the  name  of  at  least  three  of  the 
incorporators,  and  the  proposed  charter  must  be  filed  in  the  Secretary  of  State's 
office  during  the  four  weeks  of  publication  (sec.  2650).  Then  the  proposed 
charter,  accompanied  by  proof  of  publication  of  notice,  must  be  submitted  to 
the  governor,  who,  if  he  finds  it  to  be  in  proper  form,  and  for  objects  authorized 
by  law,  and  that  the  formalities  just  referred  to  have  been  observed,  will  issue 
letters  patent  to  the  corporation.  The  Secretary  of  State  will  then  annex  to 
the  letters  patent  a  certified  copy  of  the  charter,  retaining  the  original  on  file 
and  recording  it.  The  organization  tax  must  be  paid  to  the  Secretary  of  State, 
who  issues  a  certified  copy  of  the  charter.  Corporate  existence  commences 
from  the  time  the  certified  copy  of  the  charter  is  issued  by  the  Secretary  of  State. 
The  statute  specifically  provides  that  letters  patent,  or  a  certified  copy  thereof, 
shall  be  conclusive  evidence  as  to  the  existence  of  the  corporation  in  all  actions 
and  proceedings  where  the  question  of  its  existence  is  only  collaterally  involved, 
and  prima  facie  evidence  in  all  other  actions  and  proceedings  (sees.  -!o,30,  2651). 

6.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon  the 
amount  of  corporate  indebtedness  (sec.  2646). 

7.  Organization  Tax. — Two  dollars  upon  each  thousand  dollars  of  the 
capital  stock,  provided  no  fee  shall  be  less  than  $5  or  more  than  $250  (sec.  2650). 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State,  in  addition 
to  the  payment  of  the  organization  tax,  there  must  be  paid  a  filing  fee  of  $1. 
The  charge  for  making  a  certified  copy  of  the  charter  is  10  cents  per  hundred 
words  for  copying.  The  combined  fee  for  filing  and  making  certified  copy  and 
recording  is  about  $3.50.  For  publication,  the  charge  is  usually  about  $10. 
For  recording  certificate  of  incorporation  in  the  office  of  the  clerk  of  the  circuit 
court  in  the  county  where  the  corporation  is  to  do  business,  together  with  the 
affidavit  of  the  treasurer  as  to  the  amount  of  capital  stock  paid  in,  the  fee  is 
10  cents  per  hundred  words. 

9.  Commencing  Business.  —  Before  commencing  business  letters  patent 
together  with  a  certified  copy  of  the  charter  must  be  recorded  in  the  office  of 
the  clerk  of  the  circuit  court  of  the  county  where  the  principal  place  of  busi- 
ness is  located.  There  must  also  be  filed  with  the  Secretary  of  State  and  with 
said  clerk  of  the  circuit  court  duplicate  affidavits  by  the  treasurer  of  the  cor- 

28] 


DIGEST    OF    INCORPORATION    ACTS.  —  FLORIDA. 

poration  that  ten  per  cent  of  the  capital  stock  has  been  subscribed  and  paid. 
The  organization  tax  must  likewise  be  paid  (sec.  2652). 

10.  Organization  Meeting.  —  Must  be  held  within  the  State  (sec.  2666). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders  must  hold 
their  meetings  within  the  State.  The  directors  may  hold  their  meetings  without 
the  State  if  the  by-laws  so  provide  (sees.  2662,  2666). 

Duke  v.  Taylor,  37  Fla.  64;   19  Sou.  172. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications. — The 
number  of  directors  is  not  limited  by  law.  They  must  all  be  stockholders. 
There  are  no  residential  requirements  (sees.  2645,  2663). 

o.  Liabilities.  —  Directors  participating  in  the  declaration  of  illegal  divi- 
dends are  jointly  and  severally  liable  for  the  debts  of  the  corporation  then 
existing  to  the  extent  of  the  dividend  declared,  unless  they  at  the  time  object 
to  the  declaration  of  the  dividend  in  writing  (sec.  2691). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent 
of  their  unpaid  stock  subscriptions  (sec.  2677).  If  any  corporation  shall 
transact  any  business  before  complying  with  the  statutory  requirements,  its 
stockholders  shall  be  personally  liable  for  all  the  corporation  debts  as  if  they 
were  members  of  a  general  partnership  and  not  stockholders  of  a  corporation 
(sec.  2652). 

Gibbs  v  Davis,  27  Fla.  531;  8  Sou.  633;  Brown  v.  Company,  19  Fla.  472;  Martin  v.  Com- 
pany, 8  Fla.  370. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  officers  as  the  by-laws  may  designate 
for  that  purpose.  The  par  value  of  stock  certificates  may  be  any  amount  not 
less  than  $10  (sec.  2653). 

15.  Preferred  Stock.  —  There  is  no  statutory  provision  expressly  author- 
izing the  issuance  of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Unless  otherwise  provided  in  the 
charter,  stock  subscriptions  must  be  paid  in  cash.  Incorporators  may,  how- 
ever, provide  in  the  charter  that  the  capital  stock,  either  in  whole  or  in  part, 
shall  be  payable  in  property,  labor,  or  services  at  a  valuation  to  be  fixed  in  the 
charter.  The  charter  must  also  set  forth  the  general  description  of  the  prop- 
erty to  be  taken  in  exchange  for  stock  (sec.  2653). 

17.  Books.  — The  secretary  or  other  officer  who  by  the  by-laws  is  made 
the  custodian  of  its  books,  is  required  to  keep  the  same  in  his  possession  at  all 
times  during  business  hours,  and  have  the  same  ready  to  be  inspected  by  any 
officer,  director,  or  committee  appointed  by  the  stockholders  representing  one- 
tenth  of  all  the  subscribed  stock.  The  treasurer  or  cashier  is  required  to  keep 
a  stock  book  containing  a  list  of  the  stockholders  with  the  number  of  shares 
owned  by  each,  which  is  subject  to  inspection  by  the  stockholders  upon  written 
application  (sees.  2658,  2672). 

18.  Office.  —  Every  corporation  must  have  a  place  of  business  within  the 
State,  and  the  custodian  of  its  books  and  papers  must  reside  within  the  State 
(sees.  2658,  2672). 

19.  Reports.  — The  corporation  shall  annually  make  a  report  to  the  State 
comptroller  containing  the  name  and  residence  of  each  stockholder,  with  the 
number  of  shares  and  the  par  and  cash  market  value  of  such  shares,  the  whole 
amount  of  capital  stock,  the  amount  actually  paid  in,  the  real  estate  subject 
to  assessment  of  taxes,  and  the  personal  estate.     A  statement  of  the  amount 

282 


DIGEST    OF    INCORPORATION    ACTS. — FLORIDA. 

of  capital  stock  subscribed  and  the  amount  actually  paid  in  and  of  the  indebted- 
ness of  the  corporation  shall  be  filed  once  every  six  months  in  the  of  lice  of  the 
State  comptroller  (sees.  2659,  2661). 

20.  Anti-Trust  Statute.  —  Trusts  to  control  meats,  cattle,  or  edible  ani- 
mals are  prohibited  (sees.  1714,  2452,  3160,  3164). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Diversion  by  a 
corporation  of  its  funds  or  property  to  objects  other  than  those  named  in  t lie 
charter  or  to  payment  of  dividends,  leaving  insufficient  funds  to  meet  outstand- 
ing liabilities,  work  a  forfeiture  of  the  charter  (sec.  '-'690). 

22.  Amendments.  —  To  change  the  name  of  a  corporation  a  resolution 
to  that  effect  must  be  passed  by  a  majority  vote  of  the  stockholders  at  a  meeting 
called  for  that  purpose,  and  a  certificate  setting  forth  such  resolution  under 
the  corporate  seal  (attested  by  the  secretary)  must  be  filed  in  the  office  of 
the  Secretary  of  State.  Thereupon  letters  patent  shall  issue,  reciting  the  change 
in  name,  which  must  be  recorded  in  the  Secretary  of  State's  office  and  in  the 
office  of  the  clerk  of  the  Circuit  Court  where  the  original  charter  is  recorded 
(sees.  2675,  2676). 

With  respect  to  increasing  or  reducing  the  capital  stock,  the  statute  reads 
that  any  corporation  desiring  to  alter  or  amend  its  charter  shall  do  so  in  a 
certain  prescribed  manner  as  set  forth  in  the  statute.  To  increase  the  capital 
stock,  notice  of  the  meeting  of  stockholders  called  for  that  purpose  must  be 
published  once  a  week  for  four  consecutive  weeks  prior  thereto  in  one  newspaper 
published  in  the  county.  In  addition  to  this  the  usual  notice  for  stockholders' 
meetings  provided  for  in  the  by-laws  must  be  served  upon  or  mailed  to  the 
stockholders.  If  at  such  meeting  two-thirds  of  all  the  stockholders  vote  to 
increase  the  capital  stock,  the  president  within  thirty  days  thereafter  must 
make  a  return  to  the  Secretary  of  State  under  oath  of  the  amount  of  such 
increase  and  the  terms  on  which  said  capital  stock  is  issued,  and  from  the  time 
the  said  return  is  filed  the  increase  of  stock  shall  be  authorized,  anil  when 
issued  shall  become  a  part  of  the  capital.  At  the  same  time  the  capitalization 
tax  must  be  paid  upon  the  amount  of  increased  capital  stock.  To  reduce  the 
capital  stock  or  alter  or  change  the  par  value  of  the  shares  thereof  requires 
the  two-thirds  vote  of  all  the  stockholders  cast  at  a  meeting  called  in  the  same 
manner  as  is  above  referred  to  in  the  case  of  the  increase  of  the  capital  stock. 
In  order  to  legalize  the  reduction  of  the  capital  stock,  the  president  must  make 
within  thirty  days  thereafter  under  oath  his  return  to  the  Secretary  of  State  of 
the  amount  of  such  decrease,  and  upon  his  affidavit  must  be  endorsed  a  certifi- 
cate of  the  State  comptroller  that  in  his  judgment  the  ability  of  the  corporation 
to  meet  its  outstanding  liabilities  and  debts  will  not  be  impaired  thereby  (sees. 
2673,  2674;    Laws  of  1909,  No.  22,  p.  38). 

To  amend  the  charter  in  other  respects  a  meeting  must  be  called  in  the 
manner  set  forth  above  with  reference  to  increasing  or  reducing  the  capitaliza- 
tion. At  this  meeting  the  proposed  amendment  must  receive  a  vote  of  three- 
fourths  of  the  outstanding  capital  stock.  II'  t  he  proposed  amendment  is  adopted, 
the  corporation  must  then  give  four  weeks'  notice,  once  each  week,  of  intent  inn 
to  apply  to  the  governor  therefor,  in  some  newspaper  published  in  the  county 
wherein  the  principal  place  of  business  is  located,  setting  forth  the  desired 
alteration  or  amendment.  The  corporation  must  then  prepare  :t  certificate 
which  shall  be  filed  in  the  Secretary  of  Sta1  '  office  during  the  time  <>(  publi- 
cation, am  I  afterwards,  togel  her  v.  ii  h  the  proof  of  publication  of  not  ice.  These 
are  all  submitted  to  the  governor,  who,  it'  the  same  are  found  in  proper  form 

283 


DIGEST    OF    INCORPORATION    ACTS.  —  FLORIDA. 

and  legally  adopted,  if  the  proposed  amendment  will  be  beneficial  and  lawful 
and  of  interest  to  the  community  and  in  accord  with  the  purposes  of  the  charter, 
will  approve  the  same,  and  thereupon  letters  patent  shall  issue  reciting  the 
amendment,  and  the  same  shall  then  be  recorded  in  the  office  of  the  Secretary 
of  State  and  in  the  office  of  the  clerk  of  the  Circuit  Court  where  the  original 
charter  was  recorded  (sec.  2150). 

23.  Annual  License  Tax.  —  There  is  no  annual  license  tax. 

24.  Extension  of  Corporate  Existence. — The  statute  makes  no  spe- 
cific provision  for  extension  of  corporate  existence.  (See,  however,  sec. 
2675.) 

25.  Dissolution.  —  A  majority  in  interest  of  the  stockholders  may  peti- 
tion the  Circuit  Court  for  the  dissolution  of  the  corporation,  and  the  court 
after  publication  for  a  reasonable  period  may  hear  the  matter  and  may  decree 
a  dissolution  (sec.  2682). 

Gibbs  v.  Davis,  27  Fla.  531;  8  Sou.  633. 

26.  Foreign  Corporations.  —  Up  to  1907  there  were  no  statutory  pro- 
visions in  force  in  Florida  prescribing  the  conditions  upon  which  foreign  corpora- 
tions might  do  business  in  that  State.  The  matter  is  now  regulated  by  recent 
statute  as  follows  (Laws  of  1907,  No.  122;   chap.  5717,  approved  June  1,  1907). 

No  foreign  corporation  shall  transact  business  or  acquire,  hold,  or  dispose  of 
property  in  this  State  until  it  shall  have  filed  in  the  office  of  the  Secretary  of 
state  a  duly  authenticated  copy  of  its  charter  or  articles  of  incorporation,  and 
shall  have  received  from  him  a  permit  to  do  business  in  this  State.  Upon  the 
filing  of  such  copy,  the  Secretary  of  State  shall,  if  the  objects  of  the  corporation 
are  such  as  are  not  prohibited  by  the  laws  of  this  State,  issue  a  permit  allowing 
such  corporation  to  transact  business  in  this  State,  but  he  shall  not  deliver  such 
permit  to  the  corporation  until  he  shall  have  received  from  it  for  the  use  of  the 
State  a  sum  equal  to  that  which  the  said  corporation  would  have  been  required 
to  pay  as  a  charter  fee  if  it  had  been  incorporated  under  the  laws  of  this  State. 
The  fee  of  the  Secretary  of  State  for  issuing  the  permit  shall  be  $5. 

If  the  charter  or  articles  of  incorporation  of  any  foreign  corporation  shall 
be  amended  after  a  permit  has  been  issued  to  it  under  the  provisions  of  this 
act,  such  corporation  shall  within  thirty  days  thereafter  file  a  duly  authenti- 
cated copy  of  the  amendment  in  the  office  of  the  Secretary  of  State,  who  shall 
issue  to  the  corporation  a  certificate  of  the  filing  ;  but  if  the  amendment  is  one 
increasing  the  capital  stock,  he  shall  not  deliver  the  certificate  until  he  shall 
have  received  from  the  corporation  for  the  use  of  the  State  a  sum  equal  to 
that  winch  such  corporation  would  have  been  required  to  pay  if  it  had  been  a 
corporation  increasing  its  capital  stock  under  the  laws  of  this  State.  If  any 
such  corporation  shall  fail  to  file  any  amendment  and  to  make  the  payment 
aforesaid  within  the  said  thirty  days,  its  permit  shall  be  deemed  to  be  revoked 
until  the  provisions  of  this  section  shall  be  complied  with.  The  fee  of  the 
Secretary  of  State  for  granting  the  certificate  shall  be  $2. 

Every  contract  made  by  or  on  behalf  of  any  foreign  corporation  affecting  its 
liability  or  relating  to  property  within  the  State  before  it  shall  have  complied 
with  the  provisions  of  this  act  shall  be  void  on  its  behalf  and  on  behalf  of  its 
assigns,  but  shall  be  enforceable  against  it  or  them. 

This  act  shall  be  deemed  to  apply  to  foreign  building  and  loan  associations, 
foreign  insurance  companies,  foreign  surety  companies,  and  all  other  foreign 
corporations  which  now  are  or  hereafter  may  be  required  to  obtain  other  certifi- 

284 


DIGEST    OF    INCORPORATION    ACTS. — FLORIDA. 

cates  of  authority  to  transact  business  in  this  State  ami  to  impose  an  additional 
requirement  upon  them,  as  well  as  to  all  other  foreign  corporations  except 
those  which  are  excepted  by  the  terms  from  the  operation  of  this  act.  This 
act  shall  not  apply  to  any  foreign  corporation  whatever  transacting  business  in 
this  State  at  the  time  this  act  shall  take  effect;  provided  that  any  such  foreign 
corporation  hereafter  increasing  its  capital  stock  shall  comply  with  the  pro- 
visions of  sec.  3  in  relation  thereto. 

A  foreign  corporation  is  denned  to  be  a  corporation  incorporated  by  or  under 
the  laws  of  any  other  State  or  Territory  or  of  any  other  country. 

Any  foreign  corporation  which  shall  violate  the  provisions  of  sec.  1  or  3  shall 
upon  conviction  be  fined  not  more  than  $1,000  for  the  first  offence,  and  not 
more  than  $5,000  for  each  subsequent  offence,  and  any  officer  or  agent  of  any 
foreign  corporation  who  shall  violate  the  provisions  of  sec.  1  or  3  shall  upon 
conviction  be  punished  by  a  fine  of  not  more  than  $2,000  or  by  imprisonment 
not  exceeding  six  months,  or  by  both  such  fine  and  imprisonment. 

Duke  v.  Taylor,  37  Fla.  64;   19  Sou.  172. 


285 


DIGEST    OF    INCORPORATION    ACTS. — GEORGIA. 


GEORGIA. 

(The  references  cited  below  are  to  the  Civil  Code  of  Georgia,  1895,  and  to  the  Supplement 
of  1901,  unless  otherwise  stated.) 

1.  Statute  under  which  Business  Corporations  may  incorporate. — 

The  Business  Corporation  Act  of  Georgia  is  to  be  found  in  the  Civil  Code  of 
Georgia  (Revision  of  1895),  title  11,  sees.  1831  to  1902.  Some  general  provisions 
applicable  alike  to  all  corporations  are  also  found  in  Civil  Code,  sees.  2349, 
2350,  2698,  3064,  and  3954,  and  in  the  Political  Code,  sees.  805  to  881.  Under 
the  general  law  corporations  may  be  formed  for  any  lawful  purpose  not  covered 
by  the  special  acts  relating  to  banks,  railroads,  telegraph,  insurance,  naviga- 
tion, express,  and  canal  companies,  charters  for  which  are  granted  and  issued 
the  Secretary  of  State.    (See  sees.  1903-2348.) 

Atherton  v.  Company,  71  Ga.  106;  Ellington  v.  Company,  93  Ga.  53;  19  S.  E.  21;  P.  & 
M.  Bank  v.  Pedgett,  69  Ga.  159. 

2.  Incorporators.  —  There  must  be  at  least  two  incorporators.  There 
are  no  residential  requirements  (sec.  2350 ;  see  also  sec.  1854). 

Mather  v.  Morgan,  72  Ga.  517;  Waycross,  etc.  Ry.  Co.  v.  Offerman,  109  Ga.  827;  35 
S.  E.  275. 

3.  Contents  of  Petition  for  Charter.  —  The  petition  addressed  to  the 
Superior  Court  must  state : 

a.  Purposes.  —  The  objects  of  the  corporation  and  the  particular  business 
proposed  to  be  carried  on.  It  is  doubtful  whether  under  this  section  a  corpo- 
ration may  be  incorporated  to  carry  on  more  than  one  line  of  business. 

b.  Name.  —  Similarity  of  names  is  not  permitted. 

c.  Capital  Stock.  —  The  amount  of  capital  stock  to  be  employed  and  actu- 
ally paid  in.     Capital  stock  may  be  any  amount. 

d.  Domiciliary  Office.  —  The  principal  place  of  business  must  be  set  forth. 

e.  Duration.  —  Corporate  existence  is  limited  to  twenty  years  (sec.  2350). 

In  re  Devaux,  54  Ga.  673;  Hendrix  v.  Academy,  73  Ga.  437;  Davis  v.  Company,  17  Ga. 
323;    Daniel  v.  Wilson,  91  Ga.  238;    18  S.  E.  134. 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of 
common  law  powers,  the  folio  wing  additional  powers  are  conferred :  To  receive 
donations  by  gift  or  will ;  to  create  a  lien  upon  the  stock  for  debts  due  from 
stockholders  (sees.  1852,  2825).  Corporations  are  forbidden  by  constitutional 
provision  to  own  or  hold  stock  in  other  corporations  (Cons.,  Art.  IV.  sec.  11, 
par.  4).  They  are  also  forbidden  to  consolidate  or  merge  with  other  corpora- 
tions when  the  effect  would  be  to  defeat  or  risk  competition  or  to  encourage 
monopoly  (Cons.,  Art.  IV.  sec.  11,  par.  4;  sees.  6467-6472).  The  rights  of 
majority  and  minority  stockholders  are  enumerated  in  the  statute,  sees.  1859, 
1860).  Corporators  have  an  interest  in  the  franchises  of  the  corporation,  of 
which  they  cannot  be  deprived  except  by  due  process  of  the  law.  Mandamus 
will  lie  against  the  corporation  to  enforce  such  right  if  there  is  no  legal  remedy 
(Cons.,  Art.  IV.  sec.  2,  par.  4.  See  also  as  to  special  powers  of  mining  corpora- 
tions, Laws  of  1904,  p.  51). 

Trust  Co.  v.  State,  109  Ga.  736;  35  S.  E.  323;  Waycross,  etc.  Ry.  Co.  v.  Offerman,  109 
Ga.  827;  35  S.  E.  275;  Bradford  v.  Companv,  58  Ga.  280;  U.  B.  Ry.  Co.  v.  Company,  14 
Ga.  327. 

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DIGEST    OF    INCORPORATION    ACTS.  —  GEORGIA. 

5.  Procuring  the  Charter. — The  declaration  of  incorporation  prepared 
by  the  incorporators  as  prescribed  by  sec.  2350  of  the  Code  (see  ante,  sec.  3) 
must  be  presented  in  the  form  of  a  petition  to  the  Superior  Court  of  the  county 
in  which  the  corporation  desires  to  transact  business.  The  manner  of  execu- 
tion of  the  declaration  of  incorporation  is  not  prescribed  by  statute.  The 
petition  must  be  published  once  a  week  for  four  consecutive  weeks  in  the  nearest 
newspaper  to  the  point  where  the  corporate  business  is  to  be  carried  on.  When 
the  court  grants  the  petition  by  order  to  that  effect,  the  petition  and  the  order 
must  be  recorded  by  the  clerk  of  the  Superior  Court  in  the  record  of  "Superior 
Court  charters."  The  proceedings  must  also  be  recorded  in  the  minutes  of  the 
court  as  part  of  the  proceedings  thereof.  The  order  itself  is  to  the  effect  that 
the  petitioners  and  their  successors  are  incorporated  for  a  term  of  not  exceeding 
twenty  years,  with  the  privilege  of  renewal  at  the  expiration  of  that  time  in 
the  manner  provided  by  statute.  Before  business  can  be  commenced  ten  per 
cent  of  the  authorized  capital  stock  must  be  paid  in.  Corporate  business  must 
be  commenced  within  two  years  after  the  issuance  of  the  charter  (sec.  2350). 

Existence  of  a  corporation  cannot  be  collaterally  attacked.  All  who  have 
dealt  with  the  corporation  as  such  are  estopped  from  denying  its  corporate 
existence  (sec.  1862). 

Harriman  v.  Baptist  Church,  63  Ga.  186;  In  re  Deveaux,  54  Ga.  673;  Etowah  Mil.  Co. 
v.  Crenshaw,  116  Ga.  406;   42  S.  E.  709;   McCandless  v.  Company,  115  Ga.  968;  42  S.  E.  449. 

6.  Corporate  Indebtedness.  — There  is  no  statutory  hrnitation  upon  the 
amount  of  corporate  indebtedness.  If  the  corporation  desires  to  issue  bonds, 
it  must  furnish  to  the  Secretary  of  State  a  certified  statement  in  relation  thereto 
(Laws  of  1900,  chap.  139;  sees.  1866-1868,  6157). 

7.  Organization  Tax.  —  There  is  no  organization  tax  imposed  as  such  in 
Georgia.  Under  the  statute  the  clerk  of  the  court  has  power  to  collect  the 
usual  fees  allowed  for  similar  services  in  other  cases.  These  fees  vary  from 
S10  to  S20. 

8.  Filing  and  Recording  Fees.  —  The  average  cost  for  filing  petition  for 
charter  in  the  office  of  the  county  clerk  and  for  docketing  and  spreading  the 
order  granting  petition  on  the  minutes,  $12.50.  The  cost  of  certified  copy  of 
the  charter  is  S2.50 ;  cost  of  publishing  articles  of  incorporation  depends  upon 
whether  the  publication  is  made  in  a  country  or  city  newspaper,  and  ranges 
from  $5  to  $20. 

9.  Commencing  Business.  —  Corporations  before  commencing  business 
must  pay  in  ten  per  cent  of  the  authorized  capital  stock  (sec.  2350).  Business 
must  be  commenced  within  two  years  (sec.  2350).  In  order  to  avoid  liability, 
the  incorporators  must  see  that  the  minimum  capital  stock  has  been  subscribed 
for  and  ten  per  cent  thereof  paid  in  before  commencing  business  (sec.  1856). 

•    McCandless  v.  Company,  115  Ga.  968;  42  S.  E.  449;    Atherton  v.  Company,  71  Ga.  106. 

10.  Organization  Meeting.  —  In  the  absence  of  any  statute  expressly 
authorizing  the  holding  of  meetings  elsewhere,  organization  meetings  must 
be  held  within  the  State. 

Mining  Co.  v.  King,  45  Ga.  34. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  witliin  the  State.  Directors'  meetings  may  be  held  without  the 
State  if  the  by-laws  so  provide. 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualifications. — The 
statute  makes  no  special  provision  with  relation  to  directors  other  than  to 

287 


DIGEST    OF    INCORPORATION   ACTS.  —  GEORGIA. 

provide  that  they  shall  represent  the  corporation  and  its  stockholders.  Their 
number,  qualifications,  term  of  office,  and  powers  are  left  largely  for  determina- 
tion to  the  by-laws  adopted  by  the  incorporators  (sees.  1858,  1861). 

b.  Liabilities.  —  Directors  are  liable  for  the  declaration  of  any  dividend  or 
the  distribution  of  money  among  the  stockholders  as  profits  when  such  dividend 
or  money  is  not  the  legitimate  proceeds  of  such  investments.  (See  Penal  Code, 
sec.  691 ;  Laws  of  1902,  chap.  13,  p.  58.)  The  law  provides  that  for  failure 
to  allow  an  inspection  of  list  of  stockholders,  or  for  the  declaration  of  illegal 
dividends,  or  for  refusing  to  give  certificate  of  stockholders  and  their  holdings 
on  application  in  a  suit  against  the  corporation,  the  officers  responsible  therefor 
shall  be  held  liable.  (See  sees.  594,  691  of  the  Penal  Code;  also  Civ.  Code, 
sees.  1861,  1891,  1895.)  Directors  are  liable  for  authorizing  use  of  corporate 
funds  for  political  purposes  (Laws  of  1908,  chap.  435). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  the  debts  of 
the  company  only  to  the  extent  of  their  unpaid  stock  subscriptions.  Stock- 
holders who  are  incorporators  and  who  organize  the  company  and  transact 
business  under  that  name  before  the  minimum  amount  of  capital  stock  has 
been  subscribed  for,  are  liable  to  creditors  to  make  good  the  minimum  stock 
with  interest  (sees.  1889,  1890,  2350).  Whenever  a  stockholder  purchases 
stock  upon  which  there  is  a  liability  for  unpaid  subscriptions,  he  shall  be  exempt 
from  further  liability  unless  the  corporation  fails  within  six  months  from  the 
date  of  the  transfer  (sec.  1888). 

Fouche  v.  Bank  of  Rome,  110  Ga.  827;  36  S.  E.  256;  Wilkinson  v.  Bertock,  111  Ga.  187; 
36  S.  E.  623;  Harrell  v.  Blount,  112  Ga.  711;  38  S.  E.  56;  Tichenor  v.  Williams,  etc.  Co., 
116  Ga.  306;    42  S.  E.  505;    Allen  v.  Grant,  122  Ga.  552;    Bank  v.  Warthan,  119  Ga.  990. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  officers  as  the  by-laws  may  designate 
for  that  purpose.    The  par  value  of  stock  certificates  may  be  any  amount. 

15.  Preferred  Stock.  —  There  is  no  statutory  provision  expressly  author- 
izing the  issuance  of  preferred  stock. 

See,  however,  Totten  v.  Tison,  54  Ga.  139. 

16.  Payment  of  Capital  Stock.  —  The  statute  does  not  authorize  in 
express  terms  the  issuance  of  capital  stock  for  anything  except  cash. 

See  Havden  v.  Atlanta  Cotton  Factory,  61  Ga.  233;  Fouche  v.  Bank  of  Rome,  110  Ga. 
827;  36  S.  E.  256;  McCandless  v.  Company,  115  Ga.  978;  42  S.  E.  449;  Macon,  etc.  Ry. 
Co.  v.  Vernon,  57  Ga.  314. 

17.  Books. — The  corporation  is  required  to  keep  a  stock  register  which 
is  open  to  the  inspection  of  creditors  (Penal  Code,  sec.  594 ;  Civ.  Code,  sees.  1890, 
1891,  1895). 

18.  Office.  —  Every  corporation  must  maintain  an  office  within  the  State 
(sec.  2350). 

R.  R.  Co.  v.  Wilson,  116  Ga.  189;   E.  M.  Co.  v.  Crenshaw,  116  Ga.  406. 

19.  Reports.  —  Annual  reports  must  be  filed  with  the  Secretary  of  State 
as  the  ex-officio  corporation  commissioner  of  the  State  on  or  before  Novem- 
ber 1st  of  each  year.  This  report  must  show  name  of  company,  facts  relat- 
ing to  incorporation,  amount  of  capital  stock,  business,  and  location  of  the 
principal  office  (Laws  of  1906,  p.  103). 

20.  Anti-Trust  Statute.  —  By  statute  all  combinations  made  with  a  view 
to  lessen  free  competition  in  the  importation  or  sale  of  articles,  or  in  the  manu- 

288 


DIGEST    OF    INCORPORATION    ACTS.  —  GEORGIA. 

facture  or  sale  of  articles  of  domestic  growth,  are  illegal  and  void  (Laws  of 
1896,  p.  68). 

In  the  case  of  Brown  &  Allen  et  al.  v.  Jacobs,  ete.  Co.  (115  Ga.  428),  this 
statute  was  declared  unconstitutional  as  exempting  from  its  provisions  agri- 
cultural products  and  live-stock.  The  court,  however,  in  this  case  held  that 
under  the  common  law  of  the  State  it  was  contrary  to  public  policy  for  unjust 
combinations  to  lessen  free  competition,  and  that  therefore  the  statute  was 
unnecessary.  The  State  legislature  is  forbidden  by  constitutional  enactment 
to  authorize  any  corporation  to  buy  stock  or  make  any  contract  with  any  other 
corporation  which  may  have  the  effect  of  defeating  or  risking  competition  or 
encouraging  monopoly  (Cons.,  Art.  IV.  sec.  2,  par.  4.  See  also  sees.  6468,  6470, 
6471). 

Willis  o.  Company,  120  Ga.  597. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  A  corporation 
may  forfeit  its  charter  by  wilful  violation  of  any  of  the  essential  conditions  on 
which  it  was  granted.  Also  by  misuse  or  non-user  of  its  franchises.  Dissolu- 
tion for  either  cause  can  be  effected  only  by  a  court  of  competent  jurisdiction 
declaring  forfeiture  (Civil  Code,  sees.  1882-1886). 

22.  Amendments.  — The  incorporation  acts  relative  to  the  incorporation 
of  companies  through  the  medium  of  the  Superior  Court  is  very  vague  when 
it  comes  to  the  matter  of  amending  charters.  Sec.  2350  of  the  Code,  sub.  6, 
provides  that  the  power  conferred  upon  the  Superior  Court  to  grant  charters 
shall  extend  to  the  amendment  or  renewal  of  the  same.  The  power  thus  con- 
ferred is  held  by  the  courts  to  be  sufficient  to  permit  of  the  amendment  of 
charters  to  practically  an  unlimited  extent.  (See  also  Code,  sees.  1840-1845 
inclusive,  as  to  the  amendment  of  charters  of  banking,  insurance,  railroad,  canal, 
navigation,  express,  or  telegraph  companies.    See  also  Laws  of  1902,  p.  49.) 

Macon,  etc.  Ry.  Co.  v.  Gibson,  85  Ga.  1;  US.  E.  442. 

23.  Annual  License  Tax.  —  An  annual  license  tax  must  be  paid  to  the 
tax  collector  of  the  county  in  which  the  corporate  business  is  carried  on  in  the 
following  amounts :  Where  the  capital  of  the  corporation  does  not  exceed 
$10,000,  $5;  over  $10,000  and  not  over  $25,000,  $10;  over  $25,000  and  not  over 
$100,000,  $15;  over  $100,000  and  not  over  $300,000,  $25;  over  $300,000  and 
not  over  $500,000,  $50;  over  $500,000  and  not  over  $1,000,000,  $75;  on  any 
amount  over  $1,000,000,  $100  (Laws  of  1909,  p.  48,  sec.  2,  sub.  31). 

24.  Extension  of  Corporate  Existence. — Corporate  existence  may  be 
extended  by  complying  with  the  statutes  in  that  regard  (sec.  2350,  sub.  0 ; 
Laws  of  1897,  p.  28). 

25.  Dissolution.  —  Corporations  are  dissolved,  (1)  by  expiration  of  the 
charter;  (2)  by  forfeiture  of  the  charter;  (3)  by  surrender  of  franchises; 
(4)  by  the  death  of  all  its  members  without  provision  for  its  succession  (Code, 
sec.  1882). 

Atlanta  u.  Gate  Citv  Gas  Light  Co.,  71  Ga.  106;  Georgia  Central  Ry.  Co.  v.  Tifton,  Thomas- 
ville,  &  Gulf  Ry.  Co.,  "lO'J  Ga.  766. 

26.  Foreign  Corporations.  —  Foreign  corporations  are  permitted  to  do 
business  in  Georgia  as  a  matter  of  comity  to  the  same  extern1  as  Georgia  cor 
porations  are  recognized  in  the  domiciliary  State  of  such  foreign  corporation 
(sec.  1846).  They  arc  forbidden  to  own  land  in  Georgia  to  the  amount  of  five 
thousand  acres  or  over  without  incorporating  under  Georgia  laws  (sec.  L849). 

19 


DIGEST    OF    INCORPORATION   ACTS.  —  GEORGIA. 

The  General  Tax  Act  of  Georgia  for  the  years  1908  and  1909,  sec.  42,  Laws  of 
1907,  p.  34,  provides  that  a  tax  shall  be  imposed  upon  agents  of  foreign  cor- 
porations having  a  place  of  business  in  the  State  annually  as  follows :  Upon  cor- 
porations with  a  capital  not  exceeding  $10,000,  $5;  over  $10,000  and  not  over 
$25,000,  $10;  with  a  capital  over  $25,000  and  not  over  $100,000,  $15;  over 
$100,000  and  not  over  $300,000,  $25;  over  $300,000  and  not  over  $500,000,  $50; 
over  $500,000  and  not  over  $1,000,000,  $75;  over  $1,000,000,  $100.  The  act 
further  provides  that  if  such  foreign  corporation  shall  on  or  before  the  1st  day 
of  April  of  each  year  pay  to  the  Comptroller-  General  the  amount  of  license  tax 
prescribed  for  domestic  corporations  (see  ante,  sec.  23),  then  such  agent  shall 
be  relieved  from  the  payment  of  such  annual  license  tax,  and  to  that  end  such 
foreign  corporations  shall  register  their  names,  capital  stock,  and  names  of 
agent  with  the  Comptroller- General  before  the  1st  day  of  April  of  each  year 
(Laws  of  1909,  p.  48,  sec.  2,  sub.  32).  In  case  of  the  failure  of  a  foreign  cor- 
poration to  make  the  returns  required  by  law,  or  to  pay  taxes,  their  right  to  do 
business  in  the  State  is  suspended  (Pol.  Code,  sec.  875).  All  corporations,  ex- 
cept banks,  doing  business  in  this  State  are  required  to  make  a  return  annually 
to  the  Secretary  of  State,  through  the  president  or  general  manager,  on  or  by 
the  1st  of  November,  embracing  the  following  information:  (1)  The  name  of 
the  company;  (2)  when  incorporated;  (3)  by  what  authority;  (4)  where  in- 
corporated; (5)  the  amount  of  the  capital  stock  of  said  corporation;  (6)  the 
business  of  the  corporation;  (7)  its  principal  office.  At  the  time  of  making 
said  return  the  officer  making  same  shall  remit  a  fee  of  $1  for  the  first  year, 
and  annually  thereafter  50  cents.  The  penalty  for  the  failure  to  make  this 
promptly  is  $50  (Act  of  August  17,  1906).  The  fee  for  fifing  with  the  Secretary 
of  State  the  first  annual  report  is  $1,  thereafter  filing  fee  is  50  cents  annually. 

V.  B.  R.  R.  Co.  v.  E.  T.  &  G.  R.  R.  Co.,  114  Ga.  327;  A.  C.  Society  v.  Gartell,  23  Ga. 
448;    S.  C.  Ry.  Co.  v.  People's  Sav.  Ins.,  64  Ga.  18. 


290 


DIGEST    OF    INCORPORATION    ACTS.  —  HAWAII. 


HAWAII. 

(The  references  cited  below  are  to  chap.  157  of  the  Revised  Laws  of  Hawaii,  1905,funlesa 
otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Hawaii  is  to  be  found  in  the  Revised  Laws  of 
Hawaii,  1905,  chap.  157,  sees.  2535-2569  inclusive.  Provisions  relative  to 
foreign  corporations  are  to  be  found  in  the  Revised  Laws  of  1905,  chap.  160, 
sees.  2623-2629  inclusive.  Under  this  act  corporations  may  be  formed  for 
any  purpose  excepting  banking  and  professional  business. 

2.  Incorporators.  —  Any  number  not  less  than  five,  a  majority  of  whom 
must  be  residents  of  Hawaii. 

3.  Contents  of  Articles  of  Association.  —  The  articles  must  set  forth 
(sec.  2536) : 

a.  Name.  — The  name  must  be  followed  by  the  word  "  Limited." 

b.  Domicile.  —  Location  of  its  principal  office. 

c.  Purpose.  —  The  purpose  of  the  company. 

d.  Capital  Stock.  —  The  amount  of  the  capital  stock,  and  if  the  privilege  of 
subsequent  extension  thereof  is  asked  for,  the  limit  of  such  extension. 

e.  Officers.  —  Number  and  designation  of  officers  proposed.  The  duration 
of  the  corporation  should  also  be  stated,  and  this  cannot  exceed  fifty  years 
(sec.  2539).  In  the  provisions  of  law  with  reference  to  the  creation  of  corpora- 
tions by  charter  (having  special  reference  to  quasi-public  and  eleemosynary 
corporations)  is  to  be  found  the  following:  "In  the  case  of  joint-stock  com- 
panies, there  shall,  in  addition  to  a  wrritten  petition  accompanied  by  proofs 
that  three-fourths  of  the  shares  have  been  subscribed  for,  be  also  filed  at  the 
same  time  in  the  office  of  the  Territorial  Treasurer  a  certificate  setting  forth 
the  location  of  the  proposed  company,  the  object  of  the  corporation,  the 
amount  of  stock  proposed,  and,  if  the  privilege  of  subsequent  extension  thereof 
is  asked  for,  the  limit  of  the  extension,  the  proposed  duration  of  the  company, 
the  time  within  which  it  is  to  organize,  whether  the  liability  of  stockholders 
is  to  be  limited  to  the  amount  of  their  stock  or  otherwise ;  and  also  whether 
the  whole  or  any  part  of  the  capital  stock  is  to  be  paid  in  before  commencing 
operations,  and  if  in  part,  what  part  (sec.  2545).  The  foregoing,  however,  does 
not  apply  to  joint  stock  companies  incorporated  under  sections  2535  and  2540, 
except  as  to  increase  of  capital  stock  (sec.  2541). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  the 
common  law  powers,  corporations  have  the  following  additional  powers  :  To 
issue  preferred  stock.  To  forfeit  stock  for  non-payment  of  assessments.  To 
vote  at  stockholders'  meetings  by  proxy  (sees.  2551,  2552,  2554,  2558,  2559, 
2560).     To  issue  preferred  stock  (Act  30,  1909). 

5.  Procuring  the  Charter. — The  incorporators  must  sign  and  acknowl- 
edge the  articles  of  association  before  some  officer  authorized  to  take  acknowl- 
edgments. The  articles  of  association  must  then  be  recorded  in  the  office  <>f 
the  Treasurer  of  the  Territory.  They  must  be  accompanied  by  an  affidavit, 
sworn  to  by  the  president,  secretary,  and  treasurer  of  the  corporal  ion.  setting 
forth  the  number  of  shares,  amount  of  capital  stock,  names  of  subscribers  to 
t'ie  capital  stock,  and  the  amount  paid  thereon.     When  the  object  of  the  cor- 

291 


DIGEST    OF    INCORPORATION   ACTS. — HAWAII. 

poration  is  to  take  over  and  conduct  any  existing  agricultural,  manufacturing, 
shipping,  or  trading  business  or  enterprise,  affidavit  must  then  contain  a  full 
description  of  the  property  intended  to  represent  the  capital  stock  of  the  pro- 
posed corporation,  a  detailed  valuation  of  each  item  of  the  property,  and  copy 
of  the  conveyance's  to  be  made  by  the  owners  of  such  business  to  the  proposed 
corporation  (sees.  2536-2538  inclusive). 

Hackfeld  v.  King,  11  H.  5. 

6.  Corporate  Indebtedness.  — The  amount  of  indebtedness  must  at  no 
time  exceed  the  amount  of  the  capital  stock  (sec.  2564). 

7.  Organization  Tax.  —  On  filing  the  articles  of  association  in  the  office 
of  the  Treasurer  of  the  Territory,  in  addition  to  a  stamp  duty  of  $25  thereon, 
and  the  payment  of  the  ordinary  recording  fees,  the  following  organization  tax 
must  be  paid  to  the  Treasurer  of  the  Territory  for  the  use  of  the  Territory,  to 
wit:  For  certificate  of  incorporation,  20  cents  for  each  $1,000  of  total  amount  of 
capital  stock  authorized,  but  in  no  case  less  than  $25;  for  increase  of  capital 
stock,  20  cents  for  each  $1,000  of  total  increase  authorized,  but  in  no  case  less 
than  $20;  for  extension  or  renewal  of  corporate  existence  of  any  corporation 
the  fee  is  the  same  as  required  for  filing  the  original  certificate  of  organization. 
Dissolution  of  corporation,  change  of  name,  change  of  nature  of  business, 
amended  certificates  of  organization  (except  in  the  increase  of  capital  stock), 
decrease  of  capital  stock,  increase  or  decrease  of  par  value  or  of  number  of 
shares,  $25;  for  filing  annual  exhibit  of  foreign  and  domestic  corporations,  $10 
(sec.  2566  A,  as  added  by  Laws  of  1907,  p.  95,  sees.  1298,  1320). 

8.  Filing  and  Recording  Fees.  —  For  recording  in  the  office  of  the 
Territorial  Treasurer,  approximately  $5;  for  every  copy  of  any  document, 
50  cents  per  hundred  words  (sec.  1181). 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  three-fourths  of  the  authorized  capital  stock  has  been  subscribed  for 
and  ten  per  cent  thereof  shall  have  been  paid  in,  or  the  corporation  shall  have 
acquired  property  of  a  value  equal  to  ten  per  cent  of  its  capital  (sec.  2540). 

10.  Organization  Meeting.  —  Organization  meeting  must  be  held  within 
the  Territory  (see,  however,  sec.  2555). 

O.  S.  Co.  v.  Austin,  5  H.  555. 

11.  Meetings  of  Stockholders  and  Directors.  —  In  the  absence  of 
unanimous  consent  of  stockholders,  the  meetings  must  be  held  within  the  Ter- 
ritory. The  law,  however,  provides  that  when  all  the  stockholders  are  present, 
either  in  person  or  by  proxy,  and  shall  sign  a  written  consent  thereto  on  the 
record  of  such  meeting,  the  doings  of  such  meeting  shall  be  valid  (sees.  2555- 
2557).  It  would  appear,  in  the  absence  of  any  statute  providing  otherwise, 
that  directors'  meetings  may  be  held  without  the  Territory  if  the  by-laws  so 
provide. 

Brown  v.  Carter,  15  H.  333. 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
is  no  limit  to  the  number  of  directors,  nor  are  any  residential  qualifications 
prescribed.    The  matter  is  left  to  be  regulated  by  the  by-laws. 

b.  Liabilities.  —  Directors  are  individually  liable  for  making  dividends  ex- 
cept from  the  profits  of  the  business,  for  the  withdrawal  of  capital  stock,  and 
are  also  criminally  liable  for  making  false  statements  in  affidavits,  reports,  etc. 

292 


DIGEST    OF    INCORPORATION    ACTS.  —  HAWAII. 

(sees.  2561,  2565).     They  are  also  liable  for  holding  themselves  out  as  a  cor- 
poration without  having  duly  complied  with  the  law  (sec.  ^Wo). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  only  to  the  ex- 
tent of  their  unpaid  stock  subscriptions  (sees.  2562-2564  inclusive). 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  a  certificate 
signed  by  such  officers  as  the  by-laws  may  prescribe.  Par  value  may  be  any 
amount  (see  sec.  2550).  Every  certificate  must  show  plainly  how  much  of  its 
par  value  has  been  paid  in  (sec.  2550). 

15.  Preferred  Stock.  —  Provision  may  be  made  in  the  articles  of  associa- 
tion for  the  issuance  of  two  or  more  classes  of  stock,  with  such  preferences,  vot- 
ing powers,  restrictions  and  qualifications  thereof  as  shall  be  therein  set  forth. 
After  incorporation  preferred  stock  may  be  issued  by  amending  the  articles  of 
association  to  that  effect  by  the  vote  of  three-fourths  of  all  its  stock  issued  and 
outstanding  (sec.  2552,  as  amended  by  Act  30,  1909). 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  in  exchange  for 
money  or  money's  worth  (sees.  253S,  2540). 

17.  Books.  —  The  stock  books  must  be  kept  at  tht,  principal  office  of  the 
corporation,  and  be  open  to  the  inspection  of  stockholders  and  creditors  during 
business  hours  (sees.  2548,  2566). 

Marks  v.  Parmelee,  13  H.  438. 

18.  Office  and  Agent.  —  The  corporation  must  have  a  principal  office  at 
the  place  designated  in  the  articles  of  association  (sees.  2536-2548). 

19.  Reports.  —  Every  business  corporation  shall  annually  present  a  full 
and  correct  exhibit  of  the  state  of  its  affairs  to  the  Territorial  Treasurer  as  of 
December  31st  of  each  year.  Such  exhibit  shall  be  filed  within  sixty  days  after 
said  date,  or  within  such  further  time,  not  exceeding  thirty  days,  which  may  be 
allowed  by  the  Territorial  Treasurer,  and  shall  contain  such  information  and 
be  in  such  form  as  the  Territorial  Treasurer  shall,  with  the  approval  of  the 
governor,  require  (sec.  2566,  as  amended  by  Act  146,  1909). 

20.  Anti-Trust  Statute.  — The  statute  in  enumerating  unlawful  con- 
spiracies declares  that  the  establishment,  management,  or  conducting  of  a  trust 
or  monopoly  in  the  purchase  or  sale  of  any  commodity  is  a  conspiracy  of  the 
second  degree,  punishable  by  imprisonment  at  hard  labor  not  more  than  two 
years,  or  fine  not  exceeding  $10,000,  in  the  discretion  of  the  court  (sees.  3091, 
3100  ;  see  also  sec.  2541). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Quo  warranto 
will  he  against  corporations  not  legally  incorporated  (sec.  2044  to  2052). 

22.  Amendments.  —  The  Territorial  Treasurer,  with  the  approval  of  the 
governor,  has  power  to  permit  and  allow  amendment  of  articles  of  association, 
provided  they  confer  no  other  corporate  powers  or  privileges  than  could  have 
been  lawfully  conferred  or  obtained  in  the  original  articles  of  association  (sees. 
2545,  2546). 

No  increase  or  extension  of  the  capital  stock  shall  be  legal  and  effective 
unless  a  certificate  shall  first  have  been  filed  with  the  Treasurer  of  the  Territory, 
signed  by  the  president  and  secretary  of  such  corporation,  showing,  first ,  tin- 
present  authorized  capital  stock  of  such  corporation;  second,  the  amount  to 
which  the  capital  stock  thereof  may  be  increased  or  extended  under  its  articles 
of  association;  third,  the  a  mount  of  increase  or  extension  of  such  capital  stock 
duly  authorized  by  its  stockholders.  The  certificate  of  amendment  musl  be  ac- 
companied by  payment  of  the  fee  required  to  be  paid  to  the  Territorial  Treasurer 


DIGEST    OF    INCORPORATION    ACTS.  —  HAWAII. 

upon  the  amount  of  increased  capital  stock  so  authorized  (sec.  2566  B,  as  added 
by  Laws  of  1907,  p.  51). 

23.  Extension  of  Corporate  Existence.  — The  Territorial  Treasurer  has 
power  on  the  expiration  of  any  charter  to  renew  the  same  on  application  to 
him  for  that  purpose  by  two-thirds  of  the  stockholders  of  said  company  and 
the  said  explanation  to  him  of  the  state  of  its  affairs  (sec.  2543). 

24.  Dissolution.  —  Corporate  dissolution  may  be  obtained  by  petition  to 
the  Territorial  Treasurer,  together  with  certificate  setting  forth  the  date  of  the 
meeting  of  the  stockholders  called  for  that  purpose,  at  which  it  was  decided  by 
a  vote  of  three-fourths  of  the  stockholders  to  dissolve  the  corporation,  which 
certificate  shall  be  signed  by  the  presiding  officer  or  secretary  of  said  meeting. 
The  Treasurer  shall  thereupon  enter  such  petition  and  certificate  of  record  in 
his  office,  and  after  sixty  days'  publication  of  notice  in  such  manner  as  he  shall 
prescribe,  he  shall  proceed  to  consider  the  same,  and  when  satisfied  that  the 
vote  certified  has  been  truly  taken,  and  that  all  claims  against  the  corporation 
are  discharged,  he  shall  declare  such  corporation  dissolved  (sees.  256S,  2569, 
Act  135,  Laws  of  1909). 

25.  Annual  License  Fees.  —  A  tax  of  two  per  cent  is  levied  annually  on 
the  net  income  above  actual  operating  and  business  expenses  of  all  companies 
doing  business  in  the  Territory,  no  matter  where  created  or  organized  (sec. 
1279).  Regular  tax  returns  are  required  to  be  made  in  June  of  each  year  (sec. 
1277).  The  returns  of  the  annual  income  tax  of  two  per  cent  on  net  profits 
referred  to  above  must  be  made  between  July  1st  and  31st  of  each  year  (sees. 
1279,  1282). 

Robertson  v.  Pratt,  13  H.  590;  Peacock  v.  Pratt,  121  Fed.  Rep.  772. 

26.  Foreign  Corporations.  —  Every  foreign  corporation  carrying  on  busi- 
ness in  the  Territory  or  acquiring  real  estate  therein,  must  file  in  the  office  of 
the  Territorial  Treasurer  (1)  a  certified  copy  of  its  charter,  (2)  the  names  of 
its  officers,  (3)  the  name  of  some  person  within  the  Territory  of  Hawaii  upon 
whom  process  may  be  served,  (4)  a  certified  copy  of  the  by-laws  of  the  corpora- 
tion (sec.  2623).  Upon  compliance  with  the  foregoing,  and  upon  payment  to 
the  Treasurer  of  a  fee  of  $50,  the  corporation  will  be  permitted  to  transact 
business  within  the  Territory.  It  is  also  necessary  to  procure  an  annual  license 
from  the  Territorial  Treasurer.  Any  foreign  corporation,  except  foreign  in- 
surance companies,  which  does  not  invest  and  use  all  its  capital  in  Hawaii 
cannot  have  an  office  therein  unless  it  shall  first  obtain  from  the  Territorial 
Treasurer  an  annual  license  to  do  so.  The  amoimt  of  this  license  is  $100 
(sec.  2625,  as  amended  by  Act  61,  Laws  of  1909).  Annual  reports  are  re- 
quired the  same  as  of  domestic  corporations  (sees.  2627-2629).  As  to  service 
of  process  upon  foreign  and  domestic  corporations  see  Act  43,  Laws  of  1909. 


294 


DIGEST    OF    INCORPORATION    ACTS.  —  IDAHO. 


IDAHO. 
(The  references  cited  below  are  to  the  Revised  Code  of  Idaho,  1901,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  be  incorporated. 
—  The  Business  Corporation  Act  of  Idaho  is  found  in  the  Civil  (Ode  of  that 
State  (1901),  sees.  2085-2162,  as  amended  by  recent  Session  Laws.  Special 
acts  are  provided  for  bridge,  ferry,  flume,  boom,  gas,  fidelity,  domestic  insur- 
ance, railroad,  telegraph,  telephone,  water,  canal,  and  wagon  road  companies. 
(See  Laws  of  1905,  pp.  150,  162.) 

2.  Incorporators.  —  May  be  any  number  of  persons  not  less  than  three, 
one  of  whom  must  be  a  bona  fide  resident  of  the  State  (Session  Laws  of  1905, 
Act  No.  140,  p.  163  ;  Laws  of  1907,  p.  540). 

3.  Contents  of  the  Articles  of  Incorporation.  —  The  articles  must  set 
forth: 

a.  Name.  —  Similarity  of  names  is  not  specifically  forbidden. 

b.  Purpose.  —  The  Secretary  of  State  allows  articles  to  be  filed  providing 
for  any  number  of  purposes  not  covered  by  special  acts. 

c.  Domiciliary  Office. — The  place  where  the  principal  business  is  to  be 
transacted  must  be  set  forth. 

d.  Corporate  Existence.  —  May  be  any  number  of  years  not  exceeding  fifty. 

e.  Board  of  Directors.  —  The  number  must  not  be  less  than  three  nor  more 
than  fifteen.  The  directors  must  all  be  stockholders,  in  an  amount  to  be  fixed 
by  the  by-laws,  and  at  least  one  must  be  a  citizen  and  bona  fide  resident  of  the 
State  (sec.  2102,  Laws  of  1905,  pp.  161,  165;   Laws  of  1909,  p.  158). 

/.  Capital  Stock.  —  The  amount  of  the  capital  stock  and  the  number  of 
shares  into  which  it  is  divided.  The  capital  stock  as  well  as  the  par  value  of 
the  shares  may  be  any  amount. 

g.  Stock  Subscriptions.  —  If  there  is  capital  stock,  the  amount  actually  sub- 
scribed and  by  whom  should  be  set  forth  (sec.  2089). 

Any  corporation  may  at  its  option  provide  in  its  articles  or  by  amend- 
ment thereof  for  the  election  of  one-third  of  its  directors  for  the  term  of  one 
year,  one-tliird  for  two  years,  and  one-third  for  three  years  (sec.  2089,  as  amended 
by  Session  Laws  of  1905,  p.  166;  Laws  of  1909,  p.  158). 

If  it  is  desired  to  hold  meetings  of  the  board  of  directors  without  the 
State,   provision  ■  may  be   made  therefor  in  the  articles  of  incorporation. 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers  the  following  additional  powers  are  granted:  To  classify  and 
remove  directors;  to  authorize  voting  by  proxy;  to  purchase  their  own  capital 
stock  (Laws  of  1909,  pp.  160,  163,  164);  to  forfeit  stock  for  non-payment  of 
assessments  (Laws  of  1909,  pp.  162,  163);  to  extend  corporate  existence 
(sees.  2107,  2109,  2125-2137,  2144,  2149;  Laws  of  l'.io;,,  p.  1i;d  ;  also  to  cumu- 
late VOteS  in  the  election  of  directors  (Laws  of  1907,  pp.   ">l<>,  .''II'. 

5.  Procuring  the  Charter.  — The  articles  must  lie  subscribed  and  acknowl- 
edged by  at  least  three  of  the  incorporators.  The  articles  must  then  be  filed  in 
the  office  of  the  county  recorder  of  the  county  in  which  the  principal  place  of 
1>ii  iness  of  the  company  is  to  be  t ransacted,  and  a  copy  thereof,  duly  cerl  ified 
by  such  recorder,  must  be  filed  and  recorded  in  the  office  of  the  Secretary  of 
State  (sec.  2094  as  amended  by  Laws  of  1907,  p.  555).    Thereupon  the  Secretary 

295 


DIGEST    OF    INCORPORATION    ACTS.  —  IDAHO. 

of  State  issues  to  the  corporation  a  certificate  that  a  copy  of  the  articles  con- 
taining the  required  statement  of  facts  has  been  filed  in  his  office.  Thereupon 
the  corporate  existence  commences.  If  it  is  proposed  to  purchase  or  locate 
property  in  any  other  county  of  the  State,  there  must  be  filed  with  the  county 
recorder  of  that  county,  within  sixty  days  after  such  purchase  or  location  is 
made,  a  certified  copy  of  the  articles  of  incorporation.  The  due  incorporation 
of  any  company  or  its  rights  to  exercise  corporate  powers  cannot  be  inquired 
into  collaterally  in  any  private  suit  to  winch  such  de  facto  corporation  may  be 
a  party  (sees.  2091,  2094,  2097,  2147;  Session  Laws  of  1905,  p.  161). 

6.  Corporate  Indebtedness.  —  Must  not  exceed  amount  of  authorized 
capital  stock  (sec.  2148). 

7.  Organization  Tax.  —  When  the  authorized  capital  stock  does  not  ex- 
ceed $25,000  the  organization  tax  is  $10 ;  when  it  exceeds  $25,000  and  does  not 
exceed  $50,000,  $20 ;  when  it  exceeds  $50,000  and  does  not  exceed  $100,000, 
$40;  when  it  exceeds  $100,000  and  does  not  exceed  $500,000,  $60;  when  it 
exceeds  $500,000  and  does  not  exceed  $1,000,000,  $100;  when  it  exceeds 
$1,000,000,  $150  (Laws  of  1907,  pp.  215-217). 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State  for  recording 
articles  of  incorporation,  20  cents  per  folio ;  for  issuing  certified  copy  of  articles 
of  incorporation,  20  cents  per  folio  for  copy  and  $1  for  certificate;  for  issuing 
certificates  of  incorporation,  $3  ;  for  filing  certificates  of  increase  of  capital  stock 
there  shall  be  charged  the  fee  for  the  total  capitalization  of  the  corporation  less 
the  amount  already  paid  for  fifing  the  original  articles  of  incorporation ;  for 
filing  certificates  of  all  other  changes  in  articles  of  incorporation,  $5  ;  for  issuing 
certificate  of  increase  or  decrease  in  capital  stock,  $3 ;  for  filing,  recording,  and 
indexing  designation  of  agent  for  foreign  corporations,  $2  (Laws  of  1907,  pp.  215- 
217) ;  for  filing  articles  in  recorder's  office  in  local  county  office,  50  cents,  and 
for  recording  articles  therein,  20  cents  per  folio  ;  for  certified  copy  of  articles 
of  incorporation  by  recorder  of  county  in  which  the  corporation's  principal 
place  of  business  is  located,  20  cents  per  folio. 

9.  Commencing  Business. — Corporations  may  commence  business  as  soon 
as  the  articles  of  incorporation  are  filed.  Within  one  month  after  filing  the  arti- 
cles of  incorporation  a  code  of  by-laws  must  be  adopted  (sec.  2101,  as  amended 
by  Laws  of  1907,  pp.  571,  572).  If  the  corporation  does  not  organize  and 
commence  business  or' the  construction  of  its  works  within  one  year  from  the 
date  of  its  incorporation,  its  corporate  powers  cease  (sees.  2077,  2094,  2098, 
2147). 

10.  Organization  Meeting.  —  The  incorporators  within  one  month  from 
the  date  the  charter  is  issued  should  sign  a  written  agreement  fixing  the  time 
and  place  within  the  State  for  the  organization  of  the  corporation.  In  the 
absence  of  such  written  agreement  the  meeting  is  called  by  advertisement  of 
it  in  advance  of  the  date  of  the  meeting  in  some  newspaper  published  in  the 
county  in  which  the  principal  place  of  business  of  the  corporation  is  located. 
The  written  assent  of  the  holders  of  two-thirds  of  the  stock  subscribed  or  two- 
thirds  of  the  members  shall  be  sufficient  to  adopt  a  code  of  by-laws  without  a 
meeting  for  that  purpose.  The  statute  sets  forth  certain  matters  which  may  be 
covered  by  the  by-laws,  including  penalties  for  violation  of  by-laws,  not  exceed- 
ing in  any  case  $100  for  any  one  offence.  The  by-laws  must  be  certified  by  a 
majority  of  the  directors  and  the  secretary  of  the  corporation,  and  copied  in  the 
book  of  by-laws  to  be  kept  at  the  principal  office  of  the  corporation  within  the 
State  (Laws  of  1907,  p.  572).    Immediately  after  the  adjournment  of  the  incor- 

296 


DIGEST    OF    INCORPORATION    ACTS.  —  IDAHO. 

porators'  meeting  the  directors  named  in  the  articles  of  incorporation  should 
meet,  and  after  the  election  of  a  chairman  and  secretary  should  proceed  to  the 
election  of  the  officers  named  in  the  by-laws.  These  officers  under  the  statute 
must  consist  of  a  president,  who  is  himself  a  director,  and  a  secretary  and  treas- 
urer. The  law  provides  that  at  the  first  meeting  at  which  the  by-laws  are 
adopted,  or  at  such  subsequent  meeting  as  may  be  then  designated,  directors 
must  be  elected  to  hold  their  office  for  one  year  and  until  their  successors  are 
elected  and  qualify.  Organization  meeting  must  be  held  within  the  State  in 
the  absence  of  any  statute  authorizing  such  meetings  to  be  held  without  the 
State  (see.  2103 ;   Session  Laws  of  1905,  pp.  165,  166). 

11.  Meetings  of  Stockholders  and  Directors.  —  All  meetings  of  stock- 
holders must  be  held  at  the  principal  place  of  business  of  the  corporation  within 
the  State  (Laws  of  1905,  p.  165).  Meetings  of  the  board  of  directors  or  executive 
committee  must  be  held  at  the  principal  place  of  business  of  the  corporation 
within  the  State,  unless  otherwise  provided  in  the  articles  of  incorporation  or 
amended  articles  or  by-laws,  or  by  resolution  of  the  board  (Laws  of  1905,  pp. 
164-166). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  a  board  of  not  less  than  three  nor  more  than  fifteen  directors, 
to  be  elected  from  among  the  stockholders.  At  least  one  of  the  directors  must 
in  all  cases  be  a  citizen  and  actual  bona  fide  resident  of  the  State.  The  directors 
must  all  be  stockholders  in  an  amount  to  be  fixed  by  the  by-laws.  A  majority 
of  the  board  must  be  present  in  order  to  constitute  a  quorum  thereof.  The 
directors  may  be  divided  into  three  classes,  if  desired  (Laws  of  1909,  p.  158). 
All  corporations  are  authorized  to  appoint  an  executive  committee  equal  in 
number  to  at  least  one-third  of  the  board,  such  committee  to  have  all  the  rights 
and  powers  and  privileges  of  the  full  board  (Laws  of  1905,  pp.  161-165;  Laws 
of  1909,  p.  159).  The  cumulative  system  of  voting  for  directors  is  in  force  in 
the  State  (Laws  of  1907,  pp.  540,  541).  Director's  may  be  removed  by  a  two- 
thirds  vote  of  the  stock  at  a  regular  meeting  called  on  notice  specifying  the  pur- 
pose according  to  the  by-laws.  The  meeting  may  be  called  by  the  president  or 
a  majority  of  the  directors  or  by  one-half  of  the  voting  stock  (sec.  2107,  Laws  of 
1909,  p.  160).  The  power  to  adopt  by-laws  may  be  delegated  to  the  board  of 
directors,  if  the  stockholders  so  elect  (Laws  of  1907,  p.  571). 

b.  Liabilities.  —  Directors  are  jointly  and  severally  liable  for  authorizing 
the  payment  of  dividends  other  than  from  the  surplus  profits  arising  from  the 
business  (Laws  of  1909,  pp.  159,  160).  Tiny  arc  also  liable  for  dividing  or 
withdrawing  or  paying  to  the  stockholders  any  part  of  the  capital  stock  unless 
they  enter  their  dissent  on  the  minutes  of  the  directors  at  the  time,  or,  when 
not  present,  as  soon  as  they  are  informed  of  the  action  referred  to  (Laws  of  1909, 
pp.  159,  160).  They  are  also  subject  to  further  liability  for  certain  acts  specified 
in  the  Penal  Code  (sees.  2106,  2113;  P.  C,  5010-5026;  see  also  Laws  of  1907, 
pp.  25,  26,  relative  to  making  false;  reports,  prospecti,  etc.). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  the  amount 
unpaid  upon  the  par  or  face  value  of  the  shares  owned  by  them.  To  avail 
themselves  of  this  provision  of  the  statute  they  must  cause  to  be  written  or 
printed  under  the  corporate  name  on  its  stock  certificates,  letters,  bill  heads, 
and  all  official  documents  the  word  "limited"  (sees.  2119,  2120,  Laws  of  1909, 
pp.  160,  101;    see  also  Cons.,  Art.  XI.  sec.  17). 

14.  Preferred  Stock.  —  Every  corporation  may  create  two  or  more  kinds 
of  stock,  of  such  classes,  with  such  voting  powers  or  restrictions  or  qualifications 

297 


DIGEST    OF    INCORPORATION    ACTS.  —  IDAHO. 

thereof  as  shall  be  stated  or  expressed  in  the  articles  of  incorporation  or  in  any 
certificate  of  amendment  thereto,  or  as  shall  be  fixed  in  the  by-laws ;  and  the 
power  to  increase  or  decrease  the  stock  as  is  in  this  code  elsewhere  provided 
shall  apply  to  all  or  any  of  the  classes  of  stock ;  but  no  preferred  stock  shall  be 
issued  except  for  cash  or  its  equivalent,  nor  for  less  than  par  value  of  its 
shares,  and  at  no  time  shall  the  total  amount  of  the  preferred  stock  issued  and 
outstanding  exceed  two-thirds  of  the  capital  stock  paid  in  cash  or  property; 
and  such  preferred  stock  may,  if  desired,  be  made  subject  to  redemption  at  any 
time  after  three  years  from  the  issue  thereof  at  a  price  not  less  than  par,  and  the 
holders  thereof  shall  be  entitled  to  receive  and  the  corporation  shall  be  bound  to 
pay  thereon  a  fixed  yearly  dividend  of  eight  per  cent,  payable  quarterly,  semi- 
annually or  annually,  before  any  dividend  may  be  set  apart  or  paid  on  the 
common  stock,  and  such  dividend  may  be  made  cumulative.  In  no  event 
shall  the  holder' of  preferred  stock  be  personally  liable  for  the  debts  of  the  cor- 
poration, but  in  case  of  insolvency,  its  debts  or  other  liabilities  shall  be  paid  in 
preference  to  the  preferred  stock.  On  the  dissolution  of  a  corporation,  volun- 
tarily or  otherwise,  the  holders  of  the  preferred  stock  shall  be  entitled  to  have 
their  shares  redeemed  at  par  before  any  distribution  of  any  part  of  the  assets 
of  the  corporation  shall  be  made  to  the  holders  of  the  common  stock  (Laws 
of  1909,  pp.  163,  164). 

15.  Payment  of  Capital  Stock. — Under  the  Idaho  Constitution  no  cor- 
poration can  issue  stock  except  for  labor  done,  services  performed,  or  money  or 
property  actually  received.  When  any  corporation  issues  stock  or  bonds  for 
labor  done,  services  performed,  or  property  actually  received,  the  judgment  of 
the  directors  of  such  corporation  as  to  the  value  of  such  labor,  services,  or  prop- 
erty shall,  in  the  absence  of  fraud  in  the  transaction,  be  conclusive.  This  statute, 
however,  provides  that  money  actually  paid  upon  the  indebtedness  of  the 
corporation  as  provided  by  such  statute  may  be  credited  upon  stock  subscrip- 
tions to  the  full  amount  so  paid  (Cons.,  Art.  XI.  sec.  9;  Laws  of  1899,  p.  115, 
amending  sec.  2119;   Laws  of  1909,  p.  164). 

16.  Books.  —  The  stock  and  transfer  books  must  be  kept  within  the  State 
at  the  principal  office  of  the  corporation.  Also  a  book  of  by-laws  must  be  kept 
at  the  company's  office  within  the  State  (sec.  2101,  as  amended  by  Laws  of  1907, 
pp.  571,  572;  Laws  of  1909,  pp.  158,  159).  All  books  are  open  to  inspection 
of  stockholders  and  creditors  (sees.  2101',  2150,  2151;  Laws  of  1909,  pp.  158, 
159). 

17.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate  show- 
ing the  number  of  shares  owned  by  him,  signed  by  the  president  and  secretary, 
or  such  other  officers  as  may  be  authorized  by  the  by-laws.  All  corporations 
may  provide  in  their  by-laws  for  issuing  certificates  prior  to  the  full  payment 
thereof  (sec.  2121 ;  Laws  of  1909,  p.  162). 

18.  Office.  —  Every  corporation  must  maintain  an  office  within  the  State 
(sees.  2101,  2151). 

19.  Reports.  —  All  corporations,  both  domestic  and  foreign,  except  insur- 
ance and  surety  companies  and  mining  corporations  owning  mines  which  are 
not  productive,  worked,  or  operated,  shall  during  the  month  of  June  of  each 
year  and  on  or  before  the  1st  day  of  July  of  each  year  furnish  to  the  Secretary 
of  State,  upon  blanks  to  be  furnished  by  him,  a  correct  statement,  sworn  to  by 
one  of  the  officers  of  the  corporation  or  managing  agent  or  authorized  attorney  in 
fact  in  this  State  of  any  foreign  corporation,  before  some  officer  duly  authorized 
to  administer  oaths,  setting  forth  the  name  of  the  corporation,  the  location  of 

298 


DIGEST    OF    INCORPORATION    ACTS.  —  IDAHO. 

its  principal  office,  the  names  of  the  president,  secretary,  and  treasurer,  with 
the  post-office  address  of  each,  date  of  annual  election  of  directors  and  officers 
of  such  corporation,  the  amount  of  authorized  capital  stock,  the  number  of 
shares,  the  par  value  of  each  share,  the  amount  of  capital  stock  subscribed, 
the  amount  of  capital  stock  issued,  and  the  amount  of  capital  stock  paid  up. 
Every  foreign  corporation  shall  include  in  such  statement  the  names  and 
post-office  addresses  of  its  managing  agent  and  attorneys  in  fact  in  the  State 
(Laws  of  1907,  pp.  235,  236;   Laws  of  1909,  pp.  S,  9). 

20.  Anti-Trust  Statute.  —  Combinations  for  fixing  prices  on  any  article 
of  commerce,  of  produce,  of  sale,  or  of  consumption  by  the  people  are  illegal. 
(See  Cons.,  Art.  XL  sec.  18.) 

21.  Statutory  Ground  for  Forfeiture  of  Charter.  —  Failure  to  organize 
and  transact  the  corporate  business  or  the  construction  of  corporate  works  within 
one  year  from  the  date  of  incorporation  is  a  ground  for  forfeiture  (sec.  21  17). 

22.  Extension  of  Corporate  Existence.  —  Every  corporation  formed  for 
a  period  less  than  fifty  years  may,  at  any  time  prior  to  the  expiration  of  the 
term  of  its  corporate  existence,  extend  such  term  to  a  period  not  exceeding 
fifty  years  from  its  formation.  Such  extension  may  be  made  by  a  two-thirds 
vote  of  the  stockholders  cast  at  a  meeting  called  by  the  directors  for  that  pur- 
pose. The  certificate  of  the  proceedings  must  be  signed  by  the  chairman  and 
secretary  of  the  meeting  and  be  filed  in  the  office  of  the  county  recorder  where 
the  original  articles  of  incorporation  are  filed,  and  a  certified  copy  thereof  must 
be  filed  in  the  office  of  the  Secretary  of  State  (sees.  2160,  2161). 

23.  Annual  License  Tax.  —  Every  corporation,  domestic  as  well  as 
foreign,  shall  pay  an  annual  license  fee  in  proportion  to  the  amount  of  its  au- 
thorized capital  stock,  as  follows,  to  wit :  Where  such  capital  stock  shall  not 
exceed  $5,000,  an  annual  license  fee  of  $10  must  be  paid.  Where  the  capital 
stock  exceeds  $5,000  and  does  not  exceed  $10,000,  $12.50;  where  the  capital 
stock  exceeds  $10,000  and  does  not  exceed  $25,000,  $15 ;  where  the  capital  stock 
shall  exceed  $25,000  and  shall  not  exceed  $50,000,  $22.50  ;  where  the  capital 
stock  exceeds  $50,000  and  does  not  exceed  $100,000,  $37.50;  where  the  capi- 
tal stock  exceeds  $100,000  and  shall  not  exceed  $250,000,  $52.50;  where  the 
capital  stock  shall  exceed  $250,000  and  shall  not  exceed  $500,000,  $75.  If 
the  capital  stock  shall  exceed  $500,000  and  shall  not  exceed  $1,000,000,  $90. 
Where  the  capital  stock  shall  exceed  $1,000,000  and  shall  not  exceed  $2,000,000, 
$130.  If  such  capital  stock  shall  exceed  $2,000,000  then  the  annual  license  fee 
shall  be  $150.  The  fees  above  provided  for  become  due  and  payable  within 
thirty  days  from  the  15th  day  of  July  of  each  year.  The  annual  license  fee 
required  by  this  act  shall  be  paid  in  advance  for  the  fiscal  year  beginning  July  1  st 
of  each  year,  and  in  case  new  corporations  arc  formed  or  enter  the  State  during 
the  fiscal  year,  the  first  year's  fee  shall  be  proportionate  to  such  fraction  of  a 
year  (Laws  of  1907,  pp.  235-237). 

24.  Amendments.  —  Articles  may  be  amended  for  the  purpose  of  increas- 
ing the  number  of  directors  by  vote  of  a  majority  of  the  stockholders.  The 
amendment  when  adopted  must  be  filed  in  the  manner  provided  for  the  filing 
of  original  articles  (Laws  of  1905,  p.  161).  Corporations  may  increase  or  de- 
crease their  capital  stock  in  the  following  manner:  (1)  By  a  majority  vote 
of  the  directors  there  may  be  called  a  meeting  of  the  stockholders,  to  he  con- 
vened for  the  purpose  of  increasing  or-  diminishing  the  capital  stock.  (2)  Per- 
sonal notice  of  the  time  and  place  of  such  meeting  and  of  the  object  thereof 
must  be  served  on  each  stockholder  at  least  thirty  days  prior  to  the  date  of 

299 


DIGEST    OF    INCORPORATION    ACTS.  —  IDAHO. 

such  proposed  meeting ;  or  in  lieu  thereof  a  notice  must  be  published  at  least 
once  a  week  in  a  newspaper  published  in  the  county  where  the  principal  place 
of  business  is  located  for  at  least  thirty  days.  (3)  The  notice  must  also  contain 
the  amount  to  which  it  is  proposed  to  increase  or  diminish  the  capital  stock. 
(4)  The  capital  stock  must  in  no  case  be  diminished  to  an  amount  less  than  the 
indebtedness  of  the  corporation  or  the  estimated-  cost  of  the  works  which  it 
may  be  the  object  or  purpose  of  the  corporation  to  construct.  (5)  At  least 
two-thirds  of  the  entire  capital  stock  must  vote  in  favor  of  such  increase  or 
diminution  before  the  same  is  effected.  (6)  A  certificate  signed  and  verified  by 
the  chairman  and  secretary  of  the  meeting  must  be  made,  showing  a  strict  com- 
pliance with  the  requirements  of  this  section,  the  amount  to  which  the  capital 
stock  has  been  increased  or  diminished,  the  amount  of  stock  represented  at  the 
meeting,  the  vote  by  which  the  object  was  accomplished.  (7)  The  certificate 
must  be  subscribed  by  a  majority  of  the  directors  and  duplicates  made,  one  to 
be  filed  in  the  office  of  the  county  recorder  and  one  to  be  filed  and  recorded  in 
the  office  of  the  Secretary  of  State  as  provided  for  original  articles  of  incorpora- 
tion (Laws  of  1907,  pp.  540,  541).  (8)  The  written  assent  of  the  holders  of  three- 
fourths  of  the  subscribed  capital  stock  is  as  effectual  to  authorize  the  increase  or 
diminution  of  the  capital  stock  as  if  the  meeting  were  called  and  held ;  and  upon 
written  assent,  the  directors  may  proceed  to  make  the  certificate  herein  pro- 
vided for  (sec.  2148). 

Corporations  may  also  change  their  principal  place  of  business  from  one 
place  to  another  within  the  State.  Before  such  change  is  made  the  consent 
in  writing  of  the  holders  of  two-thirds  of  the  capital  stock  must  be  obtained 
and  filed.  Notice  of  such  intention  to  change  must  be  published  at  least  once 
a  week  for  three  successive  weeks,  giving  the  name  of  the  county  where  it  is 
situated  and  that  to  which  it  is  intended  to  remove  (sec.  2118). 

Any  corporation  may  amend  its  articles  of  incorporation  so  as  to  provide 
for  the  issuance  of  preferred  stock  or  an  increase  thereof  in  the  same  manner 
as  is  now  provided  by  law  for  amendments  increasing  the  capital  stock  of  cor- 
porations and  the  par  value  of  shares  therein  (Laws  of  1909,  pp.  164,  165). 

Any  corporation  may  amend  its  articles  of  incorporation  in  the  following 
respects,  to  wit :  change  the  name  of  the  corporation ;  the  purposes  for  which 
the  corporation  is  formed ;  the  place  where  its  principal  place  of  business  is  to 
be  located ;  the  number  of  its  directors ;  increase  or  diminish  the  capital  stock, 
or  in  any  other  respect  not  in  violation  of  law  desired  by  the  stockholders;  pro- 
vided that  the  capital  stock  must  in  no  case  be  diminished  to  an  amount  less 
than  the  indebtedness  of  the  corporation  or  the  estimated  cost  of  the  work 
which  are  made  the  objects  or  purposes  of  the  corporation  to  construct.  Any 
amendment  shall  be  made  and  certified  in  the  manner  prescribed  in  section  2773 
for  increasing  or  diminishing  the  capital  stock  and  filed  in  the  office  of  the 
county  recorder  and  Secretary  of  State  (Laws  of  1909,  pp.  164,  165). 

25.  Dissolution.  —  Corporations  may  be  dissolved  upon  application  to  the 
courts  (sec.  2159;  C.  C.  P.,  sees.  3834-3840). 

S.  S.  &  T.  Co.  v.  Piper,  4  Idaho,  463;  40  Pac.  144. 

26.  Foreign  Corporations.  —  Every  foreign  corporation  before  doing 
business  within  the  State  must  file  and  record  with  the  county  recorder  of  the 
county  in  which  its  principal  business  is  to  be  transacted  a  copy  of  its  articles 
of  incorporation  certified  by  the  Secretary  of  State  of  the  State  in  which  said 
corporation  was  organized,  and  file  in  the  office  of  the  Secretary  of  State  a  copy 

300 


DIGEST    OF   INCORPORATION    ACTS.  —  IDAHO. 

of  its  articles  certified  by  the  recorder,  and  pay  to  the  Secretary  of  State  the  same 
fees  as  provided  for  incorporating  domestic  corporations.  They  must  witliin 
three  months  from  the  time  of  commencing  business  within  the  State  also  file 
in  the  office  of  the  clerk  of  the  District  Court  of  the  county  where  such  principal 
place  of  business  is  to  be  located,  and  also  in  the  office  of  the  Secretary  of  State, 
a  designation  of  some  person  residing  in  said  county  on  whom  process  may  be 
served  (Cons.,  Art.  X. ;  R.  S.,  sees.  2119,  2162,  as  amended  by  Laws  of  1903,  pp. 
49,  50;  Laws  of  1907,  p.  319).  Foreign  corporations  must  also  pay  the  same 
annual  license  tax  as  is  required  of  domestic  corporations  and  make  the  same 
reports  (see  ante,  sec.  23;  Laws  of  1907,  p.  235). 

Katz  v.  Herrick  (Idaho),  86  Pac.  873;  Vermont  Loan  &  Trust  Co.  v.  Hoffman,  5  Idaho, 
376;  49  Pac.  314;  Boyer  v.  N.  P.  R.  R.  Co.  (Idaho),  66  Pac.  826;  Thum  v.  Pyke  (Idaho), 
66  Pac.  167;   B.  C.  M.  Co.  v.  Frizzell  (Idaho),  81  Pac.  58. 


301 


DIGEST    OF    INCORPORATION    ACTS. ILLINOIS. 


ILLINOIS. 

(The  references  cited  below  are  to  the  Revised  Statutes,  1899,  chap.  32,  unless  otherwise 
stated.) 

1.  Statute  under  which  Business  Corporations  may  be  incorporated. 

—  The  Business  Corporation  Act  of  Illinois  is  found  in  the  Revised  Statutes 
of  that  State,  sees.  985-1063  inclusive.  Special  acts  are  provided  for  banking, 
trust,  insurance,  real  estate,  brokerage,  and  railway  corporations.  (See  also 
Laws  of  1904,  chap.  66.) 

People  ex  rel.  Bonney  v.  Rose,  188  111.  268. 

2.  Incorporators.  —  Any  number  of  persons  not  less  than  three  nor 
more  than  seven  may  form  a  corporation.  There  are  no  residential  require- 
ments (sec.  2). 

3.  Statement  of  Incorporators  (sec.  2).  —  The  incorporators  must  make 
a  statement  setting  forth : 

a.  The  Name  of  the  Proposed  Corporation.  —  No  license  can  be  issued  to 
two  companies  having  the  same  or  a  similar  name  as  any  domestic  corpora- 
tion, nor  can  any  domestic  corporation  assume  the  same  or  a  similar  name  to 
that  of  any  foreign  corporation  previously  admitted  to  do  business  in  the  State 
(sees.  2,  28$). 

b.  Purpose. — The  statute  uses  the  singular  noun  "object."  The  Secre- 
tary of  State  permits  the  insertion  of  any  number  of  purposes  not  covered  by 
special  acts. 

c.  Capital  Stock.  —  Capital  stock  may  be  any  amount. 

d.  Number  of  Shares.  —  The  par  value  of  the  shares  must  be  not  less  than 
$10  nor  more  than  $100  (sec.  7). 

e.  Domiciliary  Office.  —  The  location  of  the  principal  office  within  the 
State. 

4.  Statutory  Powers.  — The  statute  enumerates  the  common  law  powers 
of  corporations.  There  is  a  limitation  even  on  these  to  the  extent  that  all  real 
estate  acquired  by  the  corporation  in  satisfaction  of  any  liability  shall  be  offered 
at  public  auction  at  least  once  in  every  year,  unless  the  same  is  necessary  and 
suitable  for  the  business  of  the  corporation.  The  power  to  adopt  by-laws  is 
granted  to  the  board  of  directors  (sec.  6).  The  statute  expressly  authorizes 
mining  and  manufacturing  corporations  to  hold  stock  of  one  or  more  railroads 
connecting  different  plants  of  the  corporation  with  each  other  and  with  other 
railroads  or  wharves.  Whenever  consolidation  takes  place  the  consolidated 
company  is  liable  for  all  debts  of  the  two  consolidated  corporations.  Power 
is  also  given  to  authorize  voting  of  stockholders  by  proxy,  to  classify  directors, 
and  to  forfeit  stock  for  non-payment  of  assessments.  Cumulative  voting  in 
election  of  directors  is  mandatory  (sees.  3,  6,  7 ;  Cons.,  Art.  XL  sec.  3  ;  see  also 
Laws  of  1904,  chap.  66). 

Com.  N.  B.  v.  Burch,  141  111.  519;  31  N.  E.  420;  People  ex  rel.  v.  P.  P.  Car  Co.,  175  111. 
125;    First  Nat.  Bank  v.  Company,  191  111.  128. 

5.  Procuring  the  Charter.  —  The  statement  must  be  signed  and  acknowl- 
edged by  each  of  the  incorporators  and  must  then  be  filed  in  the  office  of  the 
Secretary  of  State.    If  the  object  for  which  such  corporation  is  proposed  to  be 

302 


DIGEST    OF    INCORPORATION    ACTS.  —  ILLINOIS. 

organized  is  clearly  and  distinctly  stated  and  is  a  lawful  object,  the  Secretary 
of  State  shall  thereupon  issue  to  said  persons  a  license  as  commissioners  to 
open  books  for  subscription  to  the  capital  stock  of  the  proposed  corporation  at 
sucli  time  and  place  as  they  may  determine.  Power  is  given  to  the  Secretary 
of  State  to  propound  to  the  incorporators  such  interrogatories  as  lie  shall  deem 
necessary  to  ascertain  the  object  for  winch  the  corporation  is  formed.  The 
commissioners  are  required  to  make  a  full  report  of  their  proceedings,  includ- 
ing a  copy  of  the  notice  of  the  opening  of  books  of  subscription  and  of  the  sub- 
scription list,  a  statement  of  the  amount  of  capital,  not  less  than  one-half  actually 
paid  in,  the  amount  of  such  capital  not  paid  in,  what  disposition  lias  been  made 
of  stock  subscribed  and  not  paid  ;  and  if  any  proportion  of  the  capital  -tuck  has 
been  paid  in  property,  the  same  shall  be  appraised  by  such  commissioners  and 
they  shall  report  the  fair  cash  value  thereof.  The  report  must  contain  the  names 
of  the  directors  elected  with  their  residence  and  terms  of  office,  and  must  be 
sworn  to  by  at  least  a  majority  of  the  commissioners,  and  the  same,  together 
with  a  statement  setting  forth  the  post-office  address,  including  street  and 
number  of  the  office  of  the  corporation,  must  be  filed  with  the  Secretary  of  State. 
The  latter  thereupon  issues  a  certificate  of  the  complete  organization  of  the  cor- 
poration, making  a  part  thereof  a  copy  of  all  the  papers  filed  in  his  office  in  and 
about  the  organization  of  the  corporation  duly  authenticated  under  his  hand 
and  seal  of  State.  This  certificate  must  then  be  recorded  in  the  office  of  the 
recorder  of  deeds  where  the  principal  office  of  said  company  is  located,  where- 
upon the  corporation  shall  be  deemed  fully  organized  and  may  proceed  to 
do  business  (Laws  of  1905,  pp.  130-133).  The  corporation  must  be  organized 
and  proceed  to  do  business  within  two  years  after  the  issuance  of  the  hcense 
by  the  Secretary  of  State  relative  to  the  opening  of  books  for  subscription 
to  the  capital  stock. 

People  v.  Rose,  188  111.  268;  59  N.  E.  432;  Elgin  111.  Watch  Co.  v.  Loveland,  132  Fed. 
41;  Gade  v.  Company,  165  111.  367;  Edwards  v.  Company,  190  111.  467;  Ricker  v.  Larkin,  27 
111.  App.  625. 

6.  Corporate  Indebtedness.  —  Corporate  indebtedness  should  not  ex- 
ceed the  authorized  capital  stock  (sec.  16). 

7.  Organization  Tax.  —  The  organization  tax  on  any  capitalization  up 
to  $2,500  is  $30;  up  to  $5,000  is  $50;  over  $5,000,  $50,  and  an  additional  $1 
for  each  thousand  dollars  of  capitalization  over  $5,000  (Laws  of  1899,  p.  117). 

8.  Filing  and  Recording  Fees.  —  There  is  no  filing  fee  payable  to  the 
Secretary  of  State  other  than  the  organization  tax.  There  is  a  charge  for  re- 
cording the  statement  of  incorporators  and  the  return  of  the  commissioner  of 
15  cents  per  hundred  words.  For  certified  copy  of  the  foregoing  the  charge  is  1 5 
cents  per  hundred  words  and  $1  for  affixing  the  secretary's  certificate  thereto. 
The  charge  for  filing  amendments  to  articles  of  incorporation  is  $1.  The  re- 
cording fees  in  local  county  office  are  as  follows  :  In  counties  of  first  class  (popu- 
lation not  over  25,000),  10  cents  per  hundred  words;  in  counties  of  second 
class  (over  25,000  and  not  exceeding  100,000),  8  cents  per  hundred  words  and 
certificate  25  cents  additional;  in  counties  of  third  class  (population  exceed- 
ing 100,000),  6  cents  per  hundred  words  and  25  cents  additional  lor  certificate. 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  the  Secretary  of  State  issues  a  certificate  of  complete  organization 
and  the  same  is  recorded  in  the  office  of  the  recorder  of  deeds  of  the  county 
where  the  principal  place  of  business  of  said  corporation  is  located.  The  cor- 
poration must  organize  and  proceed  to  business  within   two  yen     after  the 

303 


DIGEST    OF    INCORPORATION    ACTS.  —  ILLINOIS. 

Secretary  of  State  issues  his  certificate  of  complete  organization  (sec.  4).  All 
the  capital  stock  must  be  subscribed  in  good  faith,  and  one-half  thereof  must 
be  actually  paid  in  (sec.  8;  Laws  of  1905,  p.  131).  If  the  incorporators  assume 
to  act  as  a  corporation  before  the  requirements  of  the  law  are  fully  complied 
with,  they  are  jointly  and  severally  liable  for  all  debts  contracted  (sec.  18). 

People  v.  N.  S.  Bank,  129  111.  618;  22  N.  E.  288;  Gent.  v.  M.  &  M.  I.  Co.,  107  111.  652; 
Allman  v.  Company,  88  111.  521;   Merrick  v.  Company,  111  111.  App.  153. 

10.  Organization  Meeting.  —  In  the  absence  of  any  statute  providing 
otherwise,  this  meeting  must  be  held  within  the  State.  The  commissioners 
appointed  by  the  Secretary  of  State  to  receive  stock  subscriptions  have  power 
under  the  statute  to  convene  a  meeting  of  the  subscribers  to  the  capital  stock 
of  the  corporation  for  the  purpose  of  electing  directors,  etc.  Notice  of  this 
meeting  may  be  waived  in  writing  (the  statute  requires  ten  days'  notice),  the 
time  and  place  fixed  for  said  meeting  to  be  designated  therein.  At  this  meet- 
ing the  subscribers  to  the  capital  stock  may  vote  in  person  or  by  proxy.  Cumu- 
lative voting  is  permitted,  if  desired.  Stockholders  may  divide  the  board  of 
directors  into  three  classes,  to  hold  office  for  one,  two,  and  three  years  respec- 
tively. After  the  Secretary  of  State  has  issued  a  certificate  of  complete  or- 
ganization, the  board  of  directors  should  meet,  and  after  effecting  a  temporary 
organization  should  first  adopt  a  code  of  by-laws.  They  then  should  proceed 
to  the  election  of  a  president,  secretary,  and  treasurer,  and  such  other  officers 
as  shall  be  designated  by  the  by-laws  so  adopted  (sec.  3). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  within  the  State.  Directors'  meetings  to  be  valid  must  be  held 
within  the  State,  unless  any  action  taken  by  the  board  without  the  limits  of 
the  State  is  either  authorized  or  the  action  thereat  taken  ratified  by  a  vote  of 
two-thirds  of  the  directors  cast  at  a  regular  meeting  of  said  board  held  within 
the  State  (sees.  20,  22). 

Harding  v.  Company,  182  111.  551;  55  N.  E.  577. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  not  be  less  than  three  nor  more  than  eleven  directors.  There  are 
no  residential  requirements.  Directors  may  be  divided  into  classes,  if  de- 
sired. The  right  to  cumulate  votes  for  directors  is  mandatory  (sees.  3,  6). 
The  act  provides  that  the  directors  may  adopt  by-laws  for  the  government  of 
the  officers  and  affairs  of  the  company  (sec.  6). 

Fey  v.  Company,  32  111.  App.  618. 

b.  Liabilities.  —  If  the  indebtedness  of  any  corporation  shall  exceed  the 
amount  of  its  capital  stock,  the  directors  assenting  thereto  are  individually 
liable  for  such  excess  to  the  creditors  of  the  corporation.  They  are  also  jointly 
and  severally  liable  for  all  debts  of  the  corporation  then  existing  or  thereafter 
contracted  when  they  declare  and  pay  any  dividends  when  the  corporation  is  in- 
solvent, or  any  dividend  the  payment  of  which  would  render  the  corporation 
insolvent  or  which  diminishes  the  amount  of  its  capital  stock ;  also  for  assum- 
ing to  exercise  corporate  powers  before  all  the  capital  stock  is  subscribed  in 
good  faith  (sees.  16,  18,  19,  21).  If  any  certified  report  or  statement  made  or 
published  notice  given  by  the  officers  of  any  corporation  shall  be  false 
in  any  material  representation,  the  officers  who  have  signed  the  same  know- 
ing it  to  be  false  shall  be  jointly  and  severally  liable  for  all  damages  arising 
therefrom. 

Greene  v.  Masten  et  al.,  66  111.  App.  345;    Kent  v.  Clark,  181  111.  237;    54  N.  E.  967. 
304 


DIGEST    OF    INCORPORATION"    ACTS.  —  ILLINOIS. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  personally  liable  foi 
the  amount  unpaid  upon  their  stock  (sec.  8).  The  law  also  provides  that  all 
persons 'assuming  to  exercise  corporate  powers  or  to  use  a  corporate  name  with- 
out complying  with  the  law  in  regard  to  procuring  charters,  before  all  stock 
named  in  the  articles  of  incorporation  is  subscribed  in  good  faith,  shall  be 
liable  for  all  debts  and  liabilities  contracted  by  them  in  the  name  of  such 
corporation  (sec.   18). 

Sprague  v.  Nat.  Bank,  172  111.  149:  50  N.  E.  19;  First  Nat.  Bank  v.  Company,  191  111. 
12S;  60  N.  E.  859;  Sherwood  v.  Bank,  195  111.  112;  62  N.  E.  835;  Foote  v.  Bank,  191  111. 
600;  62  N.  E.  S34;  McCoy  v.  Exposition,  1S6  111.  356;  57  N.  E.  1043;  Florsheiin  v.  Bank, 
192  111.  382;    61  N.  E.  491;    Coleman  v.  Howe,  154  111.  458;    37  N.  E.  725. 

14.  Preferred  Stock.  —  There  is  no  statutory  provision  expressly  author- 
izing the  issuance  of  preferred  stock. 

First  Nat.  Bank  v.  Company,  191  111.  128;    60  N.  E.  859. 

15.  Payment  of  Capital  Stock. — The  statute  is  silent  as  to  how  the 
capital  stock  shall  be  paid.  Under  the  common  law  rule,  in  the  absence  of  any 
statutory  prohibition,  stock  may  be  paid  for  in  cash  or  in  property  taken  in 
good  faith  at  a  fair  valuation  (sec.  4;  as  amended  by  Laws  of  1905,  p.  131). 

G.  C.  &  S.  R.  Co.  v.  Kelly,  77  111.  426;  Higgins  v.  Lansingh,  154  111.  301;  Farwell  v.  Com- 
pany, 161  111.  522;  S.  R.  C.  S.  Co.  v.  Rankin,  152  111.  622;  Sprague  v.  Nat.  Bank,  172  111. 
149;  Dean  v.  Baldwin,  99  111.  App.  582;  Parmelee  v.  Price,  208  111.  544;  70  N.  E.  725;  M. 
B.  I.  Co.  v.  Company,  210  111.  26;   71  N.  E.  22. 

16.  Books.  —  The  directors  must  keep  at  the  principal  office  within  the 
State  books  of  account  of  the  corporate  business  (sec.  13).  They  are  open  to 
inspection  of  stockholders. 

17.  Stock  Certificates.  —  Each  shareholder  is  entitled  to  a  certificate 
showing  the  number  of  shares  owned  by  him,  signed  by  such  officers  as  the 
by-laws  shall  prescribe.  Par  value  of  shares  must  not  be  less  than  $10  nor 
more  than  S100. 

18.  Office.  —  Every  corporation  must  maintain  an  office  within  the  State 
(sees.  2,  13). 

19.  Reports.  —  Before  receiving  a  certificate  of  complete  organization, 
each  corporation  shall  file  with  the  Secretary  of  State  the  post-office  address 
of  its  business  office,  giving  street  and  number,  and  it  shall  annually  between 
February  1st  and  March  1st  file  with  the  Secretary  of  State  a  statement  show- 
ing the  location  of  the  principal  office  within  the  State,  with  town,  street,  and 
number,  names  of  its  officers  and  their  residences,  —  town,  street,  and  number, 
—  date  of  expiration  of  their  terms  of  office ;  whether  or  not  the  corporation 
is  pursuing  an  active  business  under  its  charter,  and  the  kind  of  business ; 
report  must  be  under  the  corporate  seal,  signed  and  sworn  to  by  some  officer 
of  the  corporation,  and  a  fee  of  $1  must  be  paid  to  the  Secretary  of  State 
(Laws  of  1903,  pp.  121,  122).  Within  twenty  days  from  December  1st  of  each 
year  the  president,  secretary,  or  treasurer  must  file  in  the  office  of  the  Secretary 
of  State,  and  record  in  the  recorder's  office  of  the  county  wherein  the  principal 
place  of  business  of  the  corporation  is  located,  a  duly  verified  statement  and 
description  of  any  real  estate  acquired  during  the  year  in  securing  any  debt 
or  liability  due  the  corporation,  with  date  of  acquiring  title  (sec.   17). 

All  corporations  except  coal  mining,  manufacturing,  printing,  newspaper, 
or  stock-breeding  corporations  must  file  with  the  assessor  of  the  district  in  which 
the  office  or  place  of  business  is  located,  in  addition  to  the  schedule  of  other  prop- 
erty to  be  listed,  a  sworn  statement  of  their  capital  stock,  stating:   (1)  name  and 

20  305 


DIGEST    OF    INCORPORATION    ACTS.  —  ILLINOIS. 

location  of  the  company;  (2)  amount  of  capital  stock  authorized  and  number 
of  shares  into  which  it  is  divided ;  (3)  amount  paid  up ;  (4)  market  value,  or, 
if  none,  actual  value  of  shares ;  (5)  total  amount  of  indebtedness,  except  for 
current  expenses;  (6)  assessed  valuation  of  all  tangible  property  (chap.  120, 
sec.  32  ;  Laws  of  1905,  p.  354).  Report  must  be  made  between  May  1st  and 
July  1st.    • 

It  shall  be  the  duty  of  the  Secretary  of  State  on  or  before  the  1st  day  of 
September  of  each  year  to  address  to  the  president,  secretary,  or  treasurer  of 
any  incorporated  company  doing  business  in  the  State  a  letter  of  inquiry  as  to 
whether  such  corporation  has  all  or  any  part  of  its  business  in  or  with  any 
trust,  combination,  or  association  of  persons  or  stockholders  of  the  character 
described  in  what  is  known  as  the  Anti-Trust  Act,  and  to  require  answer  under 
oath  of  such  officers,  the  form  of  affidavit  being  enclosed  in  such  letter  of  inquiry, 
in  the  form  prescribed  by  statute  (Laws  of  1907,  pp.  216-218). 

20.  Anti-Trust  Statute.  —  Illinois  has  an  elaborate  statute  forbidding 
pools,  trusts,  and  combinations  of  every  class  and  description  (Crim.  Code, 
sees.  269  a,  269  b,  615;  Act  of  June  11,  1891,  as  amended  by  Act  of  June  20, 
1893,  as  amended  by  Laws  of  1907,  pp.  216-218). 

D.  &  C.  F.  Co.  v.  People,  156  111.  448;  41  N.  E.  188;  Harding  v.  Company,  182  111.  551; 
55  N.  E.  577. 

21.  Statutory  Ground  for  Forfeiture  of  Charter.  —  The  charter  may  be 
forfeited  for  failure  to  organize  and  commence  business  witliin  two  years  from 
the  date  of  incorporation.  It  is  also  subject  to  forfeiture  for  entering  into  illegal 
trusts,  pools,  and  combinations  (sees.  4,  269  m).  The  charter  is  also  subject  to 
forfeiture  for  refusal  to  answer  inquiries  relative  to  whether  or  not  it  is  doing 
business  within  the  State  in  violation  of  the  Anti-Trust  Act  (Laws  of  1907, 
pp.  216-218) ;  also  for  failure  to  file  annual  report,  this  being  made  by  statute 
prima  facie  evidence  of  the  corporation  being  out  of  business  (sees.  193,  194,  etc.). 

N.  &  S.  R.  S.  Co.  v.  People,  147  111.  234;  35  N.  E.  608;  Independent  Medical  College  v. 
People,  182  111.  274;    55  N.  E.  345;    People  v.  Rose,  207  111.  352;    69  N.  E.  762. 

22.  Extension  of  Corporate  Existence.  —  Any  corporation  originally 
incorporated  for  a  period  less  than  ninety-nine  years  may  extend  the  term  of  its 
existence  beyond  the  time  specified  in  its  original  certificate  of  incorporation 
for  a  period  not  to  exceed  ninety-nine  years  from  the  date  of  original  incorpora- 
tion upon  compliance  with  the  statutes  in  such  case  made  and  provided  (see 
Laws  of  1911,  pp.  239,  240). 

People  ex  rel.  Stickney  v.  Marshall,  1  Gilm.  672. 

23.  Annual  License  Tax.  —  There  is  no  annual  license  tax. 

24.  Amendments. — To  change  the  corporate  name,  place  of  business, 
.enlarge  or  change  the  object  for  which  the  corporation  was  formed,  to  increase 

or  decrease  the  capital  stock,  to  change  the  number  of  shares  of  capital  stock, 
to  increase  or  decrease  the  par  value  of  shares  of  capital  stock,  to  increase  or 
decrease  the  number  of  directors,  or  to  consolidate  with  other  corporations, 
requires  the  calling  of  a  special  meeting  of  the  stockholders  by  the  board  of 
directors.  This  meeting  must  be  called  by  delivering  personally  or  depositing 
in  the  post-office,  at  least  thirty  days  before  the  date  of  such  meeting,  a  notice 
signed  by  a  majority  of  said  directors,  stating  the  time,  place,  and  object  thereof. 
A  similar  general  notice  must  also  be  published  for  three  successive  weeks  in 
some  newspaper  printed  in  or  nearest  the  county  in  which  the  principal  office 
of  the  corporation  is  located.    A  two-thirds  vote  of  all  the  stock  of  the  corpora- 

306 


DIGEST    OF    INCORPORATION    ACTS.  —  ILLINOIS. 

tion  is  necessary  for  the  adoption  of  the  proposed  amendment.  Thereafter  a 
certificate  must  be  prepared,  signed,  and  verified  by  the  affidavit  of  the  president 
under  the  corporate  seal.  This  must  be  filed  in  the  office  of  the  Secretary  of 
State  and  a  like  certificate  filed  for  record  in  the  office  of  the  recorder  of  deeds 
of  the  county  where  the  principal  business  office  of  the  corporation  is  located. 
There  must  also  be  published,  in  some  newspaper  published  in  the  county  above 
referred  to,  a  notice  of  such  change,  for  three  successive  weeks  (sees.  50-54  as 
amended  by  Laws  of  1903,  pp.  116,  117). 

Sykes  v.  People,  132  111.  32. 

25.  Dissolution.  —  Any  court  of  competent  jurisdiction  may  decree  dis- 
solution of  a  corporation  upon  petition  therefor.  Voluntary  dissolution  may 
be  effected  by  vote  of  two-tliirds  of  capital  stock  (sees.  49  a,  49  b,  149). 

26.  Foreign  Corporations.  —  All  foreign  corporations  doing  business 
within  the  State  must  make  application  to  the  Secretary  of  State,  signed  and 
sworn  to  by  the  president  and  secretary,  stating  what  business  such  corporation 
proposes  to  pursue  under  its  charter,  the  amount  of  capital  stock  of  such  cor|  io- 
ration,  whether  it  is  transacting  or  intends  to  transact  business  in  any  State  or 
country,  the  proportion  of  its  business  intended  to  be  carried  on  in  the  S1 

of  Illinois,  the  amount  paid  in  upon  its  capital  stock,  what  property  and  a- 
and  estimate  of  the  value  thereof  will  be  employed  in  the  business  of  such  cor- 
poration in  the  State  of  Illinois ;  if  any  of  its  capital  subscribed  has  not  been 
paid  in,  what  disposition  is  to  be  made  thereof ;  the  names  of  the  president, 
secretary,  and  directors  of  said  corporation  and  their  residences,  where  its  princi- 
pal office  in  Illinois  will  be  located,  and  the  name  and  address  of  some  attorney 
in  fact  upon  whom  process  may  be  served,  and,  if  required  by  the  Secretary  of 
State,  the  names  and  residences  of  all  of  the  stockholders  in  said  corporation. 
Such  corporation  shall  file  with  the  Secretary  of  State  a  copy  of  its  articles  of 
incorporation,  duly  certified  and  authenticated  by  the  officer  who  issued  the 
original,  or  by  the  recorder  or  registrar  of  the  office  in  which  said  original  articles 
may  have  been  recorded.  The  Secretary  of  State  is  also  given  power  to  pro- 
pound additional  interrogatories  if  he  sees  fit.  Upon  the  admission  of  such 
corporation  to  do  business  the  Secretary  of  State  shall  issue  a  certified  copy 
of  all  papers,  including  a  certified  copy  of  the  charter  of  such  corporation,  and 
shall  state  in  the  certificate  of  authority  to  do  business  issued  by  him  the  powers 
and  objects  of  such  corporation  which  may  be  exercised  in  this  State,  and  no 
corporation  shall,  by  the  certificate  of  the  Secretary  of  State,  be  authorized  to 
transact  any  business  in  this  State  for  the  transaction  of  which  the  corporation 
cannot  be  organized  under  the  laws  of  this  State.  No  foreign  corporation  shall 
exercise  powers  in  this  State  not  authorized  by  the  provisions  of  its  charter. 
Every  foreign  corporation  admitted  to  do  business  in  Illinois  shall  keep  on  file 
in  the  office  of  the  Secretary  of  State  an  affidavit  of  the  president  and  secretary 
showing  the  location  of  its  principal  business  office  in  the  State  of  Illinois,  the 
name  of  some  person  who  may  be  found  at  such  office  for  the  purpose  of  accept- 
ing service  upon  said  corporation  in  all  suits  that  may  be  commenced  againsl 
it,  and  as  often  as  such  corporation  shall  change  the  location  of  its  office  or  it- 
attorney  for  receiving  and  accepting  service  a  new  aiii<la\  it  shall  l>e  filed.  For- 
eign corporations  shall  be  required  to  make  such  reports  from  time  to  timi 
are  required  to  be  made  by  similar  domestic  corporations.  Only  such  real 
estate  may  be  held  as  may  be  necessary  for  the  proper  carrying  on  of  its  legit  i- 

307 


DIGEST    OF   INCORPORATION   ACTS.  —  ILLINOIS. 

mate  business  (Session  Laws  of  1905,  pp.  124-129,  as  amended  by  Laws  of 
1911,  pp.  240-241). 

Before  being  authorized  to  do  business  it  must  pay  into  the  office  of  the 
Secretary  of  State,  upon  the  proportion  of  its  stock  represented  by  its  property 
and  business  in  Illinois,  fees  equal  to  fees  required  of  similar  corporations  formed 
within  and  under  the  laws  of  this  State.  Foreign  corporations  failing  to  comply 
with  the  provisions  of  law  are  subject  to  a  penalty  of  not  less  than  $1,000  and 
not  exceeding  $10,000  (Session Laws  of  1905,  pages  124-129  inclusive).  Foreign 
corporations  must  file  within  thirty  days  after  September  1st  of  each  year  the 
same  anti-trust  affidavit  that  is  required  of  domestic  corporations  (Laws  of  1907, 
pp.  218-218).  They  must  also  keep  constantly  on  file  with  the  Secretary  of 
State  an  affidavit  of  the  president  and  secretary  showing  the  location  of  their 
principal  office  in  the  State,  and  the  name  of  a  person  in  said  office  upon  whom 
process  may  be  served  (Laws  of  1905,  pp.  124,  126).  They  are  also  made  gen- 
erally subject  to  the  same  provisions  as  domestic  corporations  as  to  reports. 
Under  Laws  of  1905,  p.  124,  they  must  keep  proper  books  at  their  principal 
office  or  place  of  business  within  the  State. 

Spry  Lumber  Co.  v.  Chappell,  184  111.  539;  56  N.  E.  794;  Richardson  v.  U.  S.  M.  &  T. 
Co.,  194  111.  259;  62  N.  E.  606;  Bradbury  v.  Company,  113  111.  App.  600. 


!08 


DIGEST    OF    INCORPORATION    ACTS.  —  INDIANA. 


INDIANA. 

(References  are  to  Bums'  Annotated  Indiana  Statutes,  Revision  of  190S,  unless  otherwise 
stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Acts  of  Indiana  are  two  in  number.  The  first  of  these 
is  known  as  the  Manufacturing  and  Mining  Act  (see  sees.  5062-5170).  The 
other  is  known  as  the  Voluntary  Association  Act.  (See  sees.  4286-4359,  as 
amended  by  Acts  of  1909,  chap.  113,  p.  290).  The  purposes  for  which  corpora- 
tions may  be  organized  under  the  Manufacturing  and  Mining  Act  arc  set  forth 
in  section  3,  post.  The  purposes  for  which  corporations  may  be  organized  under 
the  Voluntary  Association  Act  are  the  following: 

To  organize  companies  for  the  purpose  of  sinking  and  operating  oil  and 
gas  wells,  and  of  selling  the  products  of  such  wells;  to  establish  and  maintain 
companies  or  associations  for  the  purpose  of  importing  live  stock  into  the 
United  States  and  to  establish  and  maintain  companies  or  associations  for  the 
purpose  of  registering  and  maintaining  a  register  of  imported  registered  live 
stock  imported  into  the  United  States  and  for  the  improvement  of  such  imported 
five  stock.  To  organize  associations  for  the  purpose  of  buying  and  selling  mer- 
chandise and  conducting  mercantile  operations,  and  also  to  manufacture  such 
articles  of  merchandise  sold  and  handled  in  connection  therewith  or  for  the 
purpose  of  printing  and  publishing  newspapers,  books  and  other  matter  and 
commercial  and  job  printing  and  book  binding.  To  organize  forwarding  and 
commission  companies  and  to  own  and  operate  wharf  boats  in  connection 
therewith  upon  any  of  the  rivers  within  or  bordering  upon  the  State  of  Indiana. 
To  organize  companies  for  the  purpose  of  carrying  on  the  business  of  insuring 
title  to  real  estate  and  to  make  abstracts,  loans,  and  collections  in  connection 
therewith,  in  the  manner  to  be  fully  stated  in  such  articles,  or  for  the  purpose 
of  making  abstracts,  loans,  and  collections.  To  organize  companies  for  pur- 
pose of  buying  and  selling  State,  county,  municipal,  and  all  other  bonds;  of 
borrowing  and  loaning  money;  of  buying  and  selling  promissory  notes,  bills  of 
exchange,  accounts,  choses  in  action,  fees,  and  all  other  evidences  of  indebted- 
ness, and  of  buying,  holding,  owning,  mortgaging,  leasing,  and  selling  real 
estate  and  personal  property,  all  in  the  manner  and  on  a  plan  to  be  fully  stated 
in  such  articles.  Such  association  shall  not  be  authorized  to  do  a  general  bank- 
ing or  trust  business;  to  organize  storage  and  cold  storage  companies;  to  or- 
ganize and  maintain  companies  to  carry  on  an  omnibus  and  transfer  business, 
and  the  business  of  carting  and  draying,  and  the  Letting  of  vehicles  and  hoi 
for  hire.  To  acquire  by  purchase,  lease  or  otherwise  hold,  own,  maintain,  or- 
nament, and  improve  places,  parks,  and  ways  for  shows  and  exhibits  and  speed 
and  other  tests  of  motor  cars,  balloons,  or  airships;  to  hold,  and  conduct  or  to 
license  or  permit  others  to  hold  and  conduct  therein  or  t  hereon  such  shi 
exhibits,  tests;  to  secure  the  co-operation  and  participation  in  such  showB  or 
exhibits  and  speed  or  other  tests  of  motor  car-,  balloons,  and  airships  of  manu- 
facturers and  owners  of  and  dealers  in  all  or  any  thereof,  and  of  per, mis  skilled 
in  the  arts  and  sciences  applicable  thereto;  to  promote  the  development,  use, 

and    sale  of  all  or  any  thereof,  and  to  transacl    all   business  incidental   to  all  or 
any  of  said  purposes  (sees.  4304-4316,  Acts  of  1909,  chap.  1  13,  p.  '-"»ii). 

309 


DIGEST    OF    INCORPORATION    ACTS.  —  INDIANA. 

To  acquire  by  purchase,  lease,  or  otherwise,  hold,  own,  maintain,  and  operate 
opera  houses,  theaters,  grounds,  and  other  places  for  the  presentation  of  theat- 
rical plays,  operas,  concerts,  or  other  forms  of  amusements  or  entertainments, 
and  to  produce  and  present,  and  to  license  or  permit  others  to  produce  and 
present  therein  or  thereon  theatrical  plays,  operas,  concerts,  and  other  forms 
of  amusement  or  entertainment  (Laws  of  1909,  chap.  113,  p.  291). 

To  design,  to  register  and  perfect  trade  marks,  and  to  do  all  things  needful 
or  connected  therewith  (Laws  of  1909,  chap.  113,  p.  291). 

To  govern,  manage,  control,  and  improve  parks,  boulevards,  and  pleasure 
drives,  and  to  lay  out  the  same  and  to  take  and  hold  by  gift  for  such  purpose 
of  personal  property;  and  to  take  and  hold  by  purchase,  gift,  grant,  dedication, 
or  devise,  real  property  for  said  purposes,  located  within  four  miles  of  any  city 
of  the  first,  second,  or  third  class,  where  such  company  may  have  its  home 
office,  but  shall  take  and  hold  said  property  and  exercise  said  powers  in  trust 
for  the  city  in  connection  with  which  said  parks,  boulevards,  or  pleasure  drives 
shall  be  laid  out  and  maintained ;  provided  that  when  any  company  is  organized 
to  exercise  the  powers  and  for  the  purposes  named  in  this  subdivision,  it  shall 
be  without  capital  stock  and  not  for  pecuniary  gain,  provided  nothing  herein 
shall  authorize  the  production  or  presentation  of  any  amusement  or  other  en- 
tertainment now  or  hereafter  prohibited  by  law. 

The  objects  or  purposes  of  any  such  association  may  include  any  or  all  of 
the  purposes  stated  in  any  one  of  the  above  subdivisions  of  this  section  (Laws 
of  1909,  chap.  113,  p.  291;  see  also  Laws  of  1911,  chap.  259). 

2.  Incorporators.  —  Any  number  of  persons  not  less  than  three  may  be 
incorporators.    There  are  no  residential  requirements  (sees.  4286,  5062). 

3.  Contents  of  the  Articles  of  Association.  —  The  articles  of  associa- 
tion of  all  corporations  organized  under  the  Voluntary  Association  Act  (sec. 
4286)  must  set  forth : 

a.  Name.  —  The  corporate  name  of  the  proposed  corporation.  Similarity 
of  names  is  forbidden  as  to  domestic  corporations. 

b.  Capital  Stock.  —  The  articles  must  set  forth  the  amount  of  capital  stock 
and  the  number  of  shares  into  which  the  same  shall  be  divided,  with  the  par 
value  of  the  same.  The  capital  stock  may  be  any  amount  (except  gas  and  oil 
companies  where  the  capital  stock  is  limited  to  $2,000,000),  and  the  par  value 
of  the  shares  may  be  any  amount  not  exceeding  $100.  (See  Laws  of  1903,  chap. 
128.)  If  preferred  stock  is  to  be  issued,  provision  therefor  may  be  made  in  the 
articles,  provided  that  the  par  value  of  the  same  is  fixed  at  $100,  and  that  the 
aggregate  amount  thereof  shall  at  no  time  exceed  double  the  amount  of  the  com- 
mon stock  of  the  corporation  actually  subscribed  or  issued.  The  certificate  must 
state  the  amount  of  preferred  stock  proposed  to  be  issued,  and  the  number  of 
shares  into  which  it  is  to  be  divided  (sees.  5093-5099). 

c.  Purposes.  —  The  object  of  the  corporation,  with  the  proposed  plan  of 
doing  business,  must  be  fully  set  forth.  The  purposes  may  include  all  or  any 
of  the  purposes  included  in  any  one  of  the  twenty-three  classes,  which  may  be 
described  in  general  terms  as  follows :  Horticultural,  literary,  drainage,  educa- 
tional, eleemosynary,  cemetery,  fraternal,  military,  fire,  shade  trees,  safe  deposit 
and  loan  companies,  hotels,  real  estate  and  rental  companies,  mining,  health  re- 
sorts, oil  and  gas  wells,  live-stock,  trading  corporations,  commission  merchants, 
title  insurance,  abstract  and  loan,  women's  exchange,  bond  and  money,  brokerage, 
.medical  and  scientific  research,  storage,  transfer,  and  scientific  purposes  (sees. 
4304,  4316;  Laws  of  1909,  chap.  113,  p.  290;  see  also  Laws  of  1911,  chap.  259). 

310 


DIGEST    OF    INCORPORATION    ACTS.  —  INDIANA. 

d.  Incorporators.  —  Names  and  places  of  residence  of  the  incorporators 
must  be  set  forth. 

e.  Domiciliary  Office.  — The  principal  place  of  business  must  be  set  forth, 
which  by  implication  would  seem  to  refer  to  the  principal  place  of  business 
within  the  State. 

/.    Duration.  — The  term  of  existence  must  not  exceed  fifty  years. 

g.    Corporate  Seal.  — A  demonstration  of  the  corporate  seal  must  be  attached. 

h.  Board  of  Directors.  —  The  manner  of  election  or  appointment  of  directors 
and  officers  who  are  to  manage  the  business  must  be  set  forth. 

i.  Number  and  Names  of  Directors.  —  The  number  of  directors,  together 
with  the  names  of  those  who  shall  manage  the  affairs  for  the  first  year,  must 
appear.  If  desired,  the  date  of  the  annual  meeting  may  be  set  forth  in  the 
articles  (sec.  4286;  Laws  of  1903,  chaps.  37,  73,  128). 

Under  section  5062,  whenever  three  or  more  persons  desire  to  form  a  com- 
pany under  what  is  known  as  the  Manufacturing  and  Mining  Act,  they  may 
do  so  for  the  purpose  of  carrying  on  any  one  of  the  following  named  purposes, 
to  wit:  (a)  Any  kind  of  manufacturing  business,  or  to  buy  and  sell  merchan- 
dise of  a  kind  or  kinds  similar  or  incident  to  merchandise  to  be  manufactured 
by  the  incorporating  company  and  for  the  selling  of  such  merchandise  when 
manufactured,  (b)  Any  kind  of  mining  business,  (c)  Any  kind  of  mechanical 
business  or  chemical  business,  (d)  To  furnish  motive  power,  (e)  To  supply 
any  cities,  towns,  villages,  communities,  places  of  amusement  or  exhibition, 
or  any  two  or  more  or  either  of  the  same,  with  water,  light,  heat,  or  power. 
(/)  To  own,  construct,  operate,  and  maintain  stockyards,  transfer  companies 
and  conduct  and  transact  business  incident  thereto,  (g)  To  own,  construct, 
maintain,  and  operate  grain  elevators  or  flour  mills,  or  both,  and  transact  busi- 
ness incident  thereto,  including  the  manufacture  of  flour,  meal,  and  all  grains 
and  cereal  products,  and  the  buying  and  selling  of  grain  and  cereals  of  all  kinds 
and  the  manufactured  products  thereof,  (h)  To  construct  railroads,  highways, 
streets,  buildings,  or  other  structures,  and  to  carry  on  a  general  construction 
business,  (i)  To  buy,  sell,  and  lease  lands  and  buildings  and  other  structures 
thereon,  and  to  erect  dwellings  and  other  buildings  and  structures  on  lands 
leased  or  purchased.      (See  sec.  1,  ante.) 

Parties  incorporating  under  the  above  act  must  make  and  acknowledge  be- 
fore some  officer  capable  of  taking  acknowledgments,  a  certificate  in  writing 
which  shall  set  forth:  (1)  The  corporate  name  adopted  by  the  company,  which 
name  shall  not  be  the  same  or  strikingly  similar  to  that  of  an  existing  corpora- 
tion. (2)  The  object  or  objects  of  its  promotion,  which  shall  include  any  or 
all  of  the  purposes  stated  in  any  one  of  the  subdivisions  of  purposes  enumerated 
in  the  act.  (3)  The  amount  of  capital  stock,  the  number  of  shares  into  which 
it  is  divided,  and  the  par  value  of  each  share.  If  preferred  stock  is  to  be  issued, 
provision  therefor  may  be  made  in  the  articles,  provided  that  the  par  value  of 
the  same  is  fixed  at  $100  and  that  the  aggregate  amount  thereof  shall  at  no 
time  exceed  double  the  amount  of  the  common  stock  of  the  corporation  actually 
subscribed  or  issued.  The  certificate  must  state  the  amount  of  preferred  stock 
proposed  to  be  issued  and  the  number  of  shares  into  which  it  is  to  be  divided 
(sees.  5093-5090).  (4)  The  term  of  existence  not  to  exceed  fifty  years.  (5)  The 
number  of  directors  and  the  names  of  those  who  shall  manage  the  affairs  of 
the  corporation  for  the  first  year.  (6)  The  name  of  the  city  or  town  in  which 
its  principal  place  of  lm  i n<-  .-.  is  to  be  located.  If  desired,  the  incorporators  may 
fix  in  the  certificate  the  date  for  holding  the  annual  meeting  of  the  stockholder 

311 


DIGEST    OF    INCORPORATION    ACTS. — INDIANA. 

for  the  election  of  directors  of  the  company.  Such  date  may  be  fixed  at  any 
time  within  one  year  from  the  date  of  fifing  the  certificate,  and  when  so  fixed 
and  stated,  the  directors  therein  named  and  the  successors  of  such  directors  as 
have  resigned,  shall  serve  only  for  the  period  of  time  intervening  between  the 
date  of  their  appointment  and  the  time  of  such  annual  meeting  so  fixed  in 
the  certificate  of  incorporation.  If  the  time  of  holding  the  annual  meeting  is 
not  fixed  in  the  certificate  of  incorporation,  the  annual  meeting  shall  be  held 
one  year  from  the  date  of  fifing  the  same  (sec.  5062). 

Bank  v.  Mead,  159  Ind.  252;  64  N.  E.  880. 

4.  Statutory  Powers. — The  statute  fully  enumerates  the  implied  com- 
mon law  powers  of  corporations  (sees.  4046,  4069-4170,  4319,  5069,  5138-5143). 
Manufacturing  and  mining  companies  are  permitted  to  consolidate  (sees.  5109- 
5112).  Among  the  special  powers  conferred  by  statute  are  the  following:  To 
issue  preferred  stock,  to  permit  voting  by  proxy  at  stockholders'  meetings,  to 
forfeit  stock  for  non-payment  of  assessments,  to  borrow  on  mortgage  (sees. 
5093-5099,  5071,  4046,  5089-5090,  4069-4070). 

Most  business  corporations  are  expressly  forbidden  to  become  stockholders 
in  other  corporations,  except  that  railroads  may  own  stock  in  telegraph,  tele- 
phone, union  railway,  and  bridge  companies  under  certain  circumstances; 
manufacturing  companies  may  also  hold  stock  in  other  corporations  upon  the 
written  consent  of  all  parties  interested  (sec.  5122). 

5.  Procuring  the  Charter.  —  In  the  case  of  companies  incorporated 
under  the  Voluntary  Association  Act  (sec.  4286)  the  articles  of  association 
must  be  signed  and  acknowledged  by  each  incorporator.  They  must  first  be 
presented  to  the  Secretary  of  State  for  filing,  and  at  the  time  of  presenting 
such  articles  they  must  also  present  therewith  a  full  written  or  printed  state- 
ment of  the  proposed  plan  of  doing  business;  but  if,  upon  examination,  the 
Secretary  of  State  shall  find  the  articles  to  be  according  to  law,  and  the  pro- 
posed plan  of  doing  business  not  inconsistent  with  law,  he  shall,  upon  the 
payment  of  the  fees  prescribed  by  law,  issue  a  certificate  of  incorporation. 
Thereafter  the  corporation  must  file  and  record  a  duplicate  of  these  articles 
in  the  recorder's  office  of  the  county  in  which  the  principal  place  of  business 
of  such  corporation  is  located.  The  law  provides  that  such  record  or  a  certi- 
fied copy  thereof  shall  be  conclusive  evidence  of  the  matters  and  tilings  therein 
stated  (sec.  4318).  In  the  case  of  companies  incorporated  under  the  Manufac- 
turing and  Mining  Company  Act  (sees.  5062,  5064;  see  also  sec.  4044)  the 
articles  must  be  signed  and  acknowledged  in  duplicate,  the  first  of  which  shall 
be  filed  in  the  office  of  the  Secretary  of  State,  and  the  other,  having  been  ap- 
proved by  the  latter  official,  must  be  filed  with  the  county  recorder  of  the  county 
in  which  the  company's  principal  place  of  business  is  to  be  located. 

6.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon  the 
amount  of  corporate  indebtedness.  (As  to  borrowing  on  mortgage,  see  sees. 
4069-4070.) 

7.  Organization  Tax.  —  Where  the  capital  stock  is  $10,000  or  under, 
$10;  where  the  authorized  capital  stock  is  over  $10,000,  the  tax  is  one-tehth 
of  one  per  cent  thereon  (Laws  of  1911,  chap.  271). 

8.  Filing  and  Recording  Fees.  —  For  filing  and  recording  articles  of  as- 
sociation not  exceeding  two  hundred  words,  $1,  and  10  cents  per  hundred 
words  for  all  in  excess  thereof  (sec.  7206).  For  issuing  certificate  of  incorpora- 
tion, 50  cents;  for  certified  copy  of  articles  of  association,  50  cents  for  certifi- 

312 


DIGEST    OF    INCORPORATION    ACTS.  —  INDIANA. 

cate  and  10  cents  for  one  hundred  words  per  copy;  for  filing  certificate  of  reduc- 
tion of  capital  stock,  $5;  for  filing  copy  of  decree  of  court  changing  corporate 
name,  85;  for  filing  certificate  of  extension  of  purposes  or  change  of  domicile, 
$5;  for  fifing  other  amendments,  20  cents  per  hundred  words,  to  be  in  no  case 
less  than  $5.  The  foregoing  fees  are  payable  to  the  Secretary  of  State.  Any 
corporation  fifing  with  the  Secretary  of  State  any  certified  copy  of  minutes  shall 
pay  to  him  $25,  $15  of  which  shall  be  for  the  use  of  the  State.  The  Secretary  of 
State  shall  forthwith  make  a  certified  copy  of  such  minutes  and  all  endorse- 
ments thereon  and  a  statement  of  the  time  of  filing  and  taking  effect  thereof, 
and  send  the  same  to  the  county  recorder  of  the  county  wherein  the  corpora- 
tion has  its  principal  place  of  business.  With  this  must  be  sent  $10  of  the  orig- 
inal $25  paid  by  the  corporation,  which  sum  shall  be  the  fee  of  the  county  re- 
corder for  filing  and  recording  such  copies  (sec.  9215).  The  county  recorder  is 
authorized  to  collect  10  cents  per  hundred  words  for  recording  articles  of  asso- 
ciation (sees.  7206,  9215). 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  the  Secretary  of  State  issues  a  certificate  of  incorporation  and  a  dupli- 
cate of  the  articles  of  association  are  recorded  in  the  recorder's  office  of  the 
county  wherein  the  principal  place  of  business  of  the  corporation  is  located 
(sees.  4319,  5064).  Companies  incorporated  under  the  Manufacturing  Act 
must  pay  up  their  capital  stock  within  eighteen  months  after  incorporation 
(sec.  5089).  Within  thirty  days  after  the  last  payment  is  made,  the  president 
and  a  majority  of  the  directors  must  make  a  sworn  statement  setting  forth 
this  fact;  thereupon  the  certificate  must  be  recorded  in  the  office  of  the  clerk 
of  the  Circuit  Court  of  the  county  wherein  the  corporation's  principal  place  of 
business  is  located  (sec.  5091). 

10.  Organization  Meetings.  —  In  the  absence  of  any  statute  providing 
otherwise,  organization  meetings  must  be  held  within  the  State.  The  incor- 
porators should  sign  a  written  agreement  fixing  the  time  and  place  for  holding 
the  organization  meeting.  In  case  no  agreement  can  be  had  the  organization 
meeting  may  be  called  by  a  notice  signed  by  three  or  more  members  setting 
forth  the  time,  place,  and  purpose  of  the  meeting,  and  must  ten  days  before 
the  meeting  be  delivered  to  each  member,  or  published  in  some  newspaper  of 
the  county  where  the  corporation  may  be  established  (sec.  40 IS).  After  a 
temporary  secretary  and  chairman  have  been  chosen,  the  corporation  should 
proceed  to  the  adoption  of  by-laws.  Stockholders  may  vote  by  proxy.  Im- 
mediately after  the  adjournment  of  the  incorporators'  meeting  the  hoard  of 
directors  named  in  the  articles  of  incorporation  should  meet  and  organize  by 
the  election  of  the  officers  prescribed  in  the  by-laws.  The  statutory  officers 
are  a  president,  secretary,  and  treasurer.  The  secretary  and  treasurer  are  re- 
quired to  give  bonds  with  such  securities  as  shall  be  required  by  the  by-laws, 
and  must  be  sworn  to  the  faithful  discharge  of  the  duties  which  may  be  assigned 
to  either  of  them.  The  same  person  may  be  elected  to  the  office  of  secretary 
and  treasurer.  The  law  provides  that  when  the  steps  necessary  to  organization 
have  been  completed,  a  statement  thereof  must  be  filed  in  the  office  of  the  clerk 
of  the  Circuit  Court  of  the  proper  county;    that  said  court  al   its  next   term 

thereafter  shall,  on  proof  of  such  organization,  cause  to  1 utered  an  order 

declaring  the  existence  of  such  corporation.  The  law  provides  that  such  order 
shall  be  conclusive  as  to  the  fact  of  such  existence  from  the  date  which  said 
court  may  fix  in  the  order  (-<■<■*.   101  I.  ">071  ), 

11.   Meetings  of  Stockholders  and  Directors.  —  Stockholders'   meet- 

318 


DIGEST    OF    INCORPORATION    ACTS.  —  INDIANA. 

ings  must  be  held  within  the  State.  It  seems  to  be  contemplated  by  the  statute 
that  directors'  meetings  should  be  held  at  the  principal  office  within  the  State 
(sees.  4074,  4075,  5070,  5071). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  not  less  than  three  nor  more  than  thirteen  directors  (sec. 
3448) ;  cannot  exceed  eleven  in  case  of  manufacturing,  mining,  mechanical, 
and  chemical  companies  (sec.  5054).  In  the  last-named  class  of  companies, 
directors  must  be  stockholders  and  residents  of  the  United  States.  In  other 
corporations  there  are  no  such  requirements  (sees.  4073-4075,  5071). 

Renn  v.  Company  (Ind.),  73  N.  E.  269. 

b.  Liabilities.  —  If  any  corporation  reducing  its  capital  stock  shall  fail  to 
file  a  certified  copy  of  the  vote  of  the  stockholders  thereon  within  thirty  days 
thereafter  in  the  office  of  the  clerk  of  the  Circuit  Court  in  which  the  corpora- 
tion's original  certificate  was  filed,  and  also  a  duplicate  of  the  same  in  the  office 
of  the  Secretary  of  State,  the  directors  shall  be  jointly  and  severally  liable  for 
debts  contracted  after  the  said  thirty  days  or  before  the  record  of  such  vote. 
Directors  are  also  jointly  and  severally  liable  for  all  damages  resulting  in  case 
any  certificate,  report,  or  public  notice  given  as  required  by  law  shall  be  false 
in  any  material  respect,  or  if  they  shall  fail  to  give  such  notice  or  make  such 
report,  and  any  person  shall  be  misled  or  deceived  thereby.  The  directors  are 
also  jointly  and  severally  liable  for  all  debts  contracted  after  the  declaration 
and  payment  of  a  dividend  knowing  the  company  to  be  insolvent,  or  knowing 
that  such  dividend  would  render  it  so,  or  if  they  violate  any  of  the  provisions 
of  the  act  which  shall  thereby  render  the  corporation  insolvent  (sees.  5092, 
5101,  5103,  5104). 

Brown  v.  Clow,  158  Ind.  403;  62  N.  E.  1006;  A.  C.  I.  Co.,  156  Ind.  212;  59  N.  E.  679; 
Renn  v.  U.  S.  Cem.  Co.  (Ind.),  73  N.  E.  269. 

13.  Stockholders'  Liabilities. — The  Constitution  of  Indiana  (sec.  213) 
provides  that  every  corporation  other  than  banking  shall  be  secured  by  such 
individual  liability  of  the  stockholders  or  other  means  as  may  be  prescribed 
by  law.  In  the  case  of  corporations  organized  under  the  Voluntary  Association 
Act,  there  is  no  stockholders'  liability  other  than  that  arising  from  the  non- 
payment of  subscriptions  to  the  capital  stock  (sees.  4051,  4078).  However, 
if  any  part  of  the  capital  stock  shall  be  withdrawn  or  refunded  to  the  stock- 
holders before  payment  of  the  debts  of  the  corporation,  stockholders  are  then 
individually  and  severally  liable  for  the  payment  of  such  debts  (sec.  4051).  In 
the  case  of  corporations  organized  under  the  Manufacturing  Act,  stockholders 
therein  are  individually  liable  for  all  debts  due  to  laborers,  servants,  appren- 
tices, and  employees  for  services  rendered  such  corporations  (sec.  5105). 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him,  under  the  seal  of  the  corporation,  signed  by  the  treas- 
urer. Stock  in  manufacturing  companies  cannot  be  transferred  until  it  is 
paid  up. 

15.  Preferred  Stock.  —  Corporations  organized  under  the  Manufacturing 
Act  are  expressly  authorized  to  issue  preferred  stock  by  providing  therefor  in 
the  articles  of  association  (sees.  5094,  5095).  Preferred  stock  may  be  issued 
after  incorporation  to  an  aggregate  amount,  which  must  not  at  any  time  ex- 
ceed double  the  amount  of  the  common  stock  of  the  company  in  shares  of  not 
more  than  $100  each.  If  such  company  desires  to  create  and  issue  shares  of 
preferred  stock  after  incorporation,  it  may  do  so  at  any  regular  annual  or  special 

314 


DIGEST    OF    INCORPORATION    ACTS.  —  INDIANA. 

meeting  of  its  stockholders,  by  the  vote  of  the  holders  of  three-fourtlxs  of  its 
common  stock,  and  such  company  may  at  any  such  meeting  or  any  subse- 
quent meeting  of  its  stockholders,  by  a  vote  of  the  holders  of  :i  majority  of  its 
common  stock,  authorize  and  empower  its  board  of  directors  to  dispose  <>t  and 
issue  such  preferred  stock  upon  such  terms  and  conditions  as  said  board  of 
directors  may  deem  best,  or  as  such  company  may  prescribe;  and  when  50 
authorized  the  validity  of  the  issuance  and  the  disposition  made  of  such  pre- 
ferred stock  by  said  directors  shall  in  all  tilings  be  binding  and  conclusive  upon 
such  company.  Within  thirty  days  after  the  time  such  company  lias  am  borized 
the  issuance  of  preferred  stock  as  provided  in  this  section,  it  shall  cause  to  be 
filed  with  the  Secretary  of  State  its  certificate  in  writing,  signed  by  its  presi- 
dent and  attested  by  its  secretary,  duly  acknowledged,  certifying  that  the 
issuance  of  preferred  stock  has  been  authorized  by  such  company,  the  amount 
of  such  preferred  stock,  the  number  of  shares  into  which  it  shall  be  divided, 
and  the  amount  of  each  share  (sec.  5095). 

Such  preferred  stock  may  be  in  any  amount,  and  it  shall  be  subject  to 
redemption  at  par  at  such  times  and  upon  such  terms  and  conditions  as  shall 
be  expressed  in  the  certificates  thereof,  and  the  holders  of  such  preferred  stock 
shall  be  entitled  to  receive,  and  the  said  company  shall  be  bound  to  pay  thereon, 
such  quarterly,  semi-annual,  or  annual  dividend  as  may  be  expressed  in  the 
certificates,  not  exceeding  in  all  eight  per  cent,  before  any  dividend  shall  be 
set  aside  or  paid  on  the  common  stock  of  such  company  ;  and  in  no  event  shall 
the  holders  of  such  preferred  stock  be  individually  or  personally  liable  for  the 
debts  or  other  liabilities  of  such  company,  but  in  case  of  insolvency  or  upon  the 
dissolution  of  such  company  such  debts  or  other  liabilities  shall  be  paid  in 
preference  to  such  preferred  stock.  Such  preferred  stock,  however,  shall  at  all 
times  have  a  priority  in  payment  out  of  the  assets  of  such  corporation  over 
the  common  stock  thereof  for  the  full  face  value,  together  with  all  arrearages 
of  interest  or  dividends  due  thereon  (sec.  5096). 

Such  preferred  stock  shall  not  be  voted  at  any  meeting  of  such  company, 
nor  shall  the  owners  or  holders  thereof,  as  such,  have  any  voice  in  the  manage- 
ment of  the  affairs  of  such  company,  unless  the  right  to  vote  such  preferred 
stock  be  conferred  upon  the  owners  thereof,  either  in  the  articles  of  incorpora- 
tion, or  by  the  unanimous  action  of  all  of  the  owners  of  the  common  stock  of  such 
company.  When  the  right  to  vote  has  been  conferred  in  either  of  these  ways, 
each  and  every  owner  of  such  preferred  stock  shall  have  the  right  to  vote  such 
stock  at  any  meeting  of  such  company  in  like  manner  and  with  the  same  effect 
as  the  common  stock  of  such  company  is  voted,  but  such  company  shall  not  have 
authority  to  convey  its  real  estate  or  mortgage  any  of  its  property  without  the 
written  consent  of  the  holders  of  a  majority  of  the  shares  of  such  preferred  stock, 
nor  shall  such  company  without  such  consent  declare  any  dividend  upon  its 
common  stock  that  will  impair  its  capital  (as  amended  by  Laws  of  191 1,  chap. 
205,  p.  493). 

When  any  such  company  has  redeemed  the  preferred  stock  issued  by  it 
under  the  provisions  of  this  act,  its  directors  shall  within  thirty  days  there- 
after cause  to  be  filed  with  the  Secretary  of  State  their  certificate  in  writing 
as  directors  of  such  corporation,  duly  acknowledged,  certifying  that  such  pic 
ferred  stock  has  been  redeemed;  and  in  default  thereof  the  directors  of  such 
company  shall  be  jointly  and  severally  liable  for  all  debts  contracted  after 
said  thirty  days  and  before  said  certificate  i  filed  (sec.  5098;  see  al  <> 
5093,  5099). 

315 


DIGEST    OF   INCORPORATION    ACTS.  —  INDIANA. 

t 

16.  Payment  of  Capital  Stock.  —  The  statute  does  not  provide  as  to 
how  the  capital  stock  shall  be  paid  in.  In  the  absence  of  statutory  prohibition, 
it  may  be  paid  in  in  money  or  money's  worth  (sees.  4321,  5060,  5062,  5089,  5091). 

17.  Books.  — Corporations  are  required  to  keep  at  their  office  or  place  of 
business  within  the  State  a  stock  book  open  to  inspection  during  business  hours 
to  all  stockholders  and  creditors,  who  may  take  extracts  therefrom  if  they 
desire  (sees.  4054,  4055). 

18.  Office.  —  Every  corporation  must  have  an  office  within  the  State  (sees. 
4054,  4073). 

19.  Reports.  —  Every  domestic  business  corporation  must  also  file  in  the 
office  of  the  Secretary  of  State  within  sixty  days  from  the  first  day  of  June  of 
each  year,  a  report,  signed  and  sworn  to  by  the  president  or  secretary  or  by  two 
of  the  directors  of  the  corporation,  which  report  shall  state:  (1)  The  name  of 
the  corporation,  and  if  at  any  time  the  name  shall  have  been  changed  in  any 
respect,  and  the  report  of  such  change  has  not  already  been  filed  in  the  office  of 
the  Secretary  of  State,  the  old  name  or  names,  and  the  manner  and  date  of  such 
change  or  changes.  (2)  The  location,  town,  city,  the  street  number,  if  number 
there  be,  of  its  principal  office  in  this  State,  and  if  the  location  shall  have  been 
at  any  time  changed  from  one  city  or  town  to  another  city  or  town  and  the 
report  of  such  change  has  not  already  been  filed  in  the  office  of  the  Secretary 
of  State,  the  point  or  points  from  which  such  change  or  changes  have  been  made 
and  the  date  thereof.  (3)  The  amount  of  authorized  capital  stock  of  the  cor- 
poration and  the  amount  thereof  actually  issued  and  outstanding.  (4)  The 
amount  of  its  increases  of  capital  stock,  both  common  and  preferred,  with  the 
dates  of  such  increases,  as  well  as  a  statement  showing  redemptions  of  preferred 
stock  if  any.  (5)  The  amount  of  reductions  of  capital  stock,  if  any,  and  when 
and  how  made.  (6)  The  original  term  of  existence,  and  if  extended  at  any  time, 
for  what  period.  (7)  Whether  the  original  articles  have  been  amended  in  any 
manner,  the  date  of  such  amendment  or  amendments,  and  in  what  respect  they 
have  been  amended.  (8)  The  names  and  post-office  addresses  of  all  present 
officers  and  directors  and  the  date  of  expirations  of  their  respective  terms. 
(9)  The  date  of  the  next  annual  meeting  of  the  stockholders  (sec.  4080). 

Within  thirty  days  of  the  date  of  filing  such  report  an  original  or  certified 
copy  of  any  resolution  at  any  time  theretofore  adopted  by  such  corporation  for 
increasing  capital  stock,  for  issuance  of  preferred  stock,  for  reduction  of  capital 
stock,  for  redemption  of  preferred  stock,  for  change  of  election,  for  extension  of 
term  of  existence,  for  amending  the  articles  of  incorporation,  or  decree  or  resolu- 
tion for  change  of  name  not  already  filed  in  the  office  of  the  Secretary  of  State, 
must  be  filed  with  the  said  official.  Refusal  to  comply  with  the  above  renders 
the  corporation  subject  to  fine,  and  the  directors  who  wilfully  neglect  to  comply 
with  the  provisions  of  the  act  ineligible  for  re-election  to  their  office  at  the  next 
election  and  for  a  period  of  one  year  thereafter.  The  fee  for  filing  such  report 
is  fixed  by  statute  at  50  cents  (sees.  4080-4084) .  (As  to  fee  for  filing  certified 
copy  of  resolution,  see  ante,  sec.  8). 

20.  Anti-Trust  Statute.  —  There  is  a  statutory  prohibition  directed 
against  trusts  and  combinations  tending  to  lessen  free  competition  in  the  im- 
portation, sale,  or  manufacture  of  various  articles  (sees.  3862  -3S92). 

21.  Statutory  Grounds  for  Forfeiture  of  Charters.  —  Charters  may  be 
forfeited  either  for  violation  of  the  anti-trust  act,  or  for  allowing  a  judgment 
to  stand  against  the  corporation  for  a  period  of  one  year  without  satisfying 
the  same  (sees.  3879,  3990,  4050,  4066,  4067,  3429,  3439,  3440). 

316 


DIGEST    OF    INCORPORATION"    ACTS.  —  INDIANA. 

22.  Extension  of  Corporate  Existence.  —  Corporations  may  extend 
their  corporate  existence  by  complying  with  the  provisions  set  forth  in  Bee.  J  1 
herein  relative  to  amendments  to  certificates  of  incorporation  (sec.  5084  I.  The 
act  permitting  such  extension  of  corporate  existence  expressly  provides  thai 
no  second  extension  of  corporate  existence  may  be  granted  (Acts  of  1907, 
chap.  192). 

23.  Annual  License  Tax.  —  There  is  no  annual  license  tax. 

24.  Amendments.  —  To  change  the  corporate  name  requires  the  filing  of 
a  petition  in  the  Circuit  Court  of  the  county  in  which  the  corporation  has  its 
principal  place  of  business.  The  petition  being  filed,  the  corporation  shall  give 
notice  thereof  by  three  weekly  publications  in  some  newspaper  of  general  cir- 
culation printed  in  the  county  wherein  its  principal  place  of  business  is  locate.  1 
thirty  days  prior  to  the  first  day  of  the  term  on  which  such  petition  shall  be 
heard.  Proof  of  such  publication  must  be  made  and  filed  and  a  copy  of  such 
publication  notice  verified  by  the  affidavit  of  a  disinterested  person,  and  a  copy 
of  the  decree  of  the  court,  changing  the  name  of  the  corporation,  certified  under 
the  seal  of  the  said  court  by  the  clerk  thereof,  shall  within  ten  days  thereafter 
be  filed  with  the  Secretary  of  State  (sees.  1035-1039,  4079). 

Any  domestic  business  corporation  may  reduce  or  increase  its  common 
capital  stock  or  define  or  limit  or  enlarge  its  corporate  objects  to  the  extent  and 
subject  to  the  conditions  and  limitations  hereinafter  expressed  by  complying 
with  the  following  provisions.  Any  such  corporation  may  increase  the  amount 
of  its  authorized  common  capital  stock  in  the  following  manner  :  At  any  regidar 
annual  meeting  of  its  stockholders,  or  at  any  meeting  of  them  called  for  that 
purpose,  the  call  for  which,  mailed  to  each  known  stockholder  not  less  than 
thirty  days  before  the  date  of  the  meeting,  states  that  the  increase  of  the  author- 
ized capital  will  be  considered  and  acted  upon  if  four-fifths  of  all  of  the  shares 
then  outstanding  and  entitled  to  vote  at  said  stockholders'  meeting  shall  ap- 
prove the  resolution  for  such  increase,  and  thereafter  at  a  regular  or  duly  called 
meeting  of  the  directors  of  the  corporation,  a  majority  of  the  members  of  the 
full  board  of  directors  shall  by  resolution  ratify  the  action  of  the  stockholders  in 
that  behalf,  and  a  copy  of  the  minutes  of  the  said  two  meetings,  verified  by  the 
president  and  secretary  or  by  such  other  officers  as  the  corporation  may  in  said 
resolution  designate  to  make  the  certificates,  and  authenticated  by  the  cor- 
porate seal  of  the  corporation  (if  the  corporation  have  a  seal),  shall  be  filed  in  the 
office  of  the  Secretary  of  State  of  the  State  of  Indiana,  and  the  same  fees  be  paid 
to  the  Secretary  of  State,  for  the  use  of  the  State,  as  would  be  paid  were  the 
corporation  then  being  originally  organized  with  a  capital  stock  equal  to  the 
amount  of  such  increase  from  the  time  of  such  filing,  and  on  payment  of 
such  fees  the  authorized  common  capital  stock  of  such  corporation  shall  be 
increased  to  the  amount  so  authorized  by  its  stockholders  and  directors, 
and  the  same  maybe  subscribed  for  and  certificates  issued  therefor  under 
and  subject  to  all  the  limitations  applicable  to  the  issue  of  the  company's 
original  stock  (sec.  4056). 

Any  such  company  may  at  any  regular  annual  meeting  of  its  stockholders, 
or  at  a  meeting  called  in  manner  aforesaid,  by  a  like  vote  of  its  stockholders 
ratified  by  a  like  vote  of  its  directors,  reduce  the  authorized  common  capital 
stock  of  the  corporation  so  far  as  then  unsubscribed  for  or  then  not  outstanding 
in  the  hands  of  stockholders,  and  when  a  copy  of  the  minutes  of  said  two  meet- 
ings, certified  as  aforesaid,  shall  be  filed  in  the  office  of  the  Secretary  of  State 
of  the  State  of  Indiana,  and  the  same  fees  shall  be  paid  to  him  for  the  use  of  the 

::i7 


DIGEST    OF    INCORPORATION    ACTS.  —  INDIANA. 

State  as  would  be  paid  were  the  company  then  organizing  as  a  coiporation  not 
for  pecuniary  profit,  from  the  time  of  such  filing  and  payment  the  authorized 
capital  stock  shall  be  reduced  to  the  amount  in  said  resolutions  of  the  stock- 
holders and  directors  stated ;  and  it  shall  thereupon  be  unlawful  for  any  such 
company,  so  long  as  such  reduction  of  capital  stock  shall  stand,  to  issue  any 
part  of  the  original  authorized  capital  as  was  not  so  subscribed  for  and  out- 
standing before  such  resolutions  were  adopted  (sec.  4056). 

Any  such  corporation  may  define,  shorten,  or  extend  the  period  of  its  corpo- 
rate existence  in  the  following  manner  :  Its  stockholders  at  any  regular  annual 
meeting,  or  a  called  meeting,  for  which  notice  as  aforesaid  has  been  given,  may 
by  a  like  vote  of  its  stockholders,  ratified  by  a  like  vote  of  its  directors,  reduce, 
define,  or  extend  the  period  of  its  corporate  existence  by  naming  in  the  resolu- 
tion a  date  when  the  existence  shall  end,  which  date  shall  not  be  later  than  fifty 
years  from  the  date  of  said  stockholders'  meeting,  and  when  a  copy  of  the 
minutes  of  said  two  meetings,  certified  as  aforesaid,  shall  be  filed  in  the  office 
of  the  Secretary  of  State  of  the  State  of  Indiana  and  the  same  fees  shall  be 
paid  to  him  for  the  use  of  the  State  as  would  be  payable  were  the  corporation 
just  organizing,  then  and  thereby  the  term  of  existence  of  such  corporation  shall 
become  and  be  the  period  named  in  such  resolutions ;  but  if  such  time  shall  not 
clearly  be  an  extension  or  enlargement  of  the  term  of  corporate  existence,  the 
Secretary  of  State  shall  not  permit  the  papers  to  be  filed  unless  and  until  the 
officers  who  certified  them,  or  other  proper  officers  of  the  company,  shall  make 
and  file  therewith  an  affidavit,  stating  that  the  corporation  has  no  debt  or 
liability  the  date  of  whose  maturity  will  be  later  than  the  date  named  in  said 
resolutions  for  the  expiration  of  corporate  existence  (sec.  4056). 

Any  such  corporation  at  any  regular  meeting  of  its  stockholders,  or  at  a 
meeting  of  them  called  in  manner  aforesaid,  may,  by  a  like  vote  ratified  by  a 
like  vote  of  its  directors,  define,  limit,  or  enlarge  the  express  objects  of  its  crea- 
tion, but  if  they  be  enlarged,  the  objects  as  changed  shall  include  no  object 
that  could  not  be  lawfully  included  if  the  corporation  were  then  organizing 
originally ;  and  when  a  copy  of  the  minutes  of  said  two  meetings,  certified  as 
aforesaid,  shall  be  filed  in  the  office  of  the  Secretary  of  State  of  the  State  of 
Indiana  and  the  same  fees  shall  be  paid  to  him  for  the  use  of  the  State  as 
would  be  paid  were  the  company  then  organizing  as  a  corporation,  from  the 
time  of  such  fifing  and  payment  the  authorized  objects  or  scope  of  the  corpora- 
tion shall  be  defined,  limited, or  enlarged  by  such  resolutions:  Provided,  however, 
that  whenever  four-fifths  or  more  of  all  of  the  outstanding  capital  stock  entitled 
to  vote  at  stockholders'  meetings  of  any  such  corporation  shall  in  pursuance 
of  the  provisions  of  the  act  have  determined  that  any  change  authorized  to 
be  made  by  this  act  shall  be  made  then,  and  in  that  event  any  stockholder  whose 
stock  at  said  meeting  voted  against  such  change,  may  within  ten  days  after 
such  meeting  by  notice  in  writing  deliver  to  the  corporation  named  his  valuation 
of  his  stock  and  name  an  appraisor  to  appraise  the  same  in  case  the  company 
and  he  cannot  agree  as  to  such  value.  In  case  the  company  and  he  cannot 
agree  as  to  such  valuation,  then  and  thereupon  such  corporation  shall  name  an 
appraisor,  and  the  two  appraisors  so  selected  shall  select  a  third  appraisor,  all 
of  whom  shall  be  disinterested  persons,  and  the  determination  of  any  two  of  the 
three  appraisors  fixing  a  fair  cash  value  of  the  stock  of  such  stockholder  shall 
be  conclusive  and  binding  upon  the  parties  except  as  hereinafter  provided,  and 
such  appraisors  shall,  as  soon  as  they  have  made  such  appraisement,  reduce  the 
same  to  writing  in  duplicate,  and  those  appraisors  agreeing  to  the  valuation 
318 


DIGEST    OF    INCORPORATION    ACTS.  —  INDIANA. 

shall  sign  such  duplicates,  one  of  which  duplicates  shall  be  delivered  by  them 
to  the  company  and  the  other  to  the  said  stockholder  or  his  proxy  so  voting 
his  stock  at  said  meeting.  The  said  corporation,  or  a  majority  of  stockholders 
favoring  such  charge,  shall  within  thirty  days  after  such  valuation  shall  have 
been  arrived  at  by  the  foregoing  appraisement,  pay  to  said  stockholder  or  his 
proxy,  or  if  both  be  absent  or  refuse  to  accept  the  money,  deposit  to  the  credit 
of  such  stockholder  in  a  solvent  national  bank  or  trust  company  in  Indiana 
the  value  of  said  stock  as  was  agreed  upon  or  fixed  by  appraisement.  Such 
company  shall  pay  all  of  the  reasonable  charges  and  expenses  of  the  three 
appraisers  in  making  and  certifying  such  appraisement.  Such  stock  from  the 
time  of  such  payment  or  deposit  shall  belong  to  the  person  or  persons  whose 
money  was  so  paid  therefor,  and  if  the  same  was  the  money  of  such  corporation 
such  stock  shall  become  treasury  stock  of  such  corporation  to  be  reissued  or 
retired  as  the  board  of  directors  of  the  corporation  may  determine  (sec.  510f>). 

Whenever  any  such  corporation  shall  in  pursuance  of  the  provisions  of  this 
act  present  to  the  Secretary  of  State  for  filing  any  certified  copy  of  any  meetings 
of  its  stockholders  if  it  does  not  appear  that  the  same  were  adopted  by  a  favor- 
ing vote  of  their  outstanding  stock  entitled  to  vote  at  stockholders'  meetings, 
the  Secretary  of  State  shall  refuse  to  file  the  same,  and  the  same  shall  not  be 
filed  or  take  effect  unless  such  certificate  shall  be  accompanied  by  the  affidavit 
of  one  or  more  of  the  officers  or  directors  of  said  company  showing  therein  that 
any  stockholder  who  voted  at  said  meeting  against  the  action  of  a  majority  of 
the  stock  did,  in  pursuance  of  this  section,  name  a  value  or  call  for  an  appraise- 
ment of  his  stock,  or  showing  what  stockholders  so  voting  against  a  majority 
did  so  value  their  stock  and  demand  an  appraisement,  and  that  an  appraisement 
was  made  or  value  agreed  upon  as  in  this  section  required,  and  showing  that 
the  value  of  said  stock  so  determined  by  agreement  or  appraisement  was  paid, 
or  deposited  as  by  this  section  required  to  be  done.  In  case  any  stockholder 
shall  not  be  satisfied  with  the  valuation  so  fixed  by  appraisement  he  may  bring 
his  action  against  said  corporation  at  any  time  within  one  year  in  any  Circuit 
or  Superior  Court  having  jurisdiction  of  the  defendant  to  have  the  fair  value  of 
his  stock  as  of  the  date  of  such  appraisement  determined,  and  the  final  judgment 
in  said  action  shall  be  binding  on  said  defendant,  and  it  shall  be  liable  in  per- 
sonam therefor  without  relief  from  valuation  or  appraisement  laws  for  the 
excess  valuation  over  the  sum  so  deposited  (sec.  4056). 

Any  domestic  corporation  may,  at  any  annual  or  other  meeting  called  for 
that  purpose,  of  the  stockholders,  increase  or  decrease  the  number  of  shares 
into  which  its  capital  stock  shall  be  divided,  provided  that  such  capital  stock 
shall  be  divided  into  shares  of  not  more  than  $100  each,  and  that  written  or 
printed  notice  of  such  proposed  increase  or  decrease  shall  be  given  by  the  secre- 
tary of  such  corporation  to  its  stockholders  by  depositing  such  notice  in  the 
mail  at  least  thirty  days  before  such  annual  or  other  meeting  called  for  the 
purpose,  addressed  to  their  last  known  place  of  residence,  and  that  at  such 
meeting  not  less  than  two-thirds  of  the  whole  capital  stock  of  such  corporation 
shall  vote  in  favor  of  such  increase  or  decrease.  A  copy  of  the  record  and  pro- 
ceedings of  the  meeting  shall  be  filed  in  the  office  of  i\^<-  Secretary  of  State, 
certified  to  by  the  president  and  secretary  of  such  corporation  within  thirty 
days  after  such  meeting  (Laws  of  1909,  ch.  45,  sec.  1). 

25.  Dissolution.  —  May  voluntarily  dissolve  without  recourse"  to  the 
courts  by  compliance  with  the  statul  1050,  5065,  5068). 

State  v.  Trustees,  6  Ind.  77. 

319 


DIGEST    OF    INCORPORATION    ACTS.  —  INDIANA. 

26.  Foreign  Corporations.  —  Foreign  corporations  desiring  to  transact 
business  in  Indiana  must  make  an  application  to  the  Secretary  of  State,  signed 
and  sworn  to  by  the  president  and  secretary,  stating  what  business  such  cor- 
poration proposes  to  pursue  in  Indiana,  the  amount  of  its  capital  stock,  whether 
it  is  transacting  or  is  intending  to  transact  business  in  any  other  State  or  country, 
the  proportion  of  its  business,  based  upon  its  total  business  for  the  year  imme- 
diately preceding,  to  be  carried  on  in  the  State  of  Indiana,  or  if  a  newly  organ- 
ized corporation,  then  the  proportion  as  nearly  as  can  be  determined  by  estimate, 
to  be  transacted  in  Indiana,  the  amount  paid  in  upon  its  capital  stock,  what 
property,  assets,  and  estimate  of  the  value  thereof,  to  be  employed  in  the  busi- 
ness of  such  corporation  in  Indiana.  If  any  of  its  capital  stock  has  not  been 
paid  in,  what  disposition  is  to  be  made  thereof.  The  name  of  the  president, 
directors,  and  secretary  of  such  corporation  and  their  residence ;  where  its  prin- 
cipal office  in  Indiana  will  be  located,  and  the  name  and  address  of  some  agent 
or  attorney  in  fact  upon  whom  service  of  process  can  be  had.  Such  corpora- 
tion shall  also  file  with  the  Secretaiy  of  State  a  copy  of  its  charter  or  articles 
of  incorporation,  or  in  case  such  corporation  is  incorporated  merely  by  a  cer- 
tificate, then  a  copy  of  its  certificate  of  incorporation  duly  certified  and  authen- 
ticated by  the  officer  who  issued  the  original  or  by  the  register  or  recorder  in 
which  such  original  charter,  articles,  or  certificate  may  have  been  recorded. 
The  Secretary  of  State  shall  have  the  power  to  prescribe  the  form  of  such  appli- 
cation, and  may  propound  additional  interrogatories  to  the  applicant  respect- 
ing the  character  of  the  business,  etc.,  which  the  incorporators  shall  answer 
under  oath,  and  shall  be  filed  with  such  application  and  with  a  certified  copy 
of  its  articles  or  certificate.  Such  application  shall  contain  an  agreement  by 
such  corporation  that  it  will  not  transfer  from  any  court  of  this  State  any 
pending  case  to  any  court  of  the  United  States  save  by  regular  course  of  appeal 
in  the  said  courts.  The  Secretary  of  State  is  authorized  to  issue  a  certificate 
of  such  foreign  corporation  to  do  business  within  the  State,  and  is  required  to 
state  in  such  certificate  of  authority  the  powers  and  objects  of  the  corporation 
which  may  be  exercised  in  Indiana.  All  foreign  corporations  permitted  to  do 
business  in  the  State  must  keep  on  file  in  the  office  of  the  Secretary  of  State  an 
affidavit  of  the  president  or  secretary  showing  the  location  of  the  principal 
business  office  in  the  State  of  Indiana,  and  the  name  of  some  person  upon 
whom  process  may  be  served.  No  foreign  corporation  admitted  to  do  busi- 
ness in  the  State  under  the  provisions  of  the  act,  shall  hold  any  real  estate  ex- 
cept such  as  may  be  for  the  proper  carrying  on  of  its  legitimate  business  (Laws 
of  1909,  chap.  59). 

Within  thirty  days  after  the  1st  day  of  January  of  each  year  foreign  corpora- 
tions must  make  a  report  to  the  Secretary  of  State  under  oath,  stating  the  then 
name  of  the  corporation,  its  total  capital  stock,  the  proportion  of  its  business  in 
the  State,  the  value  of  its  property  and  assets  in  the  State,  and  the  proportion 
thereof  as  compared  with  its  total  property  assessed.  The  character  of  the  busi- 
ness being  transacted  in  the  State,  the  location  of  its  office,  the  name  of  its  agent 
or  attorney,  in  fact  and  the  names  of  its  president,  secretary,  and  directors,  and 
their  residences.  Whenever  such  annual  report  shall  show  an  increase  of  §5,000 
or  more  in  the  proportion  of  property  in  the  State,  the  corporation  shall  pay  an 
additional  fee  on  such  increase.  Before  any  foreign  corporation  shall  be  au- 
thorized to  do  business  in  the  State,  it  must  pay  to  the  Secretary  of  State  upon 
the  proportion  of  its  stock  represented  by  its  property  and  business  in  Indiana, 
a  fee  of  $25  on  the  first  $10,000  or  under,  thereof;  and  one-tenth  of  one  per  cent 

320 


DIGEST    OF    INCORPORATION    ACTS.  —  INDIANA. 

on  all  amounts  in  excess  of  $10,000;  for  increase  in  proportion  in  this  State  a 
fee  of  $10  for  an  amount  of  $10,000  or  less,  and  one-tenth  of  one  per  cent  addi- 
tional on  all  amounts  in  excess  of  $10,000;  for  filing  annual  report  a  fee  ot  M 
must  be  paid.  In  addition  there  shaJl  be  collected  such  certificate  and  other 
fees  as  is  elsewhere  provided  by  statute.  Any  foreign  corporation  having  the 
same  or  strikingly  similar  name  as  any  existing  Indiana  corporation,  or  having 
the  same  or  strikingly  similar  name  as  any  foreign  corporation  previously  ad- 
mitted to  do  business  in  the  State,  shall  not  be  licensed  to  do  business  in  Indiana 
under  such  name  (sees.  4085-4105). 

Hockett  v.  State,  105  Ind.  250;  5  N.  E.  178;  Machine  Co.  v.  Caldwell,  54  In.l.  270;  Am. 
Insurance  Co  v.  Wellman,  69  Ind.  413;  Singer  Manufacturing  Co.  v.  Brown,  64  lnd.  ots; 
Brechbill  v.  Randall,  102  Ind.  328;  1  N.  E.  862;  P.  B  L  &  S ■  Ass'n v.  Markley.  27  lnd. 
Ap  128-  60  N  E  1013;  N.  M.  N.  G.  Co.  v.  Smith,  27  Ind.  Ap.  4,2;  61  V  L.  10;  b.  b.  & 
L  Ass'n  v.  Elbert,  153  Ind.  198;  54  N.  E.  753. 


21  321 


DIGEST    OF    INCORPORATION    ACTS.  —  IOWA. 


IOWA. 

(The  references  are  to  the  Code  of  1897,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  be  incorporated. 

—  The  Business  Corporation  Act  of  Iowa  is  found  in  the  statutes  of  that  State, 
Title  IX.  sees.  1607-1641  inclusive,  as  amended  by  the  Session  Laws  of  1899, 
1901,  and  1903.  There  are  special  requirements,  not  hereinafter  set  out,  as  to 
banks,  building  associations,  fidelity  companies,  insurance,  railroad,  telegraph, 
telephone,  and  water-power  companies. 

2.  Incorporators.  — Any  number  of  persons  may  be  incorporators.  The 
law  expressly  provides  that  a  single  person  may  incorporate  under  the  General 
Corporation  Act.    There  are  no  residential  requirements  (sees.  1607,  1608). 

3.  Articles  of  Incorporation.  — The  act  requires  that  before  commenc- 
ing business  the  incorporators  must  adopt  articles  of  incorporation,  but  it  does 
not  point  out  specifically  all  of  the  contents  of  the  same.  The  act  does,  however, 
prescribe  the  contents  of  the  notice  of  incorporation,  which  is  required  to  be 
published.     The  notice  here  referred  to  must  contain: 

(a)  The  name  of  the  corporation  and  its  principal  place  of  business.  Simi- 
larity of  names  is  not  forbidden. 

(b)  The  general  nature  of  the  business  to  be  transacted.  There  is  no  express 
authority  for  the  issuance  of  a  charter  authorizing  the  transaction  of  more  than 
one  general  line  of  business. 

(c)  The  amount  of  the  capital  stock  authorized,  and  the  times  and  con- 
ditions on  which  it  is  to  be  paid  in.  The  capital  stock  may  be  any  amount. 
The  par  value  of  each  share  may  be  any  amount. 

(d)  The  time  of  the  commencement  and  the  termination  of  the  corpora- 
tion. This  is  limited  to  not  more  than  twenty  years  in  ordinary  business 
corporations  (sec.   1618). 

(e)  By  what  officers  or  persons  its  affairs  shall  be  conducted  and  the  times 
when  and  the  manner  in  which  they  will  be  elected.  A  board  of  directors  of 
any  number  of  persons  may  be  named. 

(/)  The  highest  amount  of  indebtedness  to  which  it  is  at  any  time  to  subject 
itself.  This  must  not  exceed  two-thirds  of  its  capital  stock.  This  limitation 
does  not  apply  to  risks  of  insurance  companies,  certain  liabilities  of  banks,  cer- 
tain bonds  or  other  railway  or  street  railway  securities,  or  to  debentures  or  bonds 
secured  by  the  actual  transfer  of  certain  real  estate  securities. 

Hener  v.  Carmichael,  82  Iowa,  288;  47  N.  W.  R.  1034 

(g)  Whether  private  property  is  to  be  exempt  from  corporate  debts  (sees. 
1610-1613).  While  the  law  does  not  prescribe  all  that  the  articles  shall  con- 
tain, it  is  the  universal  custom  to  cover  at  least  all  of  the  matters  required  in 
the  foregoing  notice.     (See  sec.  1613  ;  Laws  of  1902,  chap.  67.) 

Every  domestic  corporation  must  designate  in  its  articles  of  incorporation 
its  principal  place  of  business,  which  must  be  in  this  State,  and  if  outside  the 
limits  of  a  city  or  town,  then  its  post-office  address  must  be  given.  The  place  of 
business  so  designated  shall  not  be  changed  except  through  amendment  of  its 
articles  of  incorporation.  This  place  of  business  shall  be  in  charge  of  an  agent 
of  the  corporation  and  shall  be  the  place  where  it  shall  hold  its  meetings,  and 

322 


DIGEST    OF    INCORPORATION    ACTS.  —  IOWA. 

keep  a  record  of  its  proceedings,  and  its  stock  and  transfer  books  (Laws  of  1909, 
chap.  104,  sec.  2). 

4.  Statutory  Powers.  —  The  Iowa  statutes  merely  enumerate  the  implied 
common  law  powers  of  corporations  (sec.  1609).  For  the  purpose  of  repairs, 
rebuilding,  enlarging  or  to  meet  contingencies,  or  for  the  purpose  of  creating 
a  sinking  fund,  the  corporation  may  set  apart  a  sum  which  it  may  loan  and 
take  proper  security  therefor  (sec.  1630).  Stock  certificates  cannot  be  issued 
without  having  endorsed  on  the  face  thereof  the  amount  or  portion  paid  thereon 
and  whether  such  payment  has  been  in  money  or  property  (sec.  1627  ;  Laws  of 
1904,  chap.  55). 

Calumet  Paper  Co.  v.  Company,  96  Iowa,  147;  64  N.  W.  782;  Traer  v.  Company  (Iowa), 
99  N.  W.  290;  McKee  v.  Company  (Iowa),  98  N.  W.  609;  S.  C.  T.  R.  &  W.  Co.  v.  Trust  Co., 
82  Fed.  124. 

5.  Procuring  the  Charter.  —  The  incorporators  must  sign  and  acknowl- 
edge the  articles  of  incorporation.  The  recorder  must  within  five  days  there- 
after endorse  thereon  the  time  when  the  same  were  filed  and  the  book  and  page 
where  the  record  will  be  found  (Laws  of  1909,  chap.  104).  They  must  be  re- 
corded in  the  office  of  the  register  of  deeds  of  the  county  where  the  principal 
place  of  business  is  located.  The  articles  bearing  the  endorsement  of  the  re- 
corder as  to  the  time  when  the  same  were  recorded  and  the  book  and  page  of 
such  record  must  be  forwarded  to  the  Secretary  of  State,  and  by  him  recorded. 
When  articles  of  incorporation  are  presented  to  the  Secretary  of  State  for  the 
purpose  of  filing,  if  he  is  satisfied  that  they  are  in  proper  form  to  meet  the  re- 
quirements of  law,  that  their  object  is  a  lawful  one  and  not  against  public  policy, 
that  their  plan  for  doing  business  is  honest  and  lawful,  he  shall  file  them,  but 
if  he  is  of  the  opinion  that  they  are  not  in  proper  form  to  meet  the  requirements 
of  law,  or  that  their  object  is  an  unlawful  one  or  against  public  policy,  or  that 
their  plan  for  doing  business  is  dishonest  or  unlawful,  he  shall  refuse  to  file 
them.  Should  a  question  of  fact  arise  as  to  the  legality  of  the  articles,  he  shall 
submit  them  to  the  Attorney-General,  whose  duty  it  shall  be  to  forthwith  ex- 
amine and  return  them  with  an  opinion  in  writing  touching  the  point  or  points 
concerning  which  inquiry  has  been  made  to  him.  If  such  opinion  is  in  favor  of 
the  legality  of  the  articles  and  no  further  objections  are  propounded,  they  shall 
then,  and  upon  payment  of  the  proper  fee,  be  filed  and  otherwise  dealt  with  as 
by  law  provided.  If,  however,  such  opinion  be  against  their  legality,  they 
shall  not  be  filed.  Upon  the  rejection  of  any  articles  of  incorporation  by  the 
Secretary  of  State  except  for  the  reason  that  they  have  been  held  by  the 
Attorney-General  to  be  illegal,  they  shall,  if  the  person  or  persons  presenting 
them  so  request,  be  submitted  to  the  Executive  Council,  who  shall  as  soon  as- 
practicable  consider  the  said  articles,  and  if  the  Council  determines  that  the 
articles  are  in  proper  form,  of  honest  purpose,  not  against  public  policy,  nor 
otherwise  objectionable,  he  shall  so  advise  the  Secretary  of  State  in  writing, 
whereupon  he  shall,  upon  payment  of  the  proper  fees,  file  the  same  and  proceed 
otherwise  as  the  law  directs;  but  if  the  Council  sustains  the  previous  ait  inn 
of  the  Secretary  of  State  in  rejecting  said  articles,  said  decision  by  the  Council 
shall  be  reported  to  the  Secretary  of  State  in  writing,  who  shall  then  return  said 
articles  to  the  person  or  persons  presenting  them,  with  such  explanation  as 
.-hall  be  proper  in  the  case  (Laws  of  1907,  chap.  70,  as  amended  by  Law  of 
1909,  chap.  104). 

The  organization  tax  must  be  paid  at  the  time  of  the  recording.  Within 
three  months  from  the  date  of  the  certificate  of  incorporation  a  notice  must  be 

323 


DIGEST    OF    INCORPORATION    ACTS.  —  IOWA. 

published  once  each  week  for  four  consecutive  weeks  in  some  newspaper  as 
convenient  as  practicable  to  the  principal  place  of  business,  which  must  con- 
tain the  matters  set  out  in  reference  to  this  notice  in  par.  3,  supra.  Proof 
of  such  publication  by  affidavit  of  the  publishers  of  the  newspaper  in  which 
it  is  made  must  be  filed  with  the  Secretary  of  State.  Both  the  corporation  and 
persons  sued  by  the  corporation  are  forbidden  to  set  up  want  of  legal  organiza- 
tion on  the  part  of  the  corporation  as  a  defence  (sees.  1610,  1613,  1636). 

First  Nat.  Bank  v.  Davies,  43  Iowa,  424;  Heald  v.  Owen,  79  Iowa,  23;  44  N.  W.  210; 
Berkson  v.  Anderson  (Iowa),  87  N.  W.  402. 

6.  Corporate  Indebtedness.  —  Corporate  indebtedness  cannot  exceed 
two-thirds  of  the  capital  stock  (sec.  1611),  except  in  the  cases  indicated  in 
sec.  3,  subdivision  "f,"  supra. 

7.  Organization  Tax.  —  Up  to  $10,000,  $25,  and  an  additional  fee  of 
$1  per  thousand  for  all  stock  authorized  beyond  that  amount  (sec.  1610;  Laws 
of  1902,  chap.  66). 

8.  Filing  and  Recording  Fees.  — The  payment  of  the  organization  tax 
entitles  the  corporation  to  a  certificate  of  incorporation  free  of  charge.  The 
payment  of  the  organization  tax  also  includes  the  charge  for  filing  articles 
of  incorporation.  The  Secretary  of  State  is  entitled  to  charge  10  cents  per 
hundred  words  for  recording  such  articles.  The  charge  for  filing  and  record- 
ing amendments  to  articles  of  incorporation  is  a  certificate  fee  of  $1  and  the 
recording  fee  of  10  cents  per  hundred  words.  For  issuing  certified  copy  of 
articles  of  incorporation  the  charge  is  $1  for  certificate  and  10  cents  per  hundred 
words  for  making  copy.  For  certified  copy  of  certificate  of  incorporation,  $1.  The 
legal  rate  for  publishing  articles  of  incorporation,  averaging  one  thousand  words 
in  length,  is  about  $30.  It  varies,  being  based  upon  so  many  fines  of  brevier  type 
of  a  specified  length.  The  newspapers  will  usually  publish  for  twenty  or  even  fifty 
per  cent  of  the  legal  rate.  The  recording  fees  in  local  county  office  are  50  cents  for 
the  first  four  hundred  words,  and  10  cents  per  hundred  words  for  the  balance. 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  the  articles  of  incorporation  are  filed  and  recorded  in  the  office  of  the 
County  Recorder  where  the  principal  place  of  business  is  located  and  in  the  office 
of  the  Secretary  of  State,  provided,  further,  that  the  publication  of  the  notice 
required  by  law  is  thereafter  made  and  proof  thereof  duly  filed  in  the  office 
of  the  Secretary  of  State.  Any  domestic  corporation  that  does  not  maintain 
an  office  in  the  county  of  its  organization  and  transact  business  in  the  State 
must  file  with  the  Secretary  of  State  a  written  instrument  duly  signed  and  sealed, 
authorizing  the  Secretary  of  State  to  accept  service  of  process  for  and  in  behalf 
of  such  corporation  (Laws  of  1906,  chap.  64).  Business  must  be  commenced 
within  two  years  from  the  time  the  articles  are  filed,  in  order  to  avoid  for- 
feiture of  its  franchises  (sees.  1614,  1628). 

Thornton  v.  Balcom,  85  Iowa,  198;  52  N.  W.  190;  Johnson  v.  Kessler,  76  Iowa,  411;  41 
N.  W.  57. 

10.  Organization  Meetings.  —  Ordinarily  organization  meetings  are  held 
within  the  State  (sec.  1612).  The  statute  reads  as  follows :  "  If  the  corpora- 
tion transacts  business  in  this  State,  the  articles  shall  fix  its  principal  place  of 
business,  which  must  be  in  this  State,  and  in  charge  of  an  agent  of  the  corpo- 
ration, at  which  place  it  shall  keep  its  stock  and  transfer  books  and  hold  its 
meetings"  (Id.). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meet- 
ings must  ordinarily  be  held  within  the  State.     Directors'  meetings  may  be 

324 


DIGEST    OF    INCORPORATION    ACTS.  —  IOWA. 

held  without  the  State  if  the  by-laws  so  provide.    (See  sec.  1612,  cited  at  length 
above;  also  Laws  of  1904,  chap.  55.) 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications. — 
Any  number  of  persons  may  act  as  directors.  There  arc  no  residential  or  other 
requirements. 

b.  Liabilities.  —  Directors  are  penally  liable  for  unlawful  diversion  of  cor- 
porate funds,  for  declaring  illegal  dividends,  and  for  keeping  false  books  of 
account.  The  payment  by  the  directors  of  any  dividend  when  the  corporation 
is  known  by  them  to  be  insolvent,  or  any  dividend  the  payment  of  which  would 
render  it  insolvent  or  which  diminishes  the  amount  of  its  capital  stock,  ren- 
ders the  directors  knowingly  consenting  thereto  jointly  and  severally  liable 
for  all  debts  of  the  corporation  then  existing.  If  the  indebtedness  of  any  corpo- 
ration shall  exceed  the  amount  of  indebtedness  permitted  by  law,  the  directors 
knowingly  consenting  thereto  shall  be  personally  liable  to  the  creditors  thereof 
for  such  excess  (sees.  1621-1623).  They  are  also  liable  for  knowingly  making 
false  statements  relative  to  the  corporation's  affairs  having  a  tendency  to  produce 
or  give  the  shares  of  such  corporation  a  greater  or  less  value  than  they  really 
possess.     The  penalty  is  either  imprisonment  or  fine  (Laws  of  1907,  chap.  72). 

Frost  Mfg.  Co.  v.  Foster,  76  Iowa,  535;  41  N.  W.  212;  Miller  v.  Bradish,  69  Iowa,  278; 
28  N.  W.  594. 

13.  Stockholders'  Liabilities.  —  Failure  to  comply  substantially  with 
the  requirements  relative  to  organization  and  publicity  renders  the  individual 
property  of  stockholders  liable  for  corporate  debts  (sec.  1616).  They  are 
also  liable  to  creditors  of  the  corporation  for  all  unpaid  instalments  on  stock 
owned  by  them  or  transferred  by  them  for  the  purpose  of  defrauding  creditors 
(sec.  1631).  The  receipt  of  illegal  dividends  by  stockholders  makes  them  liable 
to  the  amount  of  such  dividend  so  received  for  all  liabilities  of  the  corporation 
then  existing  (sec.  1621).  Intentional  fraud  and  failure  to  comply  substantially 
with  the  articles  of  incorporation,  or  in  deceiving  the  public  or  individuals  in 
relation  to  their  means  or  their  liabilities,  shall  be  a  misdemeanor,  and  shall  sub- 
ject those  guilty  thereof  to  fine  or  imprisonment  or  both  at  the  discretion  of  the 
court.  Any  person  who  has  sustained  injury  from  such  fraud  may  also  recover 
damages  therefor  against  those  guilty  of  participating  in  such  fraud  (sec.  1620). 

Warfield  v.  Company,  72  Iowa,  666;  34  N.  W.  467;  Chisholm  v.  Forny,  65  Iowa,  333; 
21  N.  W.  664. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  officers  as  may  be  designated  in  the 
by-laws.  No  certificate  can  be  issued  without  having  endorsed  on  the  face 
thereof  what  amount  of  the  par  value  has  been  paid  to  the  corporation  issu- 
ing the  same  and  whether  such  payment  has  been  in  money  or  property  (sec. 
1627 ;  Laws  of  1900,  chap.  57). 

15.  Preferred  Stock.  —  The  statute  does  not  expressly  authorize  the 
issuance  of  preferred  stock  by  domestic  corporations.  They  undoubtedly  have 
the  power  to  issue  such  stock. 

16.  Payment  of  Capital  Stock.  —  No  business  corporation  shall  issue 
any  capital  stock  or  any  certificate  or  certificates  thereof  until  the  corporation 
has  received  the  par  value  thereof.  If  it  is  proposed  to  pay  for  the  said  capital 
stock  in  propertyor  in  any  other  thing  than  money, the  corporation  proposing  the 
same  must,  before  issuing  capital  stock  in  any  way,  apply  to  (lie  Executive 
Council  of  the  State  for  leave  so  to  do.    Such  application  shall  stale  i  lie  amount 


DIGEST    OF    INCORPORATION    ACTS.  —  IOWA. 

of  capital  stock  proposed  to  be  issued  for  a  consideration  other  than  money, 
and  set  forth  specifically  the  property  or  other  thing  to  be  received  in  payment 
for  such  stock.  Thereupon  it  shall  be  the  duty  of  the  Executive  Council  to 
make  investigation  to  ascertain  the  real  value  of  the  property  or  other  thing 
which  the  corporation  is  to  receive  for  the  stock ;  and  shall  in  its  finding  fix  the 
value  at  which  the  corporation  may  receive  the  same  in  payment  of  capital 
stock  for  the  said  property  but  not  at  a  greater  amount  than  the  value  so  fixed 
and  determined  by  the  Executive  Council. 

The  capital  stock  of  any  corporation  issued  in  violation  of  the  terms  and 
provisions  of  this  act  shall  be  void,  and  in  a  suit  brought  by  the  Attorney- 
General  on  behalf  of  the  State  of  Iowa  in  any  court  having  jurisdiction,  a  de- 
cree of  cancellation  shall  be  entered,  and  if  the  corporation  has  received  any 
money  or  thing  of  value  for  the  said  stock,  such  money  or  thing  of  value  shall 
be  returned  to  the  individual,  firm,  company,  or  corporation  from  whom  it 
was  received,  and  if  represented  by  labor  or  other  service  of  an  intangible 
nature,  the  value  thereo.  shall  constitute  a  claim  against  the  corporation  issu- 
ing stock  in  exchange  therefor  (Laws  of  1909,  chap.  104,  sec.  4).  Every  cor- 
porat  on  must  file  a  certificate  under  oath  with  the  Secretary  of  State  within 
10  days  after  the  issuance  of  any  capital  stock,  stating  the  date  of  issue,  the 
amount  issued,  the  sum  received  therefor,  if  payment  be  made  in  money  or  the 
property,  or  thing  taken,  if  such  be  the  method  of  payment  (Laws  of  1907, 
chap.  71). 

Singer  v.  Given,  61  Iowa,  93;  15  N.  W.  858. 

17.  Books. — Transfer  books  showing  the  name  of  the  person  by  whom 
and  to  whom  stock  is  transferred,  the  number  of  shares,  and  the  date  of  the 
transfer  must  be  kept  within  the  State  at  the  principal  office  of  the  corporation 
(sees.  1612,  1626).    They  are  open  to  public  inspection. 

18.  Office  and  Agent.  —  Every  corporation  must  maintain  a  principal 
office  within  the  State  with  an  agent  in  charge  thereof,  in  which  must  be  posted 
a  copy  of  the  by-laws,  a  statement  of  the  amount  of  capital  stock  subscribed, 
the  amount  of  capital  stock  actually  paid  in,  and  the  amount  of  indebtedness, 
all  for  public  inspection  (sees.  1612,  1624,  1626).  Any  domestic  corporation 
that  does  not  maintain  an  office  in  the  county  of  its  organization  and  transact 
business  in  the  State  must  file  with  the  Secretary  of  State  a  written  instrument 
duly  signed  and  sealed,  authorizing  the  Secretary  of  State  to  accept  service  of 
process  for  and  in  behalf  of  such  corporation  (Laws  of  1906,  chap.  64). 

19.  Reports.  — All  corporations,  domestic  and  foreign,  doing  business 
within  the  State  must,  between  the  1st  day  of  Ju'y  and  the  1st  day  of  August 
of  each  year,  make  and  file  an  annual  report  in  the  office  of  the  Secretary  of 
State.    (As  to  detai  s  of  such  report,  see  Laws  of  1909,  chap.  105.) 

20.  Anti-Trust  Statute.  —  Iowa  has  an  elaborate  anti-trust  statute  pro- 
hibiting certain  pools,  trusts,  and  conspiracies  (Code,  sees.  5060-5067). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Intentional  fraud 
in  failing  to  comply  substantially  with  the  articles  of  incorporation,  or  deceiv- 
ing the  public  in  relation  to  the  corporation's  means  and  liabilities,  or  a  diversion 
of  funds  which  results  in  the  insolvency  of  the  corporation,  works  a  forfeiture  of 
the  corporate  privileges  to  be  enforced  as  directed  by  law.  Failure  to  use 
the  charter  for  two  successive  years  is  a  ground  for  forfeiture  of  the  charter. 
Charter  may  also  be  forfeited  for  violation  of  the  anti-trust  act  (sees.  1622,  1628 ; 
see  also  sees.  4313-4335,  5065).     Any  corporation  violating  the  provisions  of 

326 


DIGEST    OF   INCORPORATION   ACTS.  —  IOWA. 

law  relative  to  the  issuance  of  capital  stock  may  be  dissolved  upon  application 
of  the  Attorney-General  in  behalf  of  the  State  (Laws  of  1907,  chap.  71). 

22.  Extension  of   Corporate  Existence.  —  Corporate  existence  may  be 
extended  for  an  additional  period  of  twenty  years  if  desired  (sec.  1618;    Laws 
of  1900,  chap.  56;  Laws  of  1902,  chap.  66;  Laws  of  1904,  chap.  2;   Law- 
1909,  chap.  104,  sec.  3;  see  also  34  G.  A.,  chap.  74). 

23.  Annual  License  Tax.  —  An  annual  fee  of  one  dollar  is  required  to 
be  paid  by  every  domestic  or  foreign  corporation  doing  business  within  the 
State.  This  fee  must  be  paid  between  the  1st  day  of  July  and  the  1st  day  of 
August  of  each  year  at  the  same  time  that  the  corporation  files  its  animal  re- 
port. If  this  fee  is  not  paid  by  the  1st  day  of  September  of  each  year  the  cor- 
poration incurs  the  following  penalties: 

For  the  month  of  September  the  sum  of  $2;  for  the  month  of  October 
the  sum  of  $4;  for  the  month  of  November  the  sum  of  $6;  for  the  month  of 
December  the  sum  of  $8;  and  for  each  month  thereafter  the  sum  of  $10.  If 
on  the  1st  day  of  May  following  such  corporation  shall  not  have  filed  the 
annual  report  and  paid  the  annual  fee  together  with  all  monthly  penalties  due 
at  the  time  of  filing  such  report  and  paid  the  State  fee,  the  Secretary  of  State 
shall  furnish  to  the  Attorney-General  a  list  of  such  delinquent  corporations, 
and  he  may  direct  the  county  attorney  of  the  county  in  which  the  corporation 
has  its  principal  place  of  business  to  bring  suit  for  the  collection  of  the  fee  and 
penalties  then  due,  or  may  bring  such  action  himself.  Any  domestic  corpora- 
tion may,  prior  to  the  1st  day  of  May,  1910,  and  the  1st  day  of  May  of  any 
subsequent  year,  escape  the  payment  of  fee  and  penalties  by  dissolving  the 
corporation,  and  filing  with  the  Secretary  of  State  the  proof  of  publication  and 
notice  of  dissolution.  Any  foreign  corporation  which  shall  fail  to  make  the 
annual  report  and  pay  the  annual  fee  and  penalties  that  may  be  due,  shall 
thereby  forfeit  its  right  to  do  business  within  this  State  (Laws  of  1909, 
chap.  105). 

24.  Amendments.  —  Changes  in  any  of  the  provisions  of  the  articles  may 
be  made  at  any  annual  meeting  of  stockholders  or  a  special  meeting  called  for 
that  purpose.  Amendments  are  valid  only  when  recorded,  approved,  and  pub- 
lished as  original  articles  are  required  to  be.  The  amendments  however  Deed 
only  be  signed  and  acknowledged  by  such  officers  of  the  corporation  as  may 
be  designated  to  perform  such  act  by  the  stockholders. 

If  any  increase  is  made  in  the  amount  of  capital  stock,  a  certificate  fee  of 
$1  and  a  recording  fee  of  10  cents  per  one  hundred  words  must  be  paid. 
No  recording  fee  less  than  50  cents.  Where  the  capital  stock  is  increased  a 
certificate  fee  shall  be  omitted,  but  a  filing  fee  of  $1  per  thousand  of  such 
increase,  together  with  a  recording  fee  of  10  cents  per  one  hundred  words, 
shall  be  paid. 

The  period  of  corporate  existence  may  be  renewed  from  time  to  time  if  a 
majority  of  the  votes  cast  at  any  regular  election  or  special  meeting  called 
for  that  purpose  in  favor  of  such  renewal,  and  if  those  wishing  such  renewal 
will  purchase  the  stock  of  those  opposed  thereto,  at  its  true  value.  Such  re- 
newals shall  date  from  the  expiration  of  the  corporate  period  which  it  succeeds 
and  shall  be  limited  in  duration  to  a  period  no!  exceeding  the  time  allowed  by 
law  to  the  same  class  of  corporations.  Within  five  days  after  the  said  action 
of  the  stockholders  for  the  renewal  of  any  corporation,  a  certificate  showing 
the  proceedings  resulting  in  such  renewal,  .-worn  toby  the  president  and  secre- 
tary of  the  corporation,  or  by  such  other  officers  as  may  be  dei  ignated  bj  the 

327 


DIGEST    OF   INCORPORATION   ACTS.  —  IOWA. 

stockholders  together  with  the  articles  of  incorporation,  which  may  be  the 
original  articles  of  incorporation  or  amended  and  substituted  articles,  shall  be 
filed  for  record  in  the  office  of  the  recorder  of  the  county  in  which  the  principal 
place  of  business  of  such  corporation  is  situated  and  the  same  shall  be  recorded. 
Upon  filing  with  the  Secretary  of  State  of  such  certificate  and  articles  of  in- 
corporation, within  ten  days  thereafter,  and  upon  the  payment  to  the  Secre- 
tary of  State  of  a  fee  of  $25,  together  with  a  recording  fee  of  10  cents  per  one 
hundred  words  and  an  additional  fee  of  $1  for  each  thousand  dollars  of 
authorized  stock  in  excess  of  $10,000,  the  Secretary  of  State  shall  record  the 
said  certificate  and  the  articles  of  incorporation  in  a  book  to  be  kept  by  him 
for  that  purpose,  and  shall  issue  a  proper  certificate  for  the  renewal  of  the  cor- 
poration. Within  three  months  after  the  fifing  of  the  certificate  and  articles 
of  incorporation  with  the  Secretary  of  State  the  corporation  so  renewed  shall 
publish  notice  of  renewal.  Such  notice  shall  be  published  once  each  week  for 
four  weeks  in  succession  in  a  newspaper  as  convenient  as  practicable  to  the 
principal  place  of  business  of  the  corporation  and  proof  of  publication  filed  in 
the  office  of  the  Secretary  of  State,  and  shall  contain  the  matters  and  things 
required  to  be  published  by  section  1613  of  the  act  relating  to  original 
incorporations. 

25.  Dissolution.  —  May  be  dissolved  prior  to  the  period  fixed  in  the  arti- 
cles of  incorporation  by  unanimous  consent  of  the  stockholders,  or  in  accord- 
ance with  the  provisions  of  its  articles,  and  notice  thereof  must  be  given  in  the 
same  manner  and  for  the  same  time  as  is  required  for  its  organization.  Courts 
of  equity  have  power  to  dissolve  or  close  up  the  business  (sees.  1617, 
1640). 

26.  Foreign  Corporations.  —  Any  corporation  for  pecuniary  profit,  other 
than  for  carrying  on  mercantile  or  manufacturing  business  as  clearly  defined 
and  restricted  by  its  articles  of  incorporation,  organized  under  the  laws  of  an- 
other State,  or  of  any  territory  of  the  United  States,  or  of  any  foreign  country, 
which  has  transacted  business  in  the  State  of  Iowa  since  the  1st  day  of  Sep- 
tember, 1886,  or  desires  hereafter  to  transact  business  in  this  State,  and  which 
has  not  a  permit  to  do  such  business,  shall  file  with  the  Secretary  of  State  a 
certified  copy  of  its  articles  of  incorporation,  duly  attested  by  the  Secretary  of 
State,  or  other  State  officer,  in  whose  office  the  original  articles  were  filed,  ac- 
companied by  a  resolution  of  its  board  of  directors  or  stockholders  authoriz- 
ing the  filing  thereof  and  also  authorizing  service  of  process  to  be  made  upon 
any  of  its  officers  or  agents  in  this  State  engaged  in  transacting  its  business, 
and  requesting  the  issuance  to  such  corporation  of  a  permit  to  transact  busi- 
ness in  this  State;  said  application  to  contain  a  stipulation  that  such  permit 
shall  be  subject  to  the  provisions  of  this  chapter.  Before  such  permit  is  issued, 
the  said  corporation  shall  pay  to  the  Secretary  of  State  the  same  fee  required 
for  the  organization  of  corporations  in  this  State,  and  if  the  capital  of  such 
corporation  is  increased,  it  shall  pay  the  same  fee  as  is  in  such  event  required 
of  corporations  organized  under  the  laws  of  this  State.  Any  corporation  trans- 
acting business  in  this  State  prior  to  the  1st  day  of  September,  1886,  shall  be 
exempt  from  the  payment  of  the  fees  required  under  the  provisions  of  this 
section.  The  Secretary  of  State  shall  thereupon  issue  to  such  corporation  a 
permit  in  such  form  as  he  may  prescribe,  for  the  transaction  of  the  business  of 
such  corporation,  and  upon  the  receipt  of  such  permit  said  corporation  shall 
be  permitted  and  authorized  to  conduct  and  carry  on  its  business  in  this  State. 
Nothing  in  this  section  shall  be  construed  to  prevent  any  foreign  corporation 

328 


DIGEST   OF   INCORPORATION   ACTS.  —  IOWA. 

from  buying,  selling,  and  otherwise  dealing  in  notes,  bonds,  mortgages,  and 
other  securities  (sec.  1637).  Foreign  corporations  doing  business  within  the 
State  must  file  the  same  annual  reports  and  pay  the  same  annual  license  tax 
as  is  required  of  domestic  corporations  (Laws  of  1909,  chap.  105). 

Ware  Cattle  Co.  v.  Anderson,  107  Iowa,  231;  77  N.  W.  1026:  Scottish  Union,  etc.  Co.  r. 
Herriott,  109  Iowa,  606;    80  N.  W.  665;    State  v.  Company,  91  Iowa,  517;   60  N.  \Y.  121. 


320 


DIGEST    OF    INCORPORATION    ACTS.  —  KANSAS. 


KANSAS. 

(The  references  stated  below  are  to  the  General  Statutes  of  Kansas,  1901,  unless  other- 
wise stated.) 

1.  Statute  under  which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  Kansas  is  found  in  the  General  Statutes  of 
that  State  for  1901,  chap.  23,  Arts.  1-21,  sees.  1317-1550,  as  amended  by  Laws 
of  1903,  chaps.  151-153;  Laws  of  1905,  chaps.  155-159 ;  Laws  of  1907,  chap. 
140.  Special  provisions  are  in  force  for  railway,  banking,  roads,  telegraph, 
trust,  building  and  loan,  warehouse,  bridge,  investment,  sewer,  express,  co- 
operative corporations  and  eleemosynary  corporations.  Foreign  corporations 
are  provided  for  by  Laws  of  1907,  chap.  140,  sees.  12-16.  Under  the  Gen- 
eral Act  as  amended  corporations  may  be  formed  for  forty-nine  enumerated 
purposes,  which  cover  substantially  all  lines  of  business.  (See  Laws  of  1907, 
chap.  140,  sec.  2.) 

2.  Incorporators.  —  There  must  be  at  least  five  incorporators,  three  of 
whom  must  be  citizens  of  the  State  (Laws  of  1907,  chap.  140). 

3.  Contents  of  Application  for  Charter.  —  The  incorporators,  five  or 
more  in  number,  must  make  a  written  application  to  the  Secretary  of  State 
upon  blank  forms  supplied  by  him  for  permission  to  organize  a  corporation. 
This  application  must  be  subscribed  by  all  of  the  proposed  incorporators  and 
must  set  forth : 

a.  Name.  —  There  can  be  only  one  corporation  of  the  same  name.  This 
must  indicate  the  nature  of  the  business  intended  to  be  carried  on.  It  must 
begin  with  the  word  "the"  and  end  with  the  word  "corporation,"  "company," 
"association,"  or  "society,"  and  must  indicate  by  its  corporate  name  the  busi- 
ness to  be  carried  on  by  said  corporation. 

b.  Domiciliary  Office.  —  The  place  where  its  principal  office  or  place  of  busi- 
ness is  to  be  located  within  the  State. 

c.  Duration.  —  Not  to  exceed  fifty  years. 

d.  Purposes.  —  The  full  nature  and  character  of  the  business  in  which  it 
proposes  to  engage.  The  statute  enumerates  fifty-four  classes  of  corporations 
which  may  be  organized  under  the  General  Act  (Laws  of  1907,  chap.  140;  Laws 
of  1911,  chaps.  125,  126). 

"The  statute  of  this  State,"  observes  the  Secretary  of  State,  "provides  that 
the  name  of  the  corporation  shall  indicate  the  character  of  the  business  in  which 
it  proposes  to  engage,  and  it  is  the  practice  of  the  charter  board  to  limit  the 
operation  of  the  corporation  to  a,  single  line  of  business,  except  as  its  engage- 
ment in  other  business  may  be  incidental  or  necessary  to  the  successful  operation 
of  such  business." 

Parkinson  Sugar  Co.  v.  Bank,  60  Kan.  474;  57  Pac.  126. 

e.  Incorporators.  —  Names  and  addresses  of  the  incorporators. 

/.  Capital  Stock.  —  This  may  be  any  amount.  The  par  value  of  shares  may 
be  any  amount.    (See  also  Laws  of  1904,  chap.  157;   Laws  of  1907,  chap.  140.) 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers  the  act  confers  the  following  additional  powers  :  To  authorize 
voting  by  proxy,  to  permit  cumulative  voting,  to  forfeit  stock  for  non-payment 
of  assessments,  to  issue  preferred  stock,  to  issue  bonds  (sees.  1248,  1266,  1269 ; 
Laws  of  1907,  chap.  140,  sees.  1,  24,  25). 

330 


DIGEST    OF    INCORPORATION    ACTS.  —  KANSAS. 

5.  Procuring  the  Charter.  —  The  petition  for  a  charter  must  be  presented 
to  the  charter  board,  composed  of  the  Attorney-General,  the  Secretary  of  Slate, 
and  the  State  Bank  Commissioner.  The  application  must  be  accompanied  by 
the  payment  of  S25,  known  as  the  "  application  fee."  The  Charter  Board  -hall 
make  a  careful  investigation  of  each  application,  and  shall  inquire  especially 
with  reference  to  the  character  of  the  business  in  which  the  proposed  incorpora- 
tion is  to  engage,  and  if  the  Board  shall  determine  that  the  business  or  undertak- 
ing is  one  for  winch  the  corporation  may  lawfully  be  formed,  and  that  the  appli- 
cants are  acting  in  good  faith,  the  application  shall  be  granted  and  a  certificate 
setting  forth  that  the  application  has  been  approved  shall  be  endorsed  upon  the 
application  and  signed  by  the  members  of  the  charter  board  approving  the  same 
(Laws  of  1911,  chap.  125).  Thereupon  the  charter  must  be  prepared,  containing: 
(1)  Name  of  the  corporation.  (2)  Purposes  thereof.  (3)  Location  of  principal 
place  of  business  within  the  State.  (4)  Duration  of  corporate  existence.  1 5  >  Num- 
ber of  directors,  names  and  residences  of  those  appointed  for  the  first  year. 

(6)  Amount  of  capital  stock,  and  the  number  of  shares  into  which  it  is  divided. 

(7)  Names  and  residence  of  the  stockholders  and  the  number  of  shares  held  by 
each.  Provision  may  be  made  also  to  the  effect  that  no  stockholder  shall  ever 
own,  or  vote  as  the  owner  or  by  proxy  or  both,  to  exceed  a  certain  minoritj'  part 
of  the  capital  stock  of  such  corporation,  and  such  provision  shall  be  binding 
upon  and  enforced  against  all  stockholders  of  such  corporation  (Laws  of  1905, 
chap.  15).  A  road  company  must  also  state  the  kind  of  road  intended  to  be 
constructed,  the  places  from  and  to  which  the  road  is  intended  to  run,  the 
counties  through  which  it  is  intended  to  run,  and  the  estimated  length  of  the  road. 
The  charter  of  a  bridge  or  ferry  company  must  also  state  the  stream  intended  to 
be  crossed  and  the  place  where  it  is  intended  to  be  crossed  by  the  bridge  or  ferry 
(Laws  of  1907,  chap.  140,  sees.  6,  7).  The  charter  must  be  subscribed  and  ac- 
knowledged by  at  least  five  incorporators,  three  of  whom  must  be  residents  of 
the  State  (Laws  of  1907,  chap.  140.  sec.  5).  The  charter  of  every  corporation 
after  the  paymentof  fees  provided  bylaw  to  be  paid  have  been  endorsed  t  hereon 
by  the  Secretary  of  State,  must  be  filed  in  the  office  of  the  latter,  who  shall  re- 
cord the  same  at  length  in  a  book  to  be  kept  for  that  purpose,  who  shall  retain 
the  original  on  file  in  his  office,  giving  a  certified  copy  of  it  to  the  incorporators. 
A  copy  of  the  charter  and  of  the  record  thereof,  duly  certified  by  the  Secretary 
of  State,  shall  be  evidence  of  the  creation  of  the  corporation  (Laws  of  1907, 
chap.  140,  sec.  11). 

Ryland  v.  Hollinger,  117  Fed.  216;  54  C.  C.  A.  248. 

6.  Corporate  Indebtedness.  —  Must  not  exceed  amount  of  authorized 
capital  stock  (sec.  1274). 

7.  Organization  Tax.  —  The  application  must  be  accompanied  by  what 
is  known  as  the  application  fee  of  S25,  and  before  the  charter  is  filed  the  appli- 
cants must  pay  to  the  Secretary  of  State  a  capitalization  fee  as  follows :  For  a 
corporation  having  an  authorized  capital  of  S  100,000  or  less,  the  fee  shall  be 
one-tenth  of  one  per  centum  of  the  amount,  but  never  less  than  $10.  For  a 
corporation  having  an  authorized  capital  greater  than  $100,000  the  fee  shall 
be  $100,  and  in  addition  thereto  one-twentieth  of  one  per  centum  of  the  amount 
of  such  capital  in  excess  of  $100,000  (Laws  of  L907,  chap.  IK),  sees.  _>l  _•:;;  Laws 
of  1011,  chap.  127). 

8.  Filing  and  Recording  Fees.  —  The  application  fee  to  the  charter 
board  is  $25,  and  to  the  Secretary  of  State  for  filing  and  recording  charter,  $2.60 
(Laws  of  1907,  chap.  120,  sees.  21,  22). 

:;:;i 


DIGEST    OF    INCORPORATION    ACTS.  —  KANSAS. 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  their  application  has  been  favorably  acted  upon  by  the  charter  board, 
the  application  fee  paid,  the  charter  properly  filed  and  recorded  with  the  Sec- 
retary of  State,  and  the  organization  tax  and  filing  fees  paid.  Corporations 
must  commence  business  within  one  year  after  fifing  and  recording  their  charter 
(Laws  of  1907,  chap.  140,  sees.  10,  12,  32). 

10.  Organization  Meeting.  —  Must  be  held  within  the  State  in  the  absence 
of  any  statute  providing  otherwise.     (See  sec.  1277.) 

11.  Meetings  of  Stockholders  and  Directors.  —  All  meetings  of  stock- 
holders must  be  held  within  the  State.  Directors'  meetings  may  be  held  with- 
out the  State  if  the  by-laws  so  provide  (sees.  1276,  1288,  1293). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  at  least  three  and  not  more  than  twenty-four  directors. 
Three  of  these  must  be  residents  of  the  State.  All  directors  must  be  stock- 
holders. Cumulative  voting  for  directors  is  permitted.  The  power  to  adopt 
by-laws  is  delegated  to  the  directors,  but  subject  to  amendment  by  stock- 
holders if  they  choose.  An  oath  of  office  is  required  (sees.  1269,  1271,  1276-1279, 
1282,  1288,  1293). 

b.  Liabilities.  —  Directors  are  jointly  and  severally  liable  for  knowingly 
declaring  or  paying  any  dividends  when  the  corporation  is  insolvent,  or  any 
dividend  the  payment  of  which  would  render  it  insolvent.  They  may  avoid 
this  liability  by  filing  their  objections  in  writing  with  the  secretary  of  the  cor- 
poration (sec.  1292). 

13.  Stockholders'  Liability.  —  Stockholders  are  liable  for  their  unpaid 
stock  subscriptions.  The  double  liability  of  stockholders  that  formerly  existed 
in  Kansas  was  removed  by  Constitutional  Amendment  adopted  in  1906,  amend- 
ing Art.  XII.  sec.  2  of  the  Constitution  so  as  to  read  as  follows:  "Dues  from 
every  corporation  shall  be  secured  by  the  individual  liability  of  the  stockholders 
to  the  amount  of  stock  owned  by  each  stockholder,  and  such  other  means  as 
shall  be  provided  by  law."  (See  also  Laws  of  1903,  chap.  152.)  If  stock  is 
reduced  without  the  prescribed  publication,  stockholders  are  liable  for  the 
amount  thereof  received  by  each  (Laws  of  1903,  chap.  151). 

Musgrave  v.  Association,  5  Kan.  App.  393;  49  Pac.  338;  Munson  v.  Warren,  63  Kan. 
182;  65  Pac.  222. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  officers  as  may  be  designated  in  the 
by-laws. 

15.  Preferred  Stock.  —  Preferred  stock  may  be  issued  by  insertion  of  a 
provision  therefor  in  the  charter,  or  by  the  unanimous  consent  of  all  the  com- 
mon stockholders  of  the  corporation  after  incorporation  (sec.  1287). 

16.  Payment  of  Capital  Stock. — The  capital  stock  is  payable  in  such 
amounts  and  in  such  manner  as  may  be  required  by  the  by-laws  under  direc- 
tion of  the  board  of  directors  (sees.  1285,  1289). 

Walburn  v.  Chenault,  43  Kan.  352. 

17.  Books.  —  A  record  must  be  kept  of  all  stock  subscribed  and  trans- 
ferred and  all  business  transactions.  Such  records  must  be  open  at  all  times 
to  the  inspection  of  stockholders  (sec.  1293).  All  books  of  account,  records,  etc., 
must  be  kept  at  the  general  office  in  the  State  (sec.  1293). 

18.  Office.  —  Every  corporation  must  maintain  an  office  within  the  State 

332 


DIGEST    OF    INCORPORATION    ACTS.  —  KANSAS. 

(sec.  1293).    The  treasurer's  office  and  all  corporate  funds  must  be  kept  within 
the  State  (sec.  1306). 

19.  Reports.  —  Every  corporation,  except  banking,  insurance,  and  rail- 
road corporations,  shall  file  annually  with  the  Secretary  of  State, on  or  before  the 
first  day  of  February,  a  statement  of  condition  of  such  corporation  on  the  31st 
day  of  December  preceding.  The  Secretary  of  State  shall  prepare  and  furnish 
blank  forms  for  such  annual  statements.  The  statement  to  be  made  by  a 
domestic  corporation  shall  set  forth  the  following:  (1)  The  authorized  capital 
stock;  (2)  the  paid  in  capital;  (3)  the  par  value  of  the  shares  of  the  capital 
stock ;  (4)  a  complete  and  detailed  statement  of  the  assets  and  liabilities  of  the 
corporation;  (5)  a  complete  list  of  the  stockholders,  with  the  post-olfice 
addresses  of  each  and  the  number  of  shares  held  by  each ;  (0)  the  names  and 
addresses  of  the  officers,  trustees,  or  directors  and  manager  elected  for  the 
ensuing  year.  The  Secretary  of  State  may  at  any  time  require  a  further  or 
supplemental  report  under  this  section,  which  shall  contain  the  same  informa- 
tion and  data  as  specified  in  the  annual  report  herein  required.  The  failure 
of  any  corporation  to  file  the  annual  statement  herein  provided  for  within 
ninety  days  from  the  time  provided  for  filing  the  same  shall  work  a  forfeiture 
of  the  charter  of  any  corporation  organized  under  the  laws  of  this  State,  and 
the  charter  board  may  at  any  time  thereafter  declare  the  charter  of  such  cor- 
poration forfeited,  and  upon  the  declaration  of  any  such  forfeiture  it  shall  be 
the  duty  of  the  Attorney-General  to  apply  to  the  District  Court  of  the  proper 
county  for  the  appointment  of  a  receiver  to  close  out  the  business  of  such 
corporation  ;  and  the  failure  of  any  foreign  corporation  to  file  such  annual 
statement  as  heretofore  provided  for  shall  work  a  forfeiture  of  its  authority  to 
do  business  in  this  State,  and  the  charter  board  may  at  any  time  declare  such 
forfeiture,  and  shall  publish  such  declaration  in  the  official  State  paper.  No 
action  shall  be  maintained  or  recovery  had  in  any  of  the  courts  of  this  State  by 
any  corporation  doing  business  in  this  State  without  first  obtaining  the  certifi- 
cate of  the  Secretary  of  State  that  the  annual  statements  herein  provided  for 
have  been  filed  as  required  by  this  act.  Fee  for  filing  report  is  $1  (Laws  of 
1907,  chap.  140,  sec.  29;  see  also  Laws  of  1908,  chap.  80;  see  also  Laws  of  L911, 
chap.  128).  Both  domestic  and  foreign  corporations  are  required  to  make 
annual  reports  on  or  before  the  20th  day  of  April  of  each  year  for  local  assess- 
ment and  taxation  purposes  (Laws  of  1911,  chap.  318). 

20.  Anti-Trust  Statute.  —  Kansas  has  an  elaborate  anti-trust  statute  pro- 
viding for  the  prohibition  of  certain  kinds  of  pools,  trusts,  or  conspiracies 
(sees.  2427,  2431,  7864-7874;  Laws  of  1905,  chaps.  2,  157;  Laws  of  1907,  chap. 
259;  Laws  of  1909,  chap.  261). 

State  v.  Jack,  69  Kan.  387;    Keene  v.  The  Company,  69  Ivan.  284. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  board 
is  authorized  by  law  to  declare  a  charter  void  for  failure  to  furnish  such  infor- 
mation, in  the  way  of  annual  reports  or  otherwise,  as  may  be  required  by  the 
Secretary  of  State.  The  charter  may  be  forfeited  for  illegal  use  or  abuse  of 
corporate  powers,  or  for  entering  illegal  trusts  and  combinations,  or  for  failure 
to  commence  business  within  one  year  from  filing  of  charter,  or  for  failure  to 
maintain  its  domiciliary  office  and  resident  directors  (sees.  1283,  L293,  1294, 
1310,  1311,7866;    Laws  of  L907,  chap.  140,86(58.31,32;    Laws  of  1905,  chaps.  2, 

315;  Laws  of  1909,  chap.  96).    All  domeatio  corporations  which  fail  for  three 

consecutive  years  to  file  their  annual  statements  with  the  Secretary  of  Stale  are 

333 


DIGEST    OF    INCORPORATION    ACTS.  —  KANSAS. 

subject  to  forfeiture  of  their  charters  by  the  State  Charter  Board  (Laws  of  1911, 

chap.  129). 

22.  Extension  of  Corporate  Existence.  —  Corporate  existence  may  be 
extended  for  successive  periods  of  fifty  years  by  filing  with  the  Secretary  of  State 
at  any  time  certificate  of  its  intention  to  so  extend  its  time  of  existence,  signed 
and  duly  acknowledged  by  the  president  and  secretary  after  the  same  has 
been  authorized  by  its  board  of  directors  and  approved  by  a  two-thirds  vote  of 
its  stockholders  present  at  any  meeting  duly  called  for  that  purpose  (Laws  of 
1907,  chap.  140,  sees.  17,  18,  23;  see  Laws  of  1911,  chaps.  127,  130). 

23.  Annual  License  Tax.  —  There  is  no  annual  license  tax. 

24.  Amendments.  —  Any  domestic  business  corporation  may  amend  its 
charter  in  any  of  its  parts  by  the  affirmative  vote  of  two-thirds  of  the  shares 
of  stock  of  any  such  corporation,  at  a  meeting  of  the  stockholders  called  for  the 
purpose  in  conformity  with  the  by-laws  thereof.  After  such  amendment  has 
been  duly  adopted  by  the  stockholders  a  copy  thereof,  duly  certified  by  the 
president  and  secretary  of  the  corporation,  shall  be  submitted  to  the  charter 
board,  and  when  approved  by  such  board  shall  be  filed  in  the  office  of  the 
Secretary  of  State  along  with  the  original  charter  of  the  corporation  (Laws  of 
1907,  chap.  140,  sees.  17,  18). 

When  the  name  of  a  corporation  shall  have  been  changed,  or  where  the 
capital  of  a  corporation  shall  have  been  decreased,  or  when  the  location  of 
the  principal  office  or  place  of  business  shall  have  been  changed,  notice  of  the 
same  shall  immediately  thereafter  be  published  once  each  week  for  four  con- 
secutive weeks  in  a  newspaper  printed  and  published  in  the  county  where  the 
principal  office  of  the  corporation  is  located  (Laws  of  1907,  chap.  140,  sec.  19). 

Any  corporation  may  increase  its  capital  stock  to  any  amount  not  exceeding 
three  times  the  amount  of  its  authorized  capital  by  vote  of  two-thirds  of  the 
stockholders  cast  at  any  meeting  duly  convened  for  that  purpose,  or  such  corpora- 
tion may  increase  its  capital  to  any  amount  by  vote  as  aforesaid,  provided  there 
be  an  actual  bona  fide  additional  paid  up  subscription  thereto,  equal  to  the 
amount  of  such  increase,  and  such  increase  shall  become  a  part  of  the  capital 
of  the  corporation  from  and  after  the  date  of  filing  the  certificate  of  such  amend- 
ment in  the  office  of  the  Secretary  of  State  (Laws  of  1907,  chap.  140,  sec.  20). 

In  order  to  decrease  the  capital  stock  the  president  of  the  corporation,  upon 
request  of  the  holders  of  one-fourth  of  stock,  or  the  board  of  directors  without 
such  request,  may  call  a  meeting  of  the  stockholders  for  the  purpose  of  pass- 
ing upon  the  question.  Notice  of  such  meeting  shall  be  given  in  the  manner 
and  time  provided  by  the  by-laws,  and  in  the  absence  of  such  a  provision  ten 
days'  notice  thereof  shall  be  given  to  the  stockholders  personally  or  by  mail. 
If  at  such  meeting  not  less  than  two-thirds  of  the  capital  stock  be  voted  in 
favor  of  such  decrease,  a  certificate  of  such  decrease  under  the  corporate  seal, 
signed  by  the  president  and  secretary  and  acknowledged  by  the  president,  shall 
be  filed  in  the  office  of  the  Secretary  of  State,  and  thereupon  the  charter  of  such 
corporation  shall  be  amended  accordingly  (Laws  of  1903,  chap.  151). 

An  alternative  method  of  decreasing  the  capital  stock  is  provided  for  by 
permitting  the  retiring  or  reducing  of  any  class  of  stock,  or  by  the  surrender 
by  every  stockholder  of  his  shares  and  the  issuance  to  him  in  lieu  thereof  of  a 
decreased  number  of  shares,  or  by  reducing  the  number  of  shares.  If  this 
method  is  adopted,  a  certificate  of  decrease  must  be  published  once  each  week 
for  three  successive  weeks  in  some  newspaper  published  in  the  county  where 
the  principal  office  of  the  corporation  is  located,  the  first  publication  to  be 

334 


DIGEST    OF    INCORPORATION    ACTS.  —  KANSAS. 

made  within  fifteen  days  after  the  filing  of  such  certificate  with  the  Secretary 
of  State.  In  default  of  such  publication  the  directors  of  the  corporation  are 
jointly  and  severally  liable  for  all  debts  of  the  corporation  contracted  after  the 
fifing  of  such  certificate  with  the  Secretary  of  State  before  the  publication  of 
the  same  (Laws  of  1903,  chap.  151). 

25.  Dissolution.  —  The  corporation  may  be  dissolved  either  on  applica- 
tion to  the  court  (sees.  1310,  1312-1315  ;  Laws  of  1907,  chap.  140,  sec.  31) ;  or 
it  may  be  voluntarily  dissolved  by  vote  of  the  stockholders  as  provided  in 
sec.  30  of  chap.  140  of  the  Laws  of  1907.  In  order  that  there  may  be  a 
voluntary  liquidation  the  corporation  must  have  liquidated  its  obligations,  and 
the  resolution  of  the  dissolution  shall  state  that  the  corporation  has  no  outstand- 
ing indebtedness.  Upon  the  filing  of  a  copy  of  such  resolution,  certified  by  the 
president  and  secretary,  in  the  office  of  the  Secretary  of  State,  the  corporation 
shall  cease  to  exist  (Laws  of  1907,  chap.  40,  sec.  30;  Laws  of  1909,  chap.  96). 

Brigham  v.  Nathan,  62  Ivan.  243;  62  Pac.  319;  Jones  v.  Edson,  10  Ivan.  App.  110;  62 
Pac.  249. 

26.  Foreign  Corporations.  —  Every  foreign  corporation  that  has  a  place 
or  places  of  business  within  the  State  of  Kansas  or  distributing  point  therein 
where  it  delivers  its  wares  or  products  to  resident  agents  for  sale,  delivery,  or 
distribution,  shall  be  held  to  be  doing  business  in  the  State  within  the  mean- 
ing of  the  act  governing  foreign  corporations  (Laws  of  1907,  chap.  140,  sec.  28). 
Foreign  corporations  must  apply  to  the  charter  board  for  permission  to  engage 
in  business  in  the  State.  At  the  time  of  such  application  they  shall  pay  an 
application  fee  of  $25,  and  shall  make  application  upon  blank  forms  supplied 
by  the  Secretary  of  State,  and  shall  therein  set  forth  the  following  matters: 
(1)  A  certified  copy  of  its  charter  or  articles  of  incorporation;  (2)  the  place 
where  the  principal  office  of  the  corporation  is  located ;  (3)  the  place  where  the 
principal  place  or  places  of  business  in  Kansas  are  to  be  located ;  (4)  the  full 
nature  and  character  of  the  business  the  corporation  proposes  to  conduct  in 
the  State ;  (5)  the  name  and  address  of  each  of  the  officers,  trustees,  or  directors 
of  the  corporation;  (6)  a  detailed  statement  of  the  assets  and  liabilities  of  the 
corporation,  which  must  be  subscribed  and  sworn  to  by  the  president  and  secre- 
tary of  the  corporation ;  (7)  the  written  consent  of  the  corporation  irrevocable, 
that  actions  may  be  commenced  in  the  proper  court  of  any  county  in  the  State 
in  which  a  cause  of  action  may  arise  or  in  which  the  plaintiff  may  reside,  by 
service  of  process  upon  the  Secretary  of  State.  This  consent  must  be  executed 
by  the  president  and  secretary  of  the  company,  authenticated  by  the  seal  thereof, 
and  be  accompanied  by  a  duly  certified  copy  of  the  resolution  of  the  board  of 
directors  authorizing  the  said  secretary  and  president  to  execute  the  same 
(Laws  of  1907,  chap.  140,  sec.  13).  All  foreign  corporations  must  pay  the  same 
fees  as  are  required  of  domestic  corporations  of  like  capitalization  upon  their 
incorporation  (Laws  of  1907,  chap.  140,  sec.  23). 

Every  foreign  corporation  for  profit  doing  business  in  this  State,  except 
banking,  insurance,  and  railroad  corporations,  shall  file  in  the  office  of  the  Secre- 
tary of  State  during  the  month  of  February  of  each  year  a  statement  of  the 
condition  of  the  corporation  at  the  close  of  business  on  the  :;  1  si  day  of  I  December 
next  preceding  the  day  of  filing.    The  annual  statement  to  be  filed  by  a  foreign 

corporation  shall  set  forth  the  full  corporate  oai >l  such  corporation  ;   the  I" 

cation  of  its  principal  office  or  place  of  business  without  this  State;  the  location 
of  its  principal  office  or  place  of  business  within  this  State,  if  any  it  hi  ;  the 
names  and  addresses  of  its  officers  ami  directors  ;  the  amount  of  its  authorized 


DIGEST    OF    INCORPORATION   ACTS  —  KANSAS. 

capital  stock  and  the  amount  of  each  share ;  the  amount  of  its  capital  stock  sub- 
scribed and  the  amount  and  general  nature  of  its  resources  and  liabilities  in  a 
form  to  be  subscribed  by  the  charter  board.  Such  statement  shall  be  sub- 
scribed and  sworn  to  by  the  president  or  general  manager  and  by  the  secretary 
of  such  corporation,  and  shall  be  made  upon  a  blank  furnished  by  the  Secretary 
of  State.  The  fee  for  filing  such  a  report  and  making  the  certificate  that  the 
same  has  been  made  and  is  on  file  as  aforesaid  shall  be  $1. 

State  v.  Topeka  Water  Co.,  61  Ivan.  547;  60  Pac.  337;  Alliance  Trust  Co.  v.  Wilson, 
9  Ivan.  App.  891;  59  Pac.  177;  S.  C.  L.  S.  C.  Co.  v.  Haston  (Kan.),  75  Pac.  1028;  States. 
American  Book  Co.  (Kan.),  76  Pac.  11;    J.  D.  P.  Co.  v.  Wyland  (Ivan.),  76  Pac.  863. 


336 


DIGEST    OF    INCORPORATION    ACTS. KENTUCKY. 


KENTUCKY. 

(The  references  cited  below  are  to  the  Revised  Statutes  of  1894,  unless  otherwise  stated.) 

1.  Statute  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Kentucky  is  found  in  the  Revised  Statutes, 
1S94,  sees.  538-576,  and  acts  amendatory  thereof.  Under  it  parties  may  in- 
corporate for  transaction  of  any  lawful  business.  There  are  special  provisions 
applicable  to  collection  agencies,  banks,  bankers,  bridge  companies,  building 
and  loan  associations,  insurance,  railroad,  and  real  estate  corporations  (sec.  538. 
As  to  incorporation  of  warehouse  companies,  see  Laws  of  1906,  chap.  145). 

Sayre  v.  Ass'n,  62  Ky.  143. 

2.  Incorporators.  —  Any  number  of  persons  not  less  than  three  may  be 
incorporators.     There  are  no  residential  requirements  (sec.  538). 

Louisville  Bank  Co.  v.  Eisenman,  94  Ky.  83;    31  S.  W.  531. 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  articles  must 
specify  (sec.  539) : 

a.  Name.  —  Similarity  of  names  as  to  existing  domestic  corporations  is 
forbidden.  The  word  "  incorporated "  must  always  follow  the  name  adopted 
(sec.  576). 

b.  Domiciliary  Office.  —  Location  within  the  State  of  the  principal  office  or 
place  of  business  of  the  corporation. 

c.  Purposes.  —  The  nature  of  the  business,  the  objects  or  purposes  proposed 
to  be  carried  on,  promoted,  or  transacted.  This  permits  of  incorporation  for 
more  than  one  purpose. 

d.  Capital  Stock.  — The  amount  of  capital  stock  and  the  number  of  shares 
into  which  the  same  is  divided.  The  capital  stock  may  be  any  amount.  The 
par  value  of  shares  may  be  any  amount.  If  preferred  stock  is  to  lie  issued,  pro- 
vision therefor  must  be  made  in  this  section  (sec.  564  ;  Laws  of  1904,  chap.  105). 

e.  Subscribers  to  Capital  Stock.  —  The  names  and  places  of  residence  of  the 
stockholders  and  the  number  of  shares  subscribed  by  each. 

/.  Duration.  —  The  time  when  the  corporate  existence  commences  and  the 
duration  of  the  same.     This  may  be  unlimited. 

g.  Directors  and  Officers.  —  A  designation  of  the  officers  or  persons  who  are 
to  conduct  the  affairs  of  the  corporation  and  the  time  and  place  at  which  they 
are  to  be  elected.     There  must  be  at  least  three  directors. 

h.  Corporate  Indebtedness.  —  The  highest  amount  of  indebtedness  or  liability 
which  the  corporation  may  at  any  time  incur.     This  may  be  unlimited. 

i.  Stockholders'  Liability. — Statement  as  to  whether  the  private  property 
of  the  stockholders  shall  be  subject  lo  the  payment  of  corporate  debts,  and  if 
so,  to  what  extent  (sec.  539).  l{  desired,  the  mode  of  voluntary  dissolution  may 
be  provided  for  in  the  articles  (see.  561  ). 

Louis  Bletz  &  Co.  v.  Bank,  21  Ky.  Law  Rep  1554;  55  S.  VV.  697;  Thwcalf  v.  Bank,  81 
Ky.  1;   4  Ky.  Law  Rep.  557. 

4.  Statutory  Powers.  —  In  addition  to  the  enumeration  of  the  common 

law  powers  of  corporations,  the  statute  gives  the  corporation  power  t<>  remove 
officers,  to  define  their  duties,  and  to  require  from  any  of  them  a  bond  for  the 
faithful  performance  of  their  duties,   ami  gives   boards  of  directors  power  to 

22  337 


DIGEST    OF    INCORPORATION    ACTS.  —  KENTUCKY. 

adopt  by-laws.  The  statute  forbids  the  purchase  by  the  corporation  of  its  own 
capital  stock  except  to  prevent  loss  upon  debts  previously  contracted,  and  the 
stock  so  purchased  shall  in  no  case  be  held  for  more  than  one  year.  It  also 
permits  corporations  to  consolidate  and  to  issue  preferred  stock.  Also  a  lien 
on  stock  for  debts  due  the  corporation  from  stockholders  may  be  enforced  by 
the  corporation.  Corporations  cannot  hold  any  real  estate,  except  as  may  be 
necessary  for  carrying  on  their  legitimate  business,  for  a  longer  period  than  five 
years.  Power  to  vote  by  proxy,  to  forfeit  stock  for  non-payment  of  assessment, 
to  permit  cumulative  voting,  and  to  classify  directors  is  given  (sees.  542,  543, 
551,  555,  564,  .567;  Laws  of  1902,  chap.  58;  Laws  of  1905,  chap.  105).  Power 
to  adopt  by-laws  is  delegated  to  the  directors  (sec.  542). 

German  Nat.  Bank  v.  K.  T.  Co.,  19  Ky.  Law  Rep.  361;  40  S.  W.  458;  C.  G.  L.  Co.  v.  City 
of  Covington,  22  Ky.  Law  Rep.  796;  58  S.  W.  805;  Phillips  v.  Winslow,  57  Ky.  431 ;  L.  G.  Co. 
v.  Kaufman,  105  Ky.  131 ;  48  S.  W.  434;  Jefferson  v.  Burford,  13  Ky.  Law  Rep.  650;  17  S.  W. 
855;  Price  v.  Company,  17  Ky.  Law  Rep.  865;  32  S.  W.  267;  Shaw  v.  Company,  12  Ky.  Law 
Rep.  799;   15  S.  W.  245. 

5.  Corporate  Indebtedness.  —  There  is  no  limit  to  the  amount  of  indebt- 
edness which  a  corporation  may  incur.  No  bonds  can  be  issued  except  for 
equivalent  in  money  paid,  labor  done,  or  property  actually  received  and  applied 
to  the  purposes  for  which  the  corporation  was  created  (sec.  568 ;  Laws  of  1905, 
chap.  105). 

6.  Procuring  the  Charter.  —  The  articles  of  incorporation  must  be  signed 
and  acknowledged  by  each  of  the  incorporators.  They  must  then  be  recorded 
in  the  county  clerk's  office  of  the  county  in  which  the  principal  place  of  business 
is  to  be  located,  and  a  copy  thereof  filed  and  recorded  in  the  office  of  the  Secre- 
tary of  State  (sees.  540,  542,  570).  Collateral  inquiry  into  the  legality  of  cor- 
porate existence  is  forbidden  (sec.  566). 

Walton  v.  Riley,  85  Ky.  413;  3  S.  W.  605;  P.  &  G.  T.  Co.  v.  Bobb,  88  Ky.  226;  10  S.  W. 
794;  Sims  v.  Commonwealth,  71  S.  W.  929;  24  Ky.  Law  Rep.  1591;  Wight  v.  Company, 
55  Ky.  4;  Gill  v.  Company,  70  Ky.  635. 

7.  Organization  Tax.  —  An  organization  tax  amounting  to  one-tenth  of 
one  per  cent  on  the  amount  of  authorized  capital  stock  and  a  like  tax  upon  any 
subsequent  increase  thereof  is  exacted  (Acts  of  1906,  p.  22;  Art.  XIII.  par.  1). 

8.  Filing  and  Recording  Fees.  —  The  recording  fee  in  the  office  of  the 
Secretary  of  State  is  25  cents  per  folio  of  one  hundred  words  (Laws  of  1906, 
chap.  2).  No  charge  is  made  for  issuing  the  certificate  of  incorporation.  The 
fee  for  certified  copy  of  certificate  of  incorporation  is  25  cents  per  page  for  copy- 
ing and  $2  for  certificate  under  seal.  For  recording  appointment  of  agent  upon 
whom  process  may  be  served  in  the  case  of  foreign  corporations  a  fee  of  50  cents 
is  charged.  Recording  fees  in  local  county  office  for  articles  averaging  one 
thousand  words  in  length  is  $3,  which  includes  cost  of  certified  copy  for  filing 
in  the  office  of  the  Secretary  of  State.  The  county  clerk  is  entitled  to  charge 
25  cents  per  folio  of  one  hundred  words  for  recording  certificate  of  incorporation. 

9.  Commencing  Business.  —  Corporations  in  order  to  transact  any  busi- 
ness with  persons  other  than  the  stockholders  must  procure  subscriptions  in 
good  faith  for  at  least  fifty  per  cent  of  the  authorized  capital  stock.  When 
this  has  been  done,  the  corporation  may  commence  the  transaction  of  its  busi- 
ness. Such  business  must  be  commenced  within  two  years  after  organization 
(sees.  543,  565).  Before  commencing  business  the  corporation  must  file  in  the 
office  of  the  Secretary  of  State  a  statement,  signed  by  its  president  or  secretary, 
giving  the  location  of  its  office  or  offices  within  the  State,  and  the  name  or  names 
of  its  agent  upon  whom  process  may  be  served  (sec.  571). 

338 


DIGEST    OF    INCORPORATION    ACTS. — KENTUCKY. 

10.  Organization  Meeting.  —  Organization  meeting  must  be  held  within 
the  State,  in  the  absence  of  any  statute  providing  otherwise. 

11.  Meetings  of  Stockholders  and  Directors.  — All  meetings  of  stock- 
holders must  be  held  within  the  State.  Directors'  meetings  may  be  held  with- 
out the  State  if  the  by-laws  so  provide  (sec.  551). 

P.  C.  Co.  v.  Finley,  98  Ky.  405;  33  S.  W.  188;  Schmidt  v.  Mitchell.  101  Kv  370-  41 
S.  W.  929;  Vaught  v.  Company,  49  S.  \Y.  426;   20  Ky.  Law  Rep.  1471.  '  '  ' 

12.  Directors'  Qualifications  and  Liabilities.  a.  Qualifications.  — 
There  must  be  at  least  three  directors,  each  of  whom  must  own  in  his  own 
right  not  less  than  three  shares  of  stock.  There  are  no  residential  requirements. 
Directors  may  be  classified,  if  desired.  They  must  also  adopt  by-laws  (sees.  5  12, 
551).     Cumulative  voting  for  directors  is  authorized  (sec.  552;  Cons.,  sec.  1207). 

Schmidt  v.  Mitchell,  101  Ky.  570. 

b.  Liabilities.  —  Directors  are  jointly  and  severally  liable  for  the  declara- 
tion and  payment  of  dividends  when  the  corporation  is  insolvent  or  the  dec- 
laration or  payment  of  which  renders  it  insolvent  or  which  diminishes  the 
amount  of  its  capital  stock.  They  are  also  jointly  and  severally  liable  for  know- 
ingly causing  to  be  published  or  given  out  any  false  statement  or  report  of 
the  condition  of  the  corporate  business,  or  for  failing  or  refusing  to  comply 
with,  or  for  violation  of,  any  provision  of  the  Business  Corporation  Act  appli- 
cable to  them  (sees.  548-550  inclusive). 

Prewitt  v.  Trimble,  92  Ky.  176;  17  S.  W.  356;  Kruse  v.  Humpert,  21  Kv.  Law  Rep. 
985;  53  S.  W.  657;  Dudley  v.  Price,  49  Ky.  84;  O'Neal  v.  Company  (Kv.),  SO  S.  W.  451; 
25  Ky.  Law  Rep.  2279;  Schmidt  v.  Mitchell,  98  Ky.  218;  32  S.  W.  599;  33  S.  W.  408;  C.  C. 
Co.  v.  Bate,  96  Ky.  356;  26  S.  W.  538;  Dietrich  v.  Rottenberger,  25  Ky.  Law  Rep.  338;  7ft 
S.  W.  271;  Cornwall  v.  Eastham,  65  Ky.  561;  Brannin  v.  Loring,  82  Ky.  370;  6  Ky.  Law 
Rep.  328;    Guentter  v.  Company,  107  Ky.  44;    52  S.  W.  931. 

13.  Stockholders'  Liabilities. — *  Stockholders  in  ordinary  business  cor- 
porations are  liable  only  for  their  unpaid  stock  subscriptions  (sec.  547 ;  Laws  of 
1902,  chap.  10). 

Cincinnati  Cooperage  Co.  v.  Bate,  16  Ky.  Law  Rep.  626;  26  S.  W.  538;  Senn  v.  Levy. 
23  Ky.  Law  Rep.  662,  1331;  63  S.  W.  776. 

14.  Stock  Certificates.  —  Every  shareholder  is  entitled  to  have  a  stock 
certificate  issued  to  him,  signed  by  such  officers  as  may  be  designated  in  the 
by-laws  (Laws  of  1904,  chap.  105). 

15.  Preferred  Stock.  —  Any  corporation  organized  under  this  law  may 
divide  its  shares  into  classes,  such  as  preferred  and  common  shares,  or  as  may 
be  otherwise  designated,  and  it  may  give  to  each  of  the  several  (lasses  such 
priority  of  right  in  the  payment  of  dividends  and  in  the  redemption  of  shares 
as  may  be  prescribed  under  the  rules  and  regulations  adopted  by  the  share- 
holders, and  may  provide  that  the  holders  of  its  bonds  shall  be  entitled  upon 
terms  prescribed  by  it,  to  convert-  the  same  into  the  slock  of  the  corporation, 
whether  common  or  preferred,  and  that  the  holders  of  its  preferred  stock  shall 
be  entitled,  upon  terms  prescribed  by  it,  to  convert  the  same  into  the  bonds  or 
other  obligations  of  the  corporation.  No  preferred  stock  shall  be  issued  except 
for  cash  or  its  equivalent,  nor  for  less  than  the  par  value  of  the  shares  which 
shall  be  stated  in  the  certificates  representing  the  preferred  and  common  Btock 
respectively  (Laws  of  1910,  chap.  79).  Alter  incorporation,  the  corporation 
may,  by  a  vote  of  two-thirds  in  amount  of  the  outstanding  capital  Btock  cast  al 

a  special  meeting  of  the  stockholders  called  for  that  purpose  and  of  which  notice 
shall  have  been  given  as  provided  in  the  by-laws  of  the  company  at  [east  twenty 

:;:;'.i 


DIGEST    OF    INCORPORATION    ACTS.  —  KENTUCKY. 

days  before  the  date  of  such  meeting,  or  at  the  annual  meeting  of  the  stock- 
holders, or  by  the  written  consent  of  the  holders  of  not  less  than  two-thirds  in 
amount  of  the  capital  stock,  distribute  or  convert  its  outstanding  capital  stock 
into  preferred  and  common  stock  in  such  proportion  as  may  be  desired,  pro- 
vided that  all  holders  of  stock  at  the  time  of  distribution  shall  be  entitled  to 
the  same  pro  rata  proportion  of  such  preferred  and  common  stock.  Preferred 
stock  may  be  made  convertible  into  the  bonds  of  the  company,  if  desired  (sees. 
564,  771;    Laws  of  1904,  chap.  105;   Laws  of  1910,  chap.  79). 

16.  Payment  of  Capital  Stock.  —  Stock  can  be  issued  only  for  money 
paid,  labor  done,  or  property  actually  received  and  applied  to  the  purposes  for 
which  the  corporation  was  created.  No  labor  nor  property  shall  be  received 
in  payment  of  stock  at  a  greater  value  than  the  market  price  at  the  time  the 
labor  was  done  or  the  property  delivered.  All  fictitious  increases  of  stock  shall 
be  void  (sec.  568;   Cons.,  sec.  193). 

Mercer  v.  Company,  18  Ky.  Law  Rep.  985;  38  S.  W.  841;  J.  R.  P.  L.  Co.  v.  Cooke,  103 
Ky.  96;  44  S.  W.  391;    Bush  v.  Robinson,  95  Ky.  492;    26  S.  W.  178. 

17.  Books.  —  A  book  containing  the  name  and  post-office  address,  the 
numbers  of  shares  held  by  each  stockholder,  and  the  time  when  such  person 
became  a  stockholder,  must  be  kept.  Also  a  stock  transfer  book  must  be  kept 
at  the  principal  office  of  the -corporation  within  the  State  (sec.  546).  This  is 
open  to  the  inspection  of  stockholders  and  creditors. 

18.  Office  and  Agent.  —  Every  corporation  must  maintain  an  office  within 
the  State  and  have  an  authorized  agent  therein  upon  whom  process  may  be 
served.  The  designation  of  such  agent  must  be  filed  in  the  office  of  the  Secretary 
of  State,  by  certificate  signed  by  the  president  or  secretary  giving  location  of  the 
office  of  the  company  in  the  State,  and  the  name  of  the  agent  upon  whom  process 
may  be  served  (sec.  571  ;  Cons.,  sec.  194). 

Standard  Oil  Co.  v.  Commonwealth,  23  Ky.  Law  Rep.  302;    62  S.  W.  897. 

19.  Reports.  —  See  section  21,  post. 

20.  Anti-Trust  Statute.  —  There  is  an  anti-trust  statute  in  force  directed 
against  illegal  combinations,  pools,  and  trusts  (Cons.,  sec.  198;  R.  S.,  sees.  3915- 
3921  inclusive). 

21.  Annual  License  Tax.  —  An  annual  franchise  tax  based  upon  the 
amount  of  the  authorized  capital  stock  of  the  corporation  is  imposed  as  follows : 
Domestic  and  foreign  corporations  shall  pay  an  annual  franchise  tax  of  30  cents 
on  each  $1,000  of  that  part  of  their  authorized  capital  stock  represented  by 
property  owned  and  business  transacted  in  this  State  which  shall  be  ascer- 
tained by  finding  the  proportion  that  the  property  owned  and  business  trans- 
acted bears  to  the  aggregate  amount  of  property  owned  and  business  transacted 
in  and  out  of  the  State:  Provided,  that  such  corporations  may  pay  at  such  rate 
upon  their  entire  authorized  capital  stock,  and  in  that  event  they  shall  not  be 
required  to  report  as  to  their  property  and  business  as  provided  in  the  other 
sections  of  the  act.  Domestic  corporations  are  not  required  to  pay  the  annual 
license  tax  for  the  year  in  which  they  may  organize. 

On  or  before  the  15th  day  of  December  of  each  year  the  Auditor  of  Public 
Accounts  is  required  to  furnish  to  all  corporations  a  blank  upon  which  to  make 
the  report  which  is  to  serve  as  the  basis  for  the  imposition  of  the  annual  license 
tax.  This  report,  verified  by  the  affidavit  of  the  president  or  secretary  of  the 
corporation,  must  be  filed  with  the  Auditor  of  Public  Accounts  on  or  before  the 
1st  day  of  February  of  each  year.     Upon  this  report  the  Board  of  Assessment 

340 


DIGEST    OF    INCORPORATION    AC  IS.  —  KENTUCKY. 

and  Valuation  ascertains  and  fixes  that  part  of  the  authorized  capital  stock  of 
the  corporation  upon  which  the  license  tax  shall  be  based.  As  soon  as  the 
amount  is  arrived  at,  the  Auditor  of  Public  Accounts  is  required  to  notify  each 
corporation  of  the  amount  so  assessed  against  it  by  the  Hoard.  The  corporation 
is  required  to  pay  the  tax  to  the  Auditor  of  Public  Accounts  not  later  than  thirty 
days  after  notification  to  the  corporation  of  its  tax.  The  report  required  by 
this  act  must  show  the  following  tacts  : 

Name  of  such  corporation  ;  the  name  of  the  State  or  government  under  the 
laws  of  which  it  is  incorporated  ;  the  date  of  incorporation:  the  place  of  its  prin- 
cipal office  in  and  out  of  tliis  Commonwealth  ;  the  name  and  post-office  address 
of  its  president  and  secretary;  the  name  and  post-office  address  of  its  author- 
ized agent  or  attorney  upon  whom  process  may  be  executed,  as  provided  by 
law.  and  the  name  and  address  of  its  officer  or  agent  in  charge  of  its  bush 
in  this  State;  total  amount  of  its  authorized  capital  stock;  t ho  value  of  the 
property  owned  and  used  by  the  company  in  Kentucky,  where  situated,  and 
the  value  of  the  property  owned  and  used  by  the  company  outside  of  Ken- 
tucky; aggregate  amount  of  business  transacted  by  said  company  during  the 
preceding  year  ending  the  31st  day  of  December,  and  the  proportion  of  such 
business  transacted  in  this  State  ;  and  state  such  other  facts  bearing  on  this 
matter  as  the  Board  of  Valuation  and  Assessment  may  require.  The  minimum 
annual  license  tax  is  fixed  at  $10  (Laws  of  1906,. chap.  22). 

22.  Extension  of  Corporate  Existence. — There  is  no  statutory  pro- 
vision therefor. 

23.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Every  charter 
is  liable  to  be  forfeited  by  suit  brought  for  that  purpose  by  the  State  for 
failing  to  comply  with  any  requirement  or  provision  of  its  charter,  or  for 
any  abuse  or  misuse  of  its  corporate  powers,  and  shall  have  thereby  become 
detrimental  to  the  internal  welfare  of  the  State.  The  charter  is  liable  to  for- 
feiture for  failure  to  commence  business  within  two  years  after  its  organiza- 
tion, for  entering  into  illegal  trusts,  combinations,  and  pools,  or  for  giving 
money  to  fix  the  result  of  any  election  (sees.  565,  569,  1574  a,  1987,  3919; 
Cons.,  sec.  205). 

S.  E.  Co.  v.  Commonwealth,  21  Ky.  Law  Rep.  1556;  55  S.  W.  684. 

24.  Amendments.  —  By  consent  in  writing  of  owners  of  two-thirds  of 
capital  stock,  the  articles  of  incorporation  may  be  amended  for  any  purpose, 
said  alteration  or  amendment  to  be  signed  and  acknowledged  by  the  directors. 
or  a  majority  of  them,  and  filed  and  recorded  as  articles  of  incorporation  are 
required  to  be  filed  in  the  first  instance  (sees.  559,  574).  Under  Acts  of  1904, 
chap.  105,  special  provision  is  made  for  increasing  the  capital  stock.  The  pro- 
cedure therein  outlined  is  as  follows  :  Any  business  corporation  may,  by  a  resolu- 
tion adopted  by  a  vote  of  holders  of  not  less  than  two-thirds  in  amount  of  its 
outstanding  capital  stock,  passed  in  person  or  by  proxy,  at  a  special  meeting 
of  stockholders  called  for  that  purpose,  and  of  which  notice  shall  have  been 
given  as  provided  in  the  by-laws  of  the  company,  at  least  twenty  days  before 
the  date  of  the  meeting  or  at  the  annual  meeting  of  the  stockholders  of  the 
company,  or  by  written  consent  of  the  holders  of  not  less  than  two-thirds  in 
amount  of  its  capital  stock,  increase  its  capital  stock  in  such  manner  as  maj  I"' 
deemed  desirable  (Laws  of  1910,  chap.  79). 

Senn  v.  Levy,  111  Ky.  318;  63  8.  W.  770;  Cin.  Coop.  Co.  v.  Bate,  96  Ky.  366;  26  8.  W. 
538;    14  Ky.  Law  Rep.  469. 

::il 


DIGEST    OF    INCORPORATION    ACTS. KENTUCKY. 

25.  Dissolution.  —  Any  corporation  may,  by  consent  in  writing  of  the 

owners  of  a  majority  of  its  stock,  close  its  business  and  wind  up  its  affairs  (sec. 

561). 

Williams  v.  Nail,  108  Ky.  21;  55  S.  W.  706;  L.  G.  Co.  v.  Kaufman,  105  Ky.  131;  48 
S  W  434;  G.  T.  S.  Co.  v.  Taylor  &  Sons,  113  Ky.  709;  68  S.  W.  862;  Bank  v.  Trimble,  45 
Ky.  599;  E.  B.  &  L.  Ass'n  v.  Company,  113  Ky.  246;  68  S.  W.  21. 

26.  Foreign  Corporations.  —  The  only  requirements  necessary  to  be  com- 
plied with  in  order  to  transact  business  within  the  State  on  the  part  of  foreign 
corporations  is  the  designation  of  an  agent  upon  whom  process  may  be  served, 
:and  a  declaration  of  the  name  of  such  agent  and  the  domicile  of  the  corporation, 
by  filing  same  with  the  Secretary  of  State  (Act  1890,  p.  188;  see  also  Cons.,  sec. 
u202 ;  Laws  of  1904,  chap.  69).  Foreign  corporations  must  pay  the  same  annual 
license  tax  as  is  imposed  upon  domestic  corporations  (see  ante,  sec.  21 ;  Acts  of 
1906,  chap.  22;  Art.  XL  pars.  3-9). 

Commonwealth  v.  Read  Phosphate  Co.,  23  Ky.  Law  Rep.  2284;  67  S.  W.  45;  Aultman 
Taylor  Co.  v.  Mead,  22  Kv.  Law  Rep.  1189;  60  S.  W.  294;  Phoenix  Ins.  Co.  v  Common- 
wealth, 68  Ky.  68;  Commonwealth  v.  P.  &  O.  Co.,  26  Ky.  Law  Rep.  58;  80  S.  W.  791;  C. 
T.  &  T.  Co.  v.  L.  H.  L.  Co.,  24  Ky.  Law  Rep.  1676;  72  S.  W.  4. 


342 


DIGEST    OF    INCORPORATION    ACTS.  —  LOUISIANA. 


LOUISIANA. 

{The  references  cited  below  are  to  Wolff's  Revised  Statutes  of  1904,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Louisiana  is  found  in  the  Revised  Statutes 
of  that  State,  1904,  sees.  683-741;  see  also  Civ.  Code  of  Louisiana,  1870,  Bees. 
427-147.  (See  Laws  of  1902,  Acts  53,  154  ;  Laws  of  1904,  Act  78.)  Special  ads 
are  provided  for  banking,  building  and  loan,  canal,  insurance,  railway,  safe 
deposit  and  trust,  street  railway,  surety,  telegraph,  and  telephone  companies. 
Incorporation  for  stock-jobbing  business  is  expressly  forbidden  (sec.  683;  Laws 
■of  1S88,  Act  36).  At  the  present  time  practically  all  business  corporations 
formed  within  the  State  are  incorporated  under  Act  No.  78  of  the  Louisiana 
Sessions  Laws  of  1904.  This  act  permits  incorporation  for  any  purpose  except 
that  of  insurance  and  banking,  or  the  carrying  on  of  any  business  entitling  the 
corporation  to  exercise  the  right  of  eminent  domain. 

2.  Incorporators.  —  Under  Act  78,  Laws  of  1904,  but  three  incorporators 
are  required.  There  are  no  residential  requirements.  (See,  however,  sec.  6S3 ; 
Laws  of  1882,  Act  111 ;  Laws  of  1902,  Act  154.) 

Ross  v.  Crockett,  14  La.  Ann.  811;  Board  of  Trustees,  etc.  v.  Campbell,  48  La.  Ann. 
1543;  21  Sou.  184. 

3.  Contents  of  the  Charter  (sec.  685).  —  The  charter  must  contain : 

a.  Name.  —  A  corporation  organized  under  "Limited  Liability  Act"  must 
have  the  word  "limited"  in  its  name.    Similarity  of  names  is  not  forbidden. 

6.  Domiciliary  Office.  —  The  location  of  the  principal  office  or  place  of  busi- 
ness within  the  State. 

c.  Purposes.  —  Corporations  may  be  organized  for  more  than  one  purpose 
if  none  of  these  are  within  those  classes  for  which  special  acts  are  provided,  and 
if  the  corporation  has  a  subscribed  capital  of  $3,000  or  over  (Laws  of  1904, 
Act  78). 

d.  Service  of  Process.  —  An  officer  must  be  designated  upon  whom  process 
may  be  served. 

e.  Capital  Stock.  —  Amount  of  capital  stock,  number  of  shares,  par  value 
of  same,  time  when  and  manner  in  which  payment  thereof  shall  be  made.  The 
subscribed  capital  stock  of  all  companies  incorporated  under  Act  78,  Laws  of 
1904,  must  be  not  less  than  $3,000.  The  par  value  of  the  shares  may  be  any 
amount. 

/.  Election  of  Directors.  —  The  mode  in  which  the  election  of  directors  shall 
be  conducted. 

g.  Dissolution.  —  The  mode  of  liquidation  at  the  termination  of  the  charter 
(sec.  685). 

The  duration  of  charters  is  ninety-nine  years  (sec.  684). 

L.  N.  &  F.  Co.  v.  Doullet  (La.),  38  Sou.  613. 

4.  Statutory  Powers.  —  The  statute  enumerates  the  implied  common  law 
powers  of  corporations,  and  also  confers  the  following  additional  powers:  Busi- 
ness and  manufacturing  corporations  whose  objects  are  of  the  same  general 
nature  may  consolidate.     The  right  to  receive  legacies  and  donations  is  a  I  o 

343 


DIGEST    OF    INCORPORATION    ACTS.  —  LOUISIANA. 

given  (sees.  684;  Laws  of  1874,  Act  approved  Dec.  12;    see  also  Cons.,  1898, 
sec.  265). 

5.  Corporate  Indebtedness.  —  Railway,  plank  road,  turnpike,  canal, 
warehouse,  drainage,  sewage,  land  reclaimer,  levee  building,  waterworks,  electric 
lighting  and  power,  bridge,  mills  and  refineries,  saw-mills,  rice-mills,  cotton- 
oil  mills,  erecting  companies,  ship-building  and  dock  corporations,  may  borrow 
money  and  issue  bonds  and  mortgage  their  properties  and  franchises  under  such 
terms  as  the  directors  may  direct  or  deem  expedient  (Laws  of  1902,  Act  30  ;  see 
also  Laws  of  1902,  Act  121).  If  desired,  corporate  bonds  may  be  converted  into 
stock  within  ten  years  from  their  date  (R.  L.  of  1904,  p.  236). 

6.  Procuring  the  Charter.  —  The  articles  must  be  signed  and  acknowl- 
edged before  a  notary.  Charters  for  commercial  and  manufacturing  corpora- 
tions must  be  recorded  in  the  office  of  the  recorder  of  mortgages  of  the  parish 
of  their  domicile,  together  with  a  list  of  subscriptions  to  their  stock.  Such 
charters  must  also  be  published  in  some  daily  newspaper  within  the  parish  of 
the  domicile  five  times  within  thirty  days.  It  is  not  necessary  to  publish  the 
list  of  subscribers.  A  duly  certified  copy  of  the  charter,  taken  either  from  the 
record  of  the  notary  before  whom  the  act  was  passed,  or  from  the  record  thereof 
in  the  office  of  the  recorder  in  whose  office  said  charter  shall  have  been  recorded, 
must  be  filed  in  the  office  of  the  Secretary  of  State.  To  this  copy  must  be 
affixed  the  certificate  of  the  recorder,  attesting  recordation  of  the  act  in  his 
office,  etc. ;  also  a  copy  of  one  issue  of  the  newspaper  wherein  the  said  charter 
shall  have  been  published,  together  with  the  affidavit  of  publication  (sees.  677, 
686;  Laws  of  1898,  Act  59). 

7.  Organization  Tax.  — There  is  no  organization  tax,  properly  speaking. 
The  principal  expense  involved  is  the  fee  to  the  notary  for  drawing  the  charter. 
His  fees  range  from  $25  up,  the  same  being  regulated  by  the  length  of  the  charter 
and  the  amount  of  the  capital  stock. 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State  for  recording 
charter,  25  cents  per  hundred  words;  for  certificate  of  recordation,  $1 ;  for 
certified  copy  of  charter,  $1 ;  for  filing  and  recording  amendments  to  charter, 
25  cents  per  hundred  words;  for  recording  charter  in  local  parish,  recording 
fees,  15  cents  per  hundred  words. 

9.  Commencing  Business.  —  Corporations  may  begin  business  immedi- 
ately after  the  first  publication  of  the  charter.  Under  Act  78,  Laws  of  1904,  at 
least  $3,000  of  the  capital  stock  must  be  subscribed  for  in  order  to  entitle  the 
corporation  to  begin  business. 

Globe  Realty  Co.  v.  Whitney,  106  La.  Ann.  257;  30  Sou.  745. 

10.  Organization  Meeting.  —  In  the  absence  of  any  statute  providing 
otherwise,  the  organization  meeting  must  be  held  within  the  State  (sec.  741). 

11.  Meetings  of  Stockholders  and  Directors.  —  All  meetings,  whether 
of  stockholders,  directors,  or  officers,  must  be  held  at  the  domicile  of  the  cor- 
poration within  the  State.  The  law  provides  that  any  such  meeting  held  else- 
where and  any  business  transacted  thereat  shall  be  unlawful  and  of  no  effect 
(sec.  741,  as  amended  by  Laws  of  1910,  Act  63). 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualifications.  —  The 
statute  does  not  provide  any  specific  number  of  directors,  neither  are  there  any 
residential  requirements  (sec.  684). 

b.  Liabilities.  —  Directors  are  liable  for  any  resulting  damage  or  indebted- 
ness arising  from  the  omission  of  the  word  "limited"  from  the  corporate  name 

344 


DIGEST    OF    INCORPORATION    ACTS.  —  LOUISIANA. 

(R.  L.  of  1904,  p.  243).  They  are  also  liable  to  fine  and  imprisonment  for  viola- 
tion of  anti-trust  laws  (R.  S.,  1904,  pp.  1S04-1S06).  Officers  are  also  liable 
for  refusal  to  allow  examination  of  books.  (See  Bourdette  v.  Sieward,  107 
La.  258.) 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  unpaid  bal- 
ance due  the  company  on  shares  owned  by  them.  The  statute  specifically  pro- 
vides that  no  mere  informality  in  organization  shall  have  the  effect  of  exposing 
a  stockholder  to  any  liability  for  unpaid  balance  due  on  his  stock.  The  statute 
also  provides  that  the  word  "limited"  shall  be  the  last  word  of  the  name  of 
every  corporation.  The  act  further  provides  that  the  omission  of  the  word 
"limited"  in  the  use  of  the  name  of  the  corporation  shall  render  it.  and  every 
person  participating  in  such  omission  or  knowingly  acquiescing  therein,  liable 
for  any  indebtedness,  damage,  or  liability  arising  therefrom  (sec.  690 ;  Laws  of 
1888,  Act  36). 

14.  Stock  Certificates.  —  Every1  stockholder  is  entitled  to  have  a  certifi- 
cate issued  to  him  signed  by  such  officers  as  may  be  designated  in  the  by-laws. 

15.  Preferred  Stock.  — There  is  no  statutory  authorization  for  the  issu- 
ance of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  under  the-  con- 
stitution for  labor  done  or  money  or  property  actually  received.  All  fictitious 
issues  of  stock  are  declared  void  (Cons.,  Art.  266). 

17.  Books.  — The  corporation  is  required  to  keep  a  stock  transfer  book  at 
its  domicile  within  the  State.  This  book  must  be  kept  open  for  public  inspec- 
tion (Cons.,  Art.  273). 

Legendre  v.  Association,  45  La.  Ann.  669:  12  Sou.  837;  Bourdette  v.  Sieward,  107  La. 
Ann.  258;    31  Sou.  630. 

18.  Office.  —  Every  corporation  is  required  to  keep  a  public  office  or  place 
of  business  within  the  State  for  the  transaction  of  business  (Cons.,  Arts.  264,  273  ; 
R.  S.  sec.  740).  The  corporate  name  must  be  displayed  on  its  office  or  place 
of  business  and  stationery  (Cons.,  Art.  273;   R.  S.  1904,  p.  243). 

19.  Reports.  — The  president,  cashier,  secretary,  or  agent  of  every  stock 
corporation  must,  on  or  before  the  1st  day  of  March  in  each  year,  make  and 
deliver  to  the  State  collectors  or  assessors  of  the  parish  in  which  such  company 
is  liable  to  be  taxed  a  written  statement  under  oath  specifying:  First,  the  real 
estate,  if  any,  owned  by  such  company  when  the  same  is  located  in  this  State ; 
second,  the  capital  stock  actually  paid  in  and  not  invested  in  real  estate  ;  third, 
the  place  of  its  principal  business  or  where  its  principal  operations  are  carried 
on  in  which  it  is  liable  to  be  taxed  (sec.  736;  see  also  Laws  of  1898,  Act  170). 
For  the  purpose  of  taxation,  the  parish  assessors  within  the  county  where  the 
corporation  has  either  real  or  personal  property  must  be  furnished  by  every 
domestic  corporation  with  a  sworn  statement  of  its  condition.  This  statement 
of  condition  must  be  made  next  preceding  the  day  of  listing,  and  must  be  made 
within  the  first  twenty  days  of  January  of  each  year.  The  statement  must 
include  the  cost  of  the  corporation's  property,  real  and  personal,  and  the  value 
at  which  the  same  is  carried  in  the  books.  It  must  include  also  a  statement  of 
the  earning  capacity  of  the  corporation,  which  earning  capacity  shall  form  the 
basis  of  estimate  and  value  of  its  charter  or  franchises  (Arts  of  1906,  Act  66). 

20.  Anti-Trust  Statute. — There  is  a  constitutional  prohibition  forbid- 
ding corporations  to  combine  or  conspire  together  for  the  purpose  of  forcing  up 
or  down  the  price  of  any  agricultural  product  or  article  of  necessity  for  specula- 
tive purposes  (Cons.,  Art.  190).     Under  the  Act  of  July  7,  1892,  this  consti- 

345 


DIGEST    OF    INCORPORATION    ACTS.  —  LOUISIANA. 

tutional  provision  is  put  in  force  in  the  form  of  an  express  anti-trust  statute 
(Laws  of  1892,  Act  90;  Laws  of  1908,  Act  12S). 
State  v.  Company,  109  La.  64. 

21.  Annual  License  Tax.  —  There  is  no  annual  license  tax,  properly 
speaking,  in  existence  in  Louisiana.  A  license  tax  is  imposed,  however,  on 
gross  receipts  of  certain  designated  lines  of  business,  whether  carried  on  by 
individuals  or  corporations  (pp.  1674-1723   inclusive). 

22.  Extension  of  Corporate  Existence. — There  is  no  statutory  pro- 
vision therefor. 

23.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  for  fictitious  issues  of  stock,  for  violation  of  the  Anti-Trust  Act  and 
for  insolvency  (Laws  of  1902,  Act  224 ;  see  also  Cons.,  Art.  266,  and  R.  S.,  sec 
731).     Also  for  illegal  payment  of  dividends  (Laws  of  190S,  Act  241). 

La.  Savings  Bank,  35  La.  Ann.  196;    State  v.  Company,  111  La.  1049. 

24.  Amendments.  — The  law  provides  that  stockholders  of  any  corpora- 
tion, at  a  general  meeting  convened  for  that  purpose,  may  make  any  alterations, 
additions,  or  changes  in  their  charter  with  the  assent  of  three-fourths  of  the 
stockholders  represented  at  said  meeting.  Such  amendments  as  are  adopted 
to  be  recorded  as  in  the  case  of  original  charters.  Special  provision  is  made 
in  the  case  of  increase  or  decrease  in  the  capital  stock.  To  effect  such  a  change, 
directors  of  the  corporation  must  publish  a  notice,  for  thirty  days  preceding 
the  time  fixed  for  such  meeting,  that  a  meeting  of  the  stockholders  will  be  held 
at  the  office  of  the  corporation  for  the  purpose  of  deciding  upon  such  increase 
or  decrease,  and  shall  also  deposit  a  written  or  printed  copy  of  such  notice  in 
the  post-office,  prepaid,  addressed  to  each  stockholder  at  his  usual  place  of  resi- 
dence at  least  forty  days  before  the  date  fixed  for  such  meeting.  At  the  meet- 
ing, when  held,  stockholders  being  present  either  in  person  or  by  proxy  holding 
an  amount  not  less  than  two-thirds  in  value  of  the  stock,  a  vote  may  be  taken 
thereat  upon  the  proposed  increase  or  decrease  of  the  capital  stock.  If  stock- 
holders holding  not  less  than  two-thirds  of  the  stock  of  the  corporation  have 
voted  in  favor  of  the  proposed  increase  or  decrease  of  stock,  a  certificate  of  the 
proceedings  shall  be  made,  showing  compliance  with  the  provisions  of  law,  the 
amount  of  the  capital  stock  at  the  time  such  vote  was  taken,  and  the  number 
of  holders  thereof,  the  amount  and  number  of  shares  to  which  it  was  proposed 
and  carried  to  increase  or  decrease,  the  amount  and  number  of  shares  whose 
holders  have  voted  against  such  change,  and  the  whole  amount  of  the  debts 
and  liabilities  of  such  corporation.  The  said  certificate  shall  be  signed  by  the 
chairman  and  secretary  of  the  stockholders'  meeting  and  shall  be  verified  by 
their  affidavits,  and  then  filed  in  the  office  of  the  Secretary  of  State  (sec.  687 ; 
Laws  of  1882,  Act  26 ;   Laws  of  1898,  Act  of  July  14  of  that  year). 

In  making  amendments  to  charters,  it  is  necessary  that  the  same  be  published 
and  recorded  in  the  same  manner  as  the  original  charter. 

25.  Dissolution.  —  Corporations  may  be  dissolved  by  vote  of  three-fourths 
of  the  stockholders  represented  at  any  meeting  called  for  that  purpose  (Civ. 
Code,  Art.  447 ;  R.  S.,  sec.  688 ;  Laws  of  1902,  Act  224). 

Curie  v.  Santini,  16  La.  Ann.  27. 

26.  Foreign  Corporations.  —  All  foreign  corporations  doing  business 
within  the  State  must  file  in  the  office  of  the  Secretary  of  State  a  written  decla- 
ration setting  forth  the  place  or  locality  of  its  domicile  or  place  in  the  State 

346 


DIGEST    OF    INCORPORATION    ACTS.  —  LOUISIANA. 

where  it  is  doing  business,  the  place  of  its  principal  business  establishment, 
and  the  name  of  an  agent  within  the  State  upon  whom  process  may  be  served 
(Laws  of  1904,  Act  54;  Laws  of  190S,  Act  284).  Tor  filing,  recording,  and 
furnishing  certified  copy  of  power  of  attorney  appointing  an  agent  for  a  foreign 
corporation,  the  Secretary  of  State  charges  S3. 50.  They  are  also  required  to 
file  the  same  annual  reports  as  are  exacted  of  domestic  corporations  (sec.  736 ; 
Laws  of  1898,  Act  170).  Under  the  Laws  of  1898,  Act  127,  an  annual  license 
tax  is  authorized  to  be  levied  upon  certain  classes  of  corporations  doing  busi- 
ness within  the  State  whose  domiciles  are  in  other  States  or  foreign  countries. 
This  act  is  not  general,  but  only  applies  to  such  corporations  as  are  especially 
named  in  the  act.  The  constitutionality  of  tins  statutory  enactment  is  ques- 
tioned on  the  ground  of  lack  of  uniformity.  (See  Cons.,  Art.  242 ;  see  generally 
Laws  of  1908,  Acts  128,  241.) 

State  ex  rel  Watkins  ».  Company,  106  La.  Ann.  621;  31  Sou.  172;  State  v.  Southern 
Pacific  Co.,  52  La.  Ann.  1822;  28  So.  372;  Milwaukee  Trust  Co.  v.  Insurance  Co..  106  La. 
Ann.  669;  31  Sou.  298;  New  Orleans  v.  Insurance  Co.,  106  La.  Ann.  31;  30  Sou.  254. 


347 


DIGEST    OF    INCORPORATION    ACTS.  —  MAINE. 


MAINE. 

(The  references  cited  below  are  to  the  Revised  Statutes  of  1904,  chap.  47,  unless  otherwise 
stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 

Business  corporations  are  organized  under  the  provisions  of  chap.  47  of  the 
Revised  Statutes  of  1904.  Special  acts  are  provided  for  banks,  gas  and  electric 
companies,  navigation,  railway,  insurance,  and  trust  companies,  telegraph 
and  telephone,  water  and  aqueduct  corporations.  Corporations  may,  how- 
ever, be  formed  for  the  construction  and  operation  of  railways  without  the 
State ;  also  telegraph  and  telephone  companies,  gas  and  electrical  companies, 
with  the  same  limitations  (sec.  6). 

2.  Incorporators.  — Any  number  of  persons  not  less  than  three  may  in- 
corporate.    There  are  no  specific  residential  requirements  (sec.  6). 

Ulmer  v.  Company,  98  Me.  579;  57  Atl.  100. 

3.  Procuring  the  Charter.  —  The  incorporators  should  first  prepare  and 
sign  written  articles  of  association,  setting  forth  the  purposes  of  the  corporation, 
the  place  where  the  first  meeting  of  incorporators  shall  be  held,  and  the  date 
thereof,  together  with  the  names  and  residences  of  the  incorporators.  The  first 
meeting  of  incorporators  may  be  called  by  one  or  more  of  the  signers  of  said 
articles  of  association  by  giving  notice  thereof,  stating  the  time,  place,  and 
purposes  of  the  meeting  to  each  signer  in  writing,  or  by  publishing  it  in  some 
newspaper  printed  in  the  county  where  the  corporation  is  to  be  domiciled,  at 
least  fourteen  days  prior  to  the  time  appointed  therefor.  If  all  the  signers  of 
said  articles  shall  in  writing  waive  notice  and  fix  a  time  and  place  for  such 
meeting,  no  notice  of  publication  shall  be  necessary.  Whether  the  meeting  be 
called  by  notice  or  by  means  of  a  waiver  of  notice,  the  same  must  describe  the 
purposes  of  said  meeting  as  follows:  (1)  To  organize  into  a  corporation;  (2)  to 
adopt  a  corporate  name ;  (3)  to  define  the  purposes  of  the  corporation ;  (4)  to 
fix  the  amount  of  capital  stock  and  divide  the  same  into  shares ;  (5)  to  elect  a 
president,  not  less  than  three  directors,  a  clerk,  a  treasurer,  and  all  other  neces- 
sary officers ;  (6)  to  adopt  a  code  of  by-laws ;  (7)  to  act  upon  any  other  business 
which  may  properly  come  before  the  meeting  (Laws  of  1907,  chap.  86).  The 
meeting  should  then  be  held,  whereat  a  chairman  and  a  clerk  are  chosen.  The 
clerk  should  forthwith  be  sworn.  After  the  business  described  above  is  con- 
cluded, a  certificate  of  organization  should  be  prepared  and  signed  by  the 
president  and  a  majority  of  the  board  of  directors  (for  contents  of  certificate 
of  organization  see  sec.  4,  post).  This  certificate  must  be  sworn  to  by  the  persons 
signing  the  same.  The  certificate  of  organization  must  next  be  submitted  to 
the  Attorney-General  for  examination  and  approval.  After  this  is  obtained, 
the  certificate  of  organization,  together  with  the  certificate  of  the  Attorney- 
General  approving  the  same,  must  be  recorded  in  the  office  of  the  register  of 
deeds  of  the  county  where  the  principal  place  of  business  of  the  corporation  is 
located.  Within  sixty  days  after  the  date  of  the  organization  meeting,  a  copy 
of  the  certificate  of  organization  duly  certified  by  such  register  of  deeds  must 
be  filed  in  the  office  of  the  Secretary.  As  soon  as  the  certificate  above  referred 
to  is  filed  in  the  office  of  the  Secretary  of  State  the  corporate  existence  com- 
mences (sees.  6,  8,  10). 

348 


DIGEST    OF    INCORPORATION    ACTS.  —  MAINE. 

4.  Contents  of  the  Certificate  of  Organization. — The  certificate  must 
set  forth: 

a.  Name.  — The  name  of  the  corporation.  Similarity  of  names  is  not  for- 
bidden. 

b.  Purposes.  —  As  many  purposes  as  may  be  desired  may  be  inserted,  pro- 
vided they  are  not  covered  by  special  acts. 

c.  Capital  Stock.  —  The  capital  stock  cannot  be  less  than  §1,000. 

d.  Capital  Stock  paid  in.  —  No  particular  amount  required  by  statute. 

e.  Par  Value  of  Shares.  —  This  may  be  any  amount. 

/.    Stockholders.  —  Names  and  residences  of  the  subscribers  to  capital  stock. 
g.    Domiciliary  Office.  —  The  name  of  the  county  where  the  corporation  is 
located. 

Chafee  r.  Bank,  71  Me.  514. 

h.  Directors.  —  Number  and  names  of  directors.  There  must  be  at  least 
three,  and  all  must  be  stockholders.     There  are  no  residential  requirements. 

i.  Clerk.  —  Name  and  residence  of  the  clerk.  The  clerk  must  be  a  resident 
of  the  State  (sees.  3,  7). 

5.  Statutory  Powers.  —  In  addition  to  the  enumeration  of  the  common 
law  powers  of  corporations,  the  statute  grants  to  corporations  a  number  of 
additional  powers,  which  may  be  enumerated  as  follows :  To  hold  stock  and 
bonds  in  other  corporations,  to  conduct  business  in  other  States  and  countries, 
to  issue  preferred  stock,  to  consolidate  with  other  corporations,  to  vote  by 
proxy,  to  forfeit  stock  for  non-payment  of  assessments,  to  hold  directors' 
meetings  outside  of  the  State,  to  issue  stock  for  sendees  and  property  (sees. 
16,  17,  37,  38,  46,  51).  Corporations  are  expressly  empowered  to  determine 
by  their  by-laws  the  manner  of  calling  and  conducting  meetings,  the  number 
of  members  that  shall  constitute  a  quorum,  the  number  of  votes  to  be  given  by 
shareholders  by  whom  any  and  all  officers,  except  president  and  directors, 
shall  be  elected,  by  whom  vacancies  in  the  board  of  directors  or  other  offices 
may  be  filled,  the  tenure  of  their  several  offices,  the  mode  of  voting  by  proxy 
and  of  selling  shares,  for  neglect  to  pay  assessments,  and  may  enforce  such 
by-laws  by  penalties  not  exceeding  $20  (Laws  of  1907,  chap.  154). 

Franklin  Co.  v.  Bank,  68  Me.  43. 

6.  Corporate  Indebtedness.  — There  is  no  statutory  limitation  as  to  the 
amount  of  indebtedness. 

7.  Organization  Tax.  —  The  organization  tax  is  $10  for  companies  having 
a  capital  stock  of  $10,000  or  less.  Beyond  that  and  up  to  $500,000  the  organiza- 
tion tax  is  s")0,  and  for  each  hundred  thousand  dollars  in  excess  of  $500,000, 
$10  additional  (sec.  8). 

8.  Filing  and  Recording  Fees.  —  Fee  to  Attorney-General  for  examin- 
ing and  approving  the  certificate  of  organization,  $5  ;  fee  to  register  of  deeds  for 
recording  certificate  of  organization  and  making  certified  copy  thereof,  usually 
about  $5;  fee  to  Secretary  of  State  for  receiving,  filing,  and  recording  certi- 
fied copy  of  certificate  of  organization,  $5 ;  fee  to  Secretary  of  State  for  certified 
copy  of  certificate  of  organization,  $3. 

'.).  Commencing  Business.  —  Aside  from  the  right  to  perfect  the  organi- 
zation of  the  corporation,  no  business  can  be  transacted  until  after  the  certifi- 
cate of  organization  is  approved  by  the  Attorney-General,  recorded  in  the 
office  of  the  register  of  deeds,  and  a  certified  copy  thereof  filed  in  the  office  of 
the  Secretary  of  State  (sec.  10).     Within  twenty  days  after  the  acceptance  by 

349 


DIGEST    OF    INCORPORATION    ACTS.  —  MAINE. 

the  clerk  of  the  corporation  of  his  office,  he  should  file  in  the  office  of  th& 
register  of  deeds  in  the  county  where  the  corporation  is  located,  and  where  it 
has  a  place  of  business  or  a  general  agent,  a  certificate  of  his  election  as  such 
clerk  (sees.  22,  23). 

10.  Organization  Meeting.  —  Must  be  held  within  the  State  in  the  ab- 
sence of  any  statute  authorizing  it  to  be  held  elsewhere  (sec.  7).  The  first 
directors'  meeting  should  also  be  held  there  (Laws  of  1903,  chap.  182). 

Freeman  v.  Company,  38  Me.  343. 

11.  Meetings  of  Stockholders  and  Directors.  — All  meetings  of  stock- 
holders must  be  held  within  the  State.  Directors'  meetings  may  be  held  with- 
out the  State  if  the  by-laws  so  provide  (sees.  7,  19). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  at  least  three  directors,  each  of  whom  must  be  a  stockholder. 
There  are  no  residential  requirements.  They  may  be  classified  if  desired,  and 
may  act  through  committees  (sec.  19). 

b.  Liabilities.  —  Directors  are  liable  for  the  illegal  declaration  of  dividends 
(sec.  32). 

13.  Stockholders'  Liabilities.  —  Stockholders  in  ordinary  business  cor- 
porations are  liable  only  for  their  unpaid  stock  subscriptions  (sees.  84,  95). 
They  are  also  liable  to  creditors  to  the  extent  of  illegal  dividends  received  by 
them  (sec.  32). 

Grindle  v.  Stone,  78  Me.  176;  3  Atl.  183. 

14.  Stock  Certificates.  —  Each  shareholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  the  president  or  vice-president,  and  by  the 
cashier,  clerk,  or  treasurer  (sec.  34). 

15.  Preferred  Stock.  —  Two  or  more  kinds  of  stock  may  be  created  with 
such  distinctions,  preferences,  and  voting  powers  as  shall  be  fixed  and  deter- 
mined by  the  by-laws  or  by  vote  of  the  stockholders  at  a  meeting  called  for 
that  purpose.  Any  or  all  of  the  capital  stock  may  be  preferred,  and  any  dividend 
paid  thereon  that  may  be  desired  (sec.  49). 

16.  Payment  of  Capital  Stock.  —  A  corporation  may  purchase  mines, 
manufactories,  or  other  property  necessary  for  its  business,  and  the  stock  of 
other  companies  owning  mining,  manufacturing  apparatus,  mills,  or  other 
property  necessary  for  its  business,  and  issue  stock  to  the  amount  of  the  value 
thereof  in  payment  therefor.  May  likewise  issue  stock  for  services  rendered 
to  such  corporation,  and  the  stock  so  issued  shall  be  full-paid  stock  and  not 
liable  to  any  further  call  or  payment  thereon,  and  in  the  absence  of  actual 
fraud  in  the  transaction  the  judgment  of  the  directors  as  to  the  value  of  the 
property  purchased  or  services  rendered  shall  be  conclusive  (sees.  50,  51). 

Libby  v.  Tobey,  82  Me.  397;  19  Atl.  904. 

17.  Books.  — The  clerk  is  required  to  keep  at  the  office  of  the  corpora- 
tion within  the  State  all  corporate  records  and  a  stock  register  which  shall  be 
open  at  all  reasonable  hours  to  the  inspection  of  persons  interested,  who  may 
make  extracts  therefrom  (sees.  19,  21). 

18.  Office  and  Clerk.  —  All  domestic  corporations  must  have  a  clerk,  and 
must  keep  at  some  fixed  place  within  the  State  a  clerk's  office  where  shall  be 
kept  the  corporate  records  and  the  stock  register  (sees.  3,  20). 

19.  Reports.  —  Corporations  must  file  in  the  office  of  the  Secretary  of 
State  annually  on  or  before  the  1st  day  of  June  a  statement  signed  and  sworn 

350 


DIGEST    OF    INCORPORATION    ACTS.  —  MAINE. 

to  by  the  president  or  treasurer  containing  the  names  of  the  directors,  the 
president,  treasurer,  and  clerk,  with  the  residence  of  each,  the  location  of  its 
principal  office  within  the  State,  and  the  amount  of  authorized  capital  stock 
(sec.  26).  Whenever  there  is  a  change  in  the  office  of  clerk  of  a  corporation, 
the  clerk  shall,  within  twenty  days  after  the  acceptance  of  the  office,  file  a  cer- 
tificate of  his  election  in  the  office  of  the  registry  of  deeds  in  the  county  where 
the  corporation  is  located,  or  where  it  has  a  place  of  business  or  a  general  agent 
(sec.  22). 

20.  Anti-Trust  Statute.  —  Combinations  for  regulating  prices  are  pro- 
hibited (sees.  53,  55). 

21.  Annual  Franchise  Tax.  —  All  domestic  business  corporations  must 
pay  an  annual  franchise  tax  of  $5  where  the  authorized  capital  stock  of  the  cor- 
poration does  not  exceed  $50,000;  $10  where  the  same  exceeds  S50,000  and 
does  not  exceed  S200.000 ;  $50  where  the  same  exceeds  8200,000  and  does  not 
exceed  $500,000;  $75  where  the  same  exceeds  $500,000  and  does  not  exceed 
$1,000,000,  and  a  further  sum  of  $50  a  year  for  each  one  hundred  thousand 
dollars  or  part  thereof  in  excess  of  $1,000,000  (Laws  of  1907,  chap.  185). 

22.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Failure  to  organ- 
ize within  two  years  from  the  date  when  the  certificate  of  organization  has 
been  filed  with  the  Secretary  of  State  renders  the  charter  liable  to  forfeiture ; 
also  whenever  the  annual  franchise  tax  shall  have  remained  in  arrears  for  the 
period  of  one  year  after  the  same  shall  have  become  payable  (chap.  1,  sees.  28, 
29;  chap.  8,  sees.  21,  22;  chap.  47,  sec.  31.  See  Laws  of  1907,  chap.  109;  Laws 
of  1909,  chap.  127). 

23.  Amendments.  —  To  change  the  par  value  of  the  shares  of  the  capital 
stock  requires  a  meeting  of  the  stockholders  called  for  that  purpose,  accompa- 
nied by  a  vote  thereat  representing  a  majority  of  the  stock  issued  in  favor  of 
the  change.  A  certificate  thereof,  signed  by  the  president  or  clerk,  shall  be 
filed  in  the  office  of  the  Secretary  of  State  in  the  same  manner  as  provided  by 
law  for  changing  any  charter  or  certificate  of  organization  (sec.  36). 

To  increase  the  capital  stock  or  change  the  number  of  directors  the  stock- 
holders may,  by  a  vote  representing  a  majority  of  the  stock  issued,  increase 
the  amount  of  its  capital  stock  to  any  amount,  and  may  change  the  number  of 
directors  in  hke  manner.  The  corporation  shall  file  a  certificate  thereof  with 
the  Secretary  of  State  within  ten  days  thereafter.  Thereupon  such  vote  shall 
take  effect  (sec.  39). 

To  decrease  the  amount  of  the  capital  stock  the  stockholders,  at  a  meeting 
duly  called  for  that  purpose,  or  at  any  annual  meeting  when  notice  shall  have 
been  given  of  such  proposed  action  in  the  call  therefor,  may,  by  a  vote  repre- 
senting a  majority  of  the  stock  issued,  decrease  the  amount  of  its  capital  stock 
to  any  amount  desired,  and  the  corporation  shall  give  notice  of  such  change  to 
the  Secretary  of  State  within  ten  days  thereafter,  and  each  stockholder  shall 
within  three  months  after  such  meeting  surrender  such  a  proportion  of  his  stock 
as  the  amount  of  decrease  shall  bear  to  the  amount  of  the  capital  stock  before 
the  decrease,  so  that  each  stockholder  shall  have  the  same  proportion  of  the 
whole  capital  stock  of  the  company  as  before  the  decrease  (sec.  40).  (For  cer- 
tificates of  reduction  of  capital  when  impaired,  see  sees.  41—41.) 

A  corporation  at  a  legal  meeting  of  its  stockholders  may  vote  to  change  its 
name  and  adopt  a  new  one;  and  when  the  proceedings  of  such  meeting,  certified 
by  the  clerk  thereof,  shall  be  returned  to  the  office  of  the  Secretary  of  State  to 
be  recorded  by  him,  the  name  shall  be  deemed  changed;    and  the  corporation 

:;.M 


DIGEST    OF    INCORPORATION   ACTS.  —  MAINE. 

under  its  new  name  has  the  same  rights,  powers,  and  privileges,  and  is  subjec  t 
to  the  same  duties,  obligations,  and  liabilities  as  before,  and  may  be  sued  and 
may  sue  by  its  new  name ;  but  no  action  brought  against  it  by  its  former  name 
shall  be  defeated  on  that  account,  and  on  motion  of  the  other  party  the  new 
name  may  be  substituted  therefor  in  the  action  (Laws  of  1907,  chap.  154; 
Laws  of  1909,  chap.  61). 

Any  corporation  may  by  a  vote  representing  a  majority  of  the  stock  issued 
change  its  location  from  one  county  to  another  in  the  State,  provided  it  shall 
file  by  its  clerk  or  other  officer  in  the  registry  of  deeds  in  each  of  said  coun- 
ties, twenty  days  after  such  change  of  location,  the  certificate  required  by 
sec.  22  of  chap.  47  of  the  Revised  Statutes,  1904  (sec.  52). 

The  law  also  provides  that  whenever  a  corporation  shall  make  a  change  in 
its  charter  or  certificate  of  organization  in  any  manner  for  the  more  conven- 
ient transaction  of  its  business,  it  shall  forward  a  notice  of  such  change  to  the 
Secretary  of  State,  who  shall  record  the  same  in  a  book  kept  for  that  purpose 
(sec.  45). 

The  purposes  of  the  corporation  cannot  be  changed,  apparently,  except  by 
special  act  of  the  legislature. 

24.  Extension  of  Corporate  Existence.  — There  is  no  provision  for  the 
extension  of  corporate  existence. 

25.  Dissolution.  —  Corporations  may  be  dissolved  upon  application  to  the 
courts  (sees.  77,  83). 

26.  Foreign  Corporations. — Every  corporation  established  under  laws 
other  than  those  of  this  State  for  any  lawful  purpose  other  than  as  a  bank, 
savings  bank,  trust  company,  surety  company,  safe  deposit  company,  insurance 
company,  or  public  service  company,  which  has  a  usual  place  of  business  in 
this  State  permanently  or  temporarily,  without  a  usual  place  of  business 
therein,  shall,  before  doing  business  in  this  State,  in  writing  appoint  the  Secre- 
tary of  State  and  his  successor  in  office  to  be  its  true  and  lawful  attorney  upon 
whom  all  lawful  processes  in  any  action  or  proceeding  against  it  may  be  served, 
and  in  such  writing  shall  agree  that  any  lawful  process  against  it  which  is  served 
on  said  attorney  shall  be  of  the  same  legal  force  and  validity  as  if  served  on  it, 
and  that  the  authority  shall  continue  in  forte  so  long  as  any  liability  remains 
outstanding  against  it  in  this  State.  The  power  of  attorney  and  a  copy  of  the 
vote  authorizing  its  execution,  duly  certified  and  authenticated,  shall,  upon 
payment  of  a  fee  of  ten  dollars,  be  filed  in  the  office  of  the  Secretary,  and  copies 
certified  by  him  shall  be  sufficient  evidence  thereof.  Service  of  such  process 
shall  be  made  by  leaving  a  copy  of  the  process  and  a  fee  of  two  dollars  in  the 
hands  or  in  the  office  of  the  Secretary,  and  such  service  shall  be  sufficient  ser- 
vice upon  the  corporation  (Laws  of  1909,  chap.  113,  sec.  1). 

When  legal  process  against  any  such  corporation  has  been  served  upon  the 
Secretary,  he  shall  immediately  give  notice  to  the  corporation  of  such  service 
by  mail,  postage  prepaid,  directed,  in  the  case  of  a  corporation  established  in 
a  foreign  country,  to  the  resident  manager,  if  any,  in  the  United  States,  and 
shall,  within  two  days  after  such  service  in  the  same  manner  forward  a  copy 
of  the  process  served  upon  him  to  such  corporation  or  manager,  or  to  any 
other  person  designated  by  the  corporation  by  written  notice  filed  in  the  office 
of  the  Secretary.  The  fee  of  two  dollars  paid  by  the  plaintiff  to  the  Secretary 
at  the  time  of  the  service  shall  be  taxed  in  his  costs,  if  he  prevails  in  the  suit. 
The  Secretary  shall  keep  a  record  of  the  day  and  hour  of  the  service  of  all  such 
process  (Laws  of  1909,  chap.  113,  sec.  2). 

352 


DIGEST   OF   INCORPORATION   ACTS.  —  MAINE. 

Every  such  foreign  corporation,  before  transacting  business  in  this  State, 
shall,  upon  payment  of  the  fee  hereinafter  provided,  file  with  the  Secretary  of 
State  a  copy  of  its  charter,  articles,  or  certificate  of  incorporation,  certified 
under  the  seal  of  the  State  or  country  in  which  such  corporation  is  incorporated 
by  the  Secretary  of  State  thereof  or  by  the  officer  having  charge  of  the  original 
record  therein,  a  true  copy  of  its  by-laws,  and  a  certificate  in  such  form  as  the 
Secretary  of  State  may  require,  setting  forth,  (a)  the  name  of  the  corporation; 
(b)  the  location  of  its  principal  office;  (c)  the  names  and  addresses  of  its 
president,  treasurer,  clerk,  or  secretary  and  of  the  members  of  its  board  of 
directors;  (d)  the  date  of  its  annual  meeting  for  the  election  of  officers;  (e) 
the  amount  of  its  capital  stock  authorized  and  issued;  the  number  and  par 
value  of  its  shares  and  the  amount  paid  in  thereon  to  its  treasurer.  Said  cer- 
tificate shall  be  subscribed  and  sworn  to  by  its  president,  treasurer,  or  clerk. 
The  officers  and  directors  of  such  corporation  shall  be  subject  to  the  same 
penalties  and  liabilities  for  false  and  fraudulent  statements  and  returns  as 
officers  and  directors  of  a  domestic  corporation.  Every  officer  of  such  a  cor- 
poration which  fails  to  comply  with  the  requirements  of  this  section  and  of 
sections  one  and  six,  and  every  agent  thereof  who  transacts  business  as  such 
in  this  State  shall,  for  such  failure,  be  liable  to  a  fine  of  not  more  than  five  hun- 
dred dollars.  Such  failure  shall  not  affect  the  validity  of  any  contract  with 
such  corporation,  but  no  action  shall  be  maintained,  or  recovery  had,  in  any 
of  the  courts  of  this  State  by  any  such  foreign  corporation  so  long  as  it  fails 
to  comply  with  the  requirements  of  said  sections  (Laws  of  1909,  chap.  113, 
sec.  3). 

The  Secretary  of  State  shall  refuse  to  accept  or  file  the  charter,  certificate, 
or  other  papers  of,  or  accept  appointment  as  attorney  for  service  for,  any  such 
corporation,  which  does  a  business  in  this  State,  the  transaction  of  which  by 
domestic  corporations  is  not  then  permitted  by  the  laws  of  this  State  (Laws  of 
1909,  chap.  113,  sec.  4). 

All  such  foreign  corporations  shall  within  thirty  days  after  the  payment 
in  of  an  increase  of  capital  stock,  upon  payment  of  the  fee  hereinafter  provided, 
file  in  the  office  of  the  Secretary  of  State  a  certificate  of  the  amount  of  such  in- 
crease and  the  fact  of  such  payment,  signed  and  sworn  to  by  its  president, 
treasurer,  or  clerk.  Within  thirty  days  after  the  vote  of  such  corporation  au- 
thorizing a  reduction  of  its  capital  stock,  a  copy  of  such  vote,  signed  and  sworn 
to  by  the  clerk  of  the  corporation,  shall,  upon  payment  of  the  fee  hereinafter 
provided,  be  filed  in  the  office  of  the  Secretary  of  State  (Laws  of  1909,  chap. 
113,  sec.  5). 

Every  such  foreign  corporation  shall  annually,  within  thirty  days  after 
the  date  fixed  for  its  annual  meeting  last  preceding  the  date  of  such  certificate, 
or  within  thirty  days  after  the  final  adjournment  of  said  meeting,  but  not  more 
than  three  months  after  the  date  so  fixed  for  said  meeting,  prepare  and  file 
in  the  office  of  the  Secretary  of  State,  upon  payment  of  a  fee  of  ten  dollars,  a 
certificate  signed  and  sworn  to  by  its  president,  treasurer,  or  clerk,  showing 
the  change  or  changes,  if  any,  in  the  particulars  included  in  the  certificate  re- 
quired by  section  3  made  since  the  filing  of  said  certificate  or  of  the  last  annual 
report  (Laws  of  1909,  chap.  113,  sec.  6). 

Any  such  foreign  corporation  which  omits  to  file  the  certificate  required  bi- 
section 6,  shall  forfeit  to  the  State  not  less  than  live  nor  more  than  ten  dollars 
for  each  day  for  fifteen  days  after  the  expiration  of  the  period  therein  named, 
and  not  less  than  ten  nor  more  than  two  hundred  dollars  for  each  day  there- 
23  353 


DIGEST   OF   INCORPORATION   ACTS. — MAINE. 

after,    during    which    such    omission    continues    (Laws    of   1909,   chap.    113, 
sec.  7). 

The  officers  of  such  foreign  corporations  shall  be  jointly  and  severally 
liable  for  all  the  debts  and  contracts  of  the  corporation  contracted  or  entered 
into  while  they  are  officers  thereof,  if  any  statement  or  report  which  is  required 
by  the  provisions  of  this  act  is  made  by  them  which  is  false  in  any  material 
representation  and  which  they  know  to  be  false ;  but  only  the  officers  who  sign 
such  statement  or  report  shall  be  so  liable  (Laws  of  1909,  chap.  113,  sec.  9). 


354 


DIGEST    OF    INCORPORATION    ACTS.  —  MARYLAND. 


MARYLAND. 

(The  references  cited  below  are  to  the  Revised  Corporation  Act  of  1908,  approved  March 
31,  1908,  to  become  operative  on  June  1,  1908.  They  are  found  in  the  Session  Laws  of 
Maryland,  1908,  chapter  240.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Maryland  is  embodied  in  the  Revised  Cor- 
poration Act  of  1908,  found  in  the  Session  Laws  of  1908,  chap.  240.  Under 
this  act  corporations  may  be  formed  for  any  business  purpose  or  purposes. 
Special  provisions,  affecting  certain  classes  of  corporations,  found  in  Article  23 
of  Public  General  Laws  of  the  State  of  Maryland,  are  still  in  force  and  effect 
in  so  far  as  they  may  be  consistent  with  the  provisions  of  the  Act  of  1908.  The 
special  provisions  here  referred  to,  together  with  a  reference  to  the  same  in 
the  Code  of  Public  General  Laws,  is  here  given :  bridge  companies  (Code,  Art. 
23,  sees.  113-121);  building  and  homestead  associations  (Id.  sees.  122-131); 
cemetery  companies  (Id.  sees.  132-136);  gas  and  electric  light  companies 
(Id.  sees.  142-143  a) ;  insurance  companies  (Id.  sees.  144-19S  e) ;  fraternal 
societies  (Id.  sees.  210-225) ;  mining  companies  (Id.  sees.  207-239) ;  railway 
companies  (Id.  sees.  242-300  d) ;  railroad  corporations  (Id.  sees.  301-316) ; 
safe  deposit  companies  (Id.  sec.  317) ;  savings  institutions  (Id.  sees.  318-321) ; 
telephone  and  telegraph  companies  (Id.  sees.  322-338  c) ;  trust,  surety,  and 
fidelity  companies  (Id.  sees.  339-342) ;  turnpike,  plank  road,  and  passenger 
railway  companies  (Id.  sees.  343-356) ;  water  companies  (Id.  sees.  358-359) ; 
banks  (Code,  Art.  11). 

2.  Incorporators.  —  Any  three  or  more  adult  persons  of  whom  at  least  one 
shall  be  a  citizen  of  the  State.  The  statute  does  not  expressly  provide  that  the 
incorporators  shall  be  subscribers  for  the  capital  stock  of  the  company. 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate  must 
state,  (a)  Incorporators'  names  in  full  and  residence  of  incorporators.  The  names 
of  incorporators  who  should  be  subscribers  to  the  certificates,  with  a  statement 
that  they  associate  themselves  together  with  the  intention  of  forming  a  cor- 
poration (sec.  3).  (b)  Name.  Name  of  the  proposed  corporation,  which  shall 
always  be  such  as  to  indicate  that  it  is  a  corporation  as  distinguished  from  a 
natural  person  or  partnership.  It  shall  be  deemed  sufficient  compliance  with 
this  provision  if  the  name  of  the  corporation  begins  with  the  word  "  the "  and 
ends  with  the  word  "  company  "  or  "  corporation,"  or  if  the  title  shall  contain  the 
word  "  incorporated."  Similarity  of  names  is  not  expressly  forbidden  (sec.  3). 
(c)  Purpose.  The  purpose  or  purposes  for  which  the  corporation  is  formed 
and  the  business  or  objects  to  be  carried  on  or  promoted  by  it.  Under  the 
foregoing  any  number  of  business  purposes  may  be  included  in  one  certificate 
(sec.  3).  (d)  Domiciliary  office.  The  place  in  Maryland  where  the  principal 
office  of  the  corporation  will  be  located  (sec.  3).  (e)  Capital  stock.  The 
total  amount  of  capital  stock  of  the  proposed  corporation,  if  any  (sec.  3). 
Also  the  number  and  par  value  of  the  shares  and  the  restrictions,  if  any,  imposed 
upon  the  transfer  of  shares.  The  total  amount  of  capital  stock  may  be  any 
amount  except  in  the  case  of  mining  companies  operating  in  Maryland,  whose 
capital  is  limited  to  $3,000,000.  The  par  value  of  shares  may  also  be  any 
amount.    If  preferred  stock  is  to  be  issued,  the  certificate-shall  state  how  much 


DIGEST    OF    INCORPORATION    ACTS.  —  MARYLAND. 

of  the  total  capital  stock  is  to  be  preferred,  and  the  provisions,  voting  powers, 
restrictions,  and  qualifications  of  the  preferred  stock  (sec.  3).  (/)  Directors. 
The  number  of  directors,  trustees,  or  managers,  which  shall  not  be  less  than 
three,  together  with  the  names  of  those  who  shall  act  as  such  for  the  first  year 
or  until  their  successors  are  duly  chosen  and  qualify.  At  least  one  of  the  direc- 
tors must  be  a  citizen  of  the  State  of  Maryland  and  actually  residing  within 
the  State  (sec.  3).  (g)  Proviso  for  the  regulation  of  internal  affairs.  Any  pro- 
visions may  be  here  inserted  which  may  be  deemed  desirable  for  the  purpose  of 
defining,  limiting,  and  regulating  the  powers  of  the  directors  and  stockholders 
or  any  class  of  stockholders.  Such  provisions  however  must  not  be  contrary 
to  the  law  of  the  State  or  inconsistent  with  any  of  the  terms  and  limits  of  the 
Revised  Corporation  Act  of  1908. 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of  com- 
mon law  powers  (sec.  7),  corporations  have  the  following  additional  powers: 
to  issue  preferred  stock  (sec.  34) ;  to  forfeit  stock  for  non-payment  of  assess- 
ments (sec.  39) ;  to  accumulate  votes  in  election  of  directors  (sec.  20) ;  to 
hold  stock  in  other  corporations  (sees.  7,  18) ;  to  vote  by  proxy  at  stockholders' 
meetings  (sec.  19) ;  to  establish  voting  trusts  for  a  period  not  exceeding  five 
years  (sec.  77) ;  to  classify  directors  into  classes  not  exceeding  five  in  number 
(sec.  11) ;  to  appoint  executive  committee  from  the  full  board  of  directors 
(sec.  10) ;  to  consolidate  with  other  corporations  (sees.  30,  31) ;  to  hold  property 
within  or  without  the  State  (sec.  7). 

5.  Procuring  the  Charter.  —  The  certificate  of  incorporation  must  be  exe- 
cuted and  acknowledged  by  each  of  the  incorporators  before  some  officer  compe- 
tent to  take  the  acknowledgment  of  deeds  for  land  situate  in  the  State  (sec.  3). 
If  the  certificate  is  acknowledged  before  a  justice  of  the  peace,  his  official  charac- 
ter must  be  first  certified  to  by  the  clerk  of  the  Superior  Court  under  his  official 
seal.  The  certificate  must  be  then  submitted  to  one  of  the  judges  of  the  judi- 
cial circuit  within  which  the  principal  office  of  the  corporation  is  to  be  located 
(in  Baltimore  to  one  of  the  judges  of  the  Supreme  Bench  at  Baltimore  City), 
and  if  the  latter  approves  it  he  certifies  that  fact  upon  the  certificate.  (Note 
case  of  Boyce  v.  Trustees,  46  Md.  359.)  The  certificate  when  so  certified  must 
be  delivered  to  the  tax  commissioner,  who,  upon  payment  of  the  organization  tax 
and  recording  fees,  shall  receive  and  endorse  thereon  the  date  and  time  of  receipt 
and  promptly  record  the  same  in  a  book  to  be  kept  by  him  for  that  purpose. 
Upon  recording  the  certificate  in  his  office  the  State  tax  commissioner  transmits 
the  original  certificate  and  a  copy  thereof  duly  certified  by  him  to  the  clerk  of  the 
Circuit  or  Superior  Court  (to  whom  certificate  was  submitted  in  the  first  instance) 
by  whom  the  same  shall  be  again  recorded.  At  the  time  of  receipt  of  such  cer- 
tificate the  State  tax  commissioner  shall  collect  double  the  fees  allowed  by  law 
to  clerks  of  courts  for  recording  a  document  of  similar  length.  One-half  of  the  sum 
so  collected  by  him  shall  be  paid  by  him  to  the  clerk  of  the  Circuit  or  Superior 
Court  to  whom  such  certificate  shall  be  transmitted  for  record  as  hereinbefore 
set  forth,  and  for  the  other  half  he  is  required  to  account  to  the  comptroller  and 
pay  the  same  forthwith  to  the  State  treasurer  for  the  use  of  the  State  (sec.  4). 

6.  Corporate  Indebtedness.  —  There  are  no  limitations  upon  the  amount  of 
indebtedness  which  a  corporation  may  incur  (sec.  7) . 

7.  Organization.  Tax.  —  The  organization  tax  is  one-eighth  of  one  per  cent 
upon  the  capital  stock  authorized  (Code,  Art.  LXXXI.  sec.  98).  The  same 
organization  tax  is  payable  upon  any  subsequent  increase.  This  organization 
tax  becomes  due  and  payable  upon  the  recording  of  the  certificate  of  incorpora- 

356 


DIGEST    OF    INCORPORATION    ACTS.  —  MARYLAND. 

tion,  and  no  company  shall  have  or  exercise  any  corporate  powers  until  such 
tax  is  paid  to  the  State  treasurer. 

8.  Filing  and  Recording  Fees.  —  The  State  tax  commissioner  is  entitled  to 
the  following  fees;  for  filing  any  paper  in  his  office  and  entering  same,  10  cents; 
for  affixing  seal  to  any  paper,  20  cents;  for  certificate  under  seal  for  the 
qualification  of  any  judge  to  any  instrument  in  writing,  ,30  cents;  for  record- 
ing certificate  of  incorporation  and  for  copies  of  any  paper,  for  each  ten  words 
or  figures,  2  cents  (Code,  Art.  XXXVI.  sec.  12).  The  fees  of  the  clerks  of 
courts  for  the  above  services  are  just  one-half  of  this  charge  by  the  State  tax 
commissioner  (sec.  4). 

9.  Commencing  Business. —  Corporations  may  commence  business  as  soon  as 
the  organization  tax  is  paid  and  the  certificate  of  incorporation  filed  and  recorded 
as  provided  by  law.  There  is  no  statutory  requirement  as  to  the  amount  of 
capital  with  which  the  ordinary  business  corporation  may  commence  business. 
One-fourth  of  the  authorized  capital  stock,  however,  must  be  paid  in  within 
one  year  from  the  date  of  incorporation;  one-fourth  in  two  years,  one-fourth 
in  three  years,  and  the  remainder  in  four  years  (Laws  of  190S,  chap.  305). 
Within  thirty  days  after  the  payment  of  the  last  instalment  of  the  capital 
stock,  the  president  and  a  majority  of  the  directors  must  file  a  statement  sworn 
to  by  the  president,  showing  the  amount  of  capital  stock  paid  in,  of  property 
received  in  payment  of  subscriptions  and  extent  to  winch  payments  have  been 
made  in  property.  This  certificate  must  be  filed  with  the  clerk  of  the  court 
where  the  original  certificate  was  recorded  (sec.  36). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held  within 
the  State  in  the  absence  of  any  statute  providing  otherwise  (sec.  17). 

11.  Meetings  of  Stockholders  and  Directors. —  Directors'  meetings  can  be 
held  within  or  without  the  State  (sec.  12). 

12.  Directors'  Qualifications  and  Liabilities.  —  (a)  Qualifications.  There 
must  not  be  less  than  three  directors,  at  least  one  of  whom  must  be  a  citizen 
and  actual  resident  of  Maryland.  For  the  first  year  and  until  their  successors 
are  chosen  and  qualified  the  board  consists  of  the  persons  named  as  such  in  the 
certificate  of  incorporation.  Cumulative  voting  may  be  provided  for  in  the 
by-laws  if  desired.  Directors  may  provide  for  an  executive  committee  of  two 
or  more  members,  to  be  elected  from  and  by  the  board  of  directors,  and  to 
such  committee  may  delegate  the  management  of  the  current  and  ordinary 
business  of  the  corporation  and  such  other  duties  as  the  by-laws  may  pre- 
scribe (sees.  19  and  20). 

(6)  Liabilities.  If  the  trustees,  managers,  or  directors  of  any  corporation 
shall  declare  and  pay  any  dividend  when  the  corporation  is  insolvent,  or  any 
dividend  the  payment  of  which  would  render  it  insolvent,  or  would  diminish 
the  amount  of  the  capital  stock,  they  shall  be  jointly  and  severally  liable  to  the 
extent  of  the  dividends  so  declared  and  paid  for  all  the  debts  of  the  corporation 
then  existing,  and  also  for  all  that  shall  thereafter  be  contracted,  while  they 
shall  respectively  continue  in  office,  even  although  the  whole  amount  of  the 
capital  of  said  corporation  has  been  paid  in.  But  if  any  of  the  trustees,  direct- 
ors, or  managers  of  said  corporation  shall  object  to  declaring  such  dividend,  or 
to  the  payment  of  the  same,  and  shall,  at  any  time  before  the  time  fixed  for  tin- 
payment  of  the  same,  record  a  certificate  of  their  objection  in  writing  witli  the 
clerk  of  the  court  in  which  the  certificate  of  incorporation  is  recorded,  they  shall 
be  exempt  from  tin',  liability  imposed  hereby. 

No  loan  of  money  shall  be  made  by  any  corporation  to  any  stockholder  or 

357 


DIGEST    OF   INCORPORATION    ACTS.  —  MARYLAND. 

director  therein,  and  if  any  such  loan  shall  be  made,  the  officer  or  officers  or 
directors  who  shall  make  it  or  assent  thereto  shall  be  jointly  and  severally 
liable  for  all  the  debts  of  said  corporation  to  the  extent  of  the  loss  that  may 
result  from  such  loan,  but  this  paragraph  shall  not  apply  to  any  building  or 
homestead  association,  or  any  corporation  whose  principal  business  under  its 
charter  is  to  loan  money  on  real  or  personal  property,  or  to  any  corporation 
receiving  and  authorized  to  receive  money  on  deposit,  or  to  any  life  insurance 
company  lending  money  to  any  of  its  policy  holders  on  their  policies. 

In  the  event  of  the  insolvency  of  the  corporation,  the  liability  of  the  directors 
and  officers  under  this  section  (50)  shall  be  collectible  by  the  receiver  or  other 
person  winding  up  its  affairs,  as  an  asset  of  said  corporation  (sec.  50). 

Any  officer  or  agent  whatsoever  of  any  corporation  who  shall  fraudulently 
sign,  or  in  any  other  manner  assent  to  any  statement  or  publication,  either  for 
the  public  or  shareholders  thereof,  containing  untruthful  representations  of 
its  affairs,  assets,  or  liabilities  with  a  view  either  to  enhance  or  depress  the 
market  value  of  the  shares  therein,  or  the  value  of  its  corporate  obligations,  or 
in  any  other  manner  to  accomplish  any  fraud  thereby,  shall  be  deemed  guilty 
of  a  misdemeanor,  and  upon  conviction  thereof,  by  indictment  in  any  court  of 
law,  shall  be  fined  not  less  than  $1,000  nor  more  than  $10,000,  and  be  im- 
prisoned in  jail  or  penitentiary,  or  either  fined  or  imprisoned  at  the  discretion 
of  the  court  for  not  less  than  six  months  nor  more  than  three  years  (Code, 
Art.  XXVII.  sec.  134). 

13.  Stockholders'  Liabilities.  —  Except  as  hereinafter  stated,  stockholders 
in  all  ordinary  business  corporations  are  not  liable  for  corporate  debts  save  to 
the  extent  of  their  unpaid  subscriptions  to  the  capital  stock  of  the  corporation. 
Every  stockholder  of  a  domestic  business  corporation,  in  case  of  a  reduction  of 
its  capital  stock,  is  liable  to  the  corporation  or  its  receiver  for  the  payment  of 
its  liabilities  existing  at  the  time  of  said  litigation  to  the  extent  of  the  amount 
withdrawn  and  paid  to  such  stockholder,  and  every  stockholder  of  any  such 
corporation  shall  remain  liable  for  the  benefit  of  its  creditors  for  the  amount 
of  the  face  value  of  his  stock  or  of  his  subscription  in  case  the  stock  has  not 
been  issued,  less  the  amount  he  shall  already  have  paid  thereon  until  he  shall 
have  paid  such  amount  in  good  faith;  and  in  the  event  of  the  insolvency  of 
the  corporation,  such  liability  shall  be  considered  as  an  asset  of  the  corporation 
and  may  be  enforced  by  the  receiver  or  other  person  winding  up  the  affairs  of 
such  corporation  notwithstanding  any  release,  agreement,  or  arrangement  short 
of  actual  payment  which  may  have  been  made  between  said  corporation  and 
said  stockholder. 

In  addition  to  the  foregoing  it  is  provided  by  chapter  305,  of  the  Laws  of 
1908,  as  follows : 

All  the  stockholders  of  any  such  corporation  shall  be  severally  and  indi- 
vidually liable  to  the  creditors  of  the  corporation  of  which  they  are  stock- 
holders, to  an  amount  equal  to  the  amount  of  stock  held  by  them  respectively, 
for  all  debts  and  contracts  made  by  the  corporation,  until  the  whole  amount 
of  the  capital  stock  fixed  and  limited  by  the  corporation  shall  have  been  paid 
in,  and  a  certificate  thereof  made  and  filed  as  prescribed  in  the  following  sec- 
tion, which  certificate  may,  however,  be  filed  at  any  time  after  thirty  days 
mentioned  in  said  section,  but  no  stockholder  shall  be  individually  liable  to  the 
creditors  of  such  corporation  except  to  the  amount  of  his,  her,  or  their  unpaid 
subscriptions  to  the  capital  stock ;  and  the  liability  of  such  stockholder  shall 
be  an  asset  of  the  corporation  for  the  benefit  ratably  of  all  the  creditors  of 
358 


DIGEST    OF    INCORPORATION    ACTS.  —  MARYLAND. 

such  corporation,  if  necessary,  to  pay  the  debts  of  such  corporation,  and  shall 
be  enforceable  only  by  appropriate  proceedings  by  such  corporation  or  by  a 
receiver,  assignee,  or  trustee  of  such  corporation,  acting  under  the  orders  of  a 
court  of  competent  jurisdiction,  provided,  however,  that  this  section  shall  not 
affect  the  right  of  any  creditor  under  the  existing  laws  of  this  State  against 
the  stockholders  who  were  liable  to  such  creditors  at  the  date  of  the  passage  of 
this  act;  and  provided,  further,  that  nothing  in  this  section  shall  be  consid- 
ered as  a  construction  by  the  legislature  of  the  law  hereby  amended,  and  the 
capital  stock  so  fixed  and  limited  shall  be  paid  in,  one-fourth  thereof  in  one 
year,  one-fourth  in  two  years;  one-fourth  in  three  years,  and  one-fourth  or 
the  balance  in  four  years  from  and  after  the  incorporation  of  said  company, 
or  such  corporation  may  be  dissolved,  provided,  however,  that  it  shall  be  law- 
ful for  the  trustees,  directors,  or  managers  of  any  such  corporation  to  collect 
and  enforce  the  payment  of  all  subscriptions  to  the  capital  stock  as  other  debts 
are  collected,  after  notice  being  given,  as  required  by  section  70  of  this  article, 
and  if  suit  shall  be  brought  by  the  trustees,  directors,  managers  of  any  such 
corporation  against  all  delinquent  stockholders  for  the  full  amount  of  unpaid 
subscriptions  within  four  years  from  the  incorporation  of  said  company,  such 
corporation  shall  not  be  dissolved ;  and  provided,  furthermore,  that  the  pro- 
visions of  this  section  shall  not  apply  to  any  homestead  or  building  association 
(sec.  41  a). 

The  exclusive  remedy  for  the  enforcement  by  creditors  against  stockholders 
of  all  rights  existing  under  the  preceding  section  64  as  the  same  stood  prior  to 
the  time  of  the  passage  of  this  act,  and  which  were  declared  by  said  section  as 
amended  by  this  act  not  to  be  affected  by  the  terms  thereof  as  herein  amended, 
shall  be  as  against  stockholders  residing  in  the  State  of  Maryland,  by  bill  in 
equity  in  the  nature  of  a  creditors'  bill  filed  against  such  stockholders  by  one 
or  more  creditors  on  behalf  of  themselves,  and  all  other  creditors  of  the  cor- 
poration who  may  come  in  and  make  themselves  parties  thereto  in  a  court 
having  jurisdiction  within  the  limits  of  the  county  or  city  of  Baltimore,  in 
which,  as  the  case  may  be,  the  principal  office  of  the  corporation  is  situated  at 
the  time  of  the  filing  of  the  bill,  or  in  case  any  such  corporation  has,  by  reason 
of  having  been  placed  in  the  hands  of  a  receiver,  or  from  any  other  cause, 
ceased  to  have  any  principal  office  at  the  time  of  the  fifing  of  the  bill,  then  the 
bill  shall  be  filed  in  a  court  having  jurisdiction  within  the  limits  of  the  county 
or  the  city  of  Baltimore  in  which,  as  the  case  may  be,  the  said  corporation  had 
its  last  principal  place  of  business;  and  to  any  such  bill  stockholders  residing 
beyond  the  limits  of  the  State  of  Maryland  may  become  parties  defendant, 
and  upon  so  becoming  parties  shall  not  be  proceeded  against  in  any  other  State 
or  Territory  or  in  the  District  of  Columbia,  in  respect  of  any  liability  imposed 
by  said  section  64  as  said  section  stood  before  the  repeal  thereof,  and  which  ex- 
isted at  the  time  of  the  passage  of  this  act  hereinbefore  referred  to.  This  sec- 
tion shall  become  operative  as  of  July  1st,  1907,  and  shall  cause  the  abatement  of 
all  actions  at  law  which  shall  have  been  brought  against  said  stockholders  since 
that  date  to  enforce  any  liability  created  by  section  64  as  said  section  stood  be- 
fore the  repeal  thereof  and  which  existed  at  the  time  of  the  passage  of  this  act, 
hereinbefore  referred  to,  provided,  however,  that  as  to  any  plaintiff  or  plaintiffs 
in  any  of  said  abated  suits,  who  shall,  within  sixty  days  from  the  passage  of  this 
act,  become  a  party  or  parties  to  a  bill  in  equity  of  the  character  mentioned  in 
this  section,  then,  as  regards  the  operation  of  the  Statute  of  Limitations  upon 
the  claim-   -o  sued  on,  tin;  time  elapsed  between  the  institution  of  said  abated 

359 


DIGEST    OF    INCORPORATION    ACTS.  —  MARYLAND. 

suits  and  the  time  of  such  plaintiff  or  plaintiffs  becoming  a  party  or  parties  to 
said  bill  in  equity,  shall  be  included  in  ascertaining  the  period  within  which 
suits  are  required  to  be  brought  by  the  said  Statute  of  Limitations,  the  costs 
taxable  to  any  plaintiff  or  plaintiffs  in  any  action  at  law  which  shall  be  abated 
under  the  provisions  of  this  section,  the  plaintiff  or  plaintiffs  in  which  action 
shall  become  a  party  or  parties  to  a  bill  in  equity,  under  the  provisions  of  this 
section  shall  become  a  part  of  the  costs  taxable  in  the  proceedings  in  said  equity 

case  (sec.  41  b). 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him,  signed  by  the  president  or  vice-president  and  by  the 
secretary  or  assistant  secretary,  treasurer  or  assistant  treasurer  of  the  cor- 
poration, and  sealed  with  its  seal.  Any  certificate  for  stock  which  is  restricted 
or  limited  as  to  its  transferability  or  voting  powers  or  which  is  preferred  or 
limited  as  to  its  dividends,  or  as  to  its  share  of  the  principal  upon  dissolution, 
shall  have  a  statement  of  such  restriction,  limitation,  or  preference  plainly 
stated  thereon  (sec.  33).  Title  to  a  certificate  and  to  the  shares  represented 
thereby  can  be  transferred  only 

(a)  By  delivery  of  the  certificate  endorsed  either  in  blank  or  to  a  specified 
person  by  the  person  appearing  by  the  certificate  to  be  the  owner  of  the  shares 
represented  thereby;    or 

(b)  By  delivery  of  the  certificate  and  a  separate  demand  containing  a  written 
assignment  of  the  certificate  or  a  power  of  attorney  to  sell,  assign  or  transfer 
the  same  or  the  shares  represented  thereby,  signed  by  the  person  appearing  by 
the  certificate  to  be  the  owner  of  the  shares  represented  thereby.  Said  assign- 
ment or  power  of  attorney  may  be  either  in  blank  or  to  a  specified  person. 

37  n.  A  creditor  whose  debtor  is  the  owner  of  a  certificate  shall  be  entitJed 
to  such  aid  from  courts  of  competent  jurisdiction,  by  injunction  and  otherwise 
in  attaching  said  certificate,  or  in  specifying  the  claim  by  means  thereof  as  is 
allowed  at  law  or  in  equity;  in  regard  to  property  which  cannot  readily  be  at- 
tached or  levied  upon  by  ordinary  legal  process. 

37  o.  There  shall  be  no  lien  in  favor  of  a  corporation  upon  the  shares  repre- 
sented by  the  certificate  issued  by  such  corporation,  and  there  shall  be  no  re- 
striction upon  the  transfer  of  shares  so  represented  by  virtue  of  any  by-law  of 
such  corporation  or  otherwise  unless  the  right  of  the  corporation  to  such  lien 
or  the  restriction  is  stated  upon  the  certificate  (Laws  of  1910,  chap.  73,  sec. 
37  a,  n,  and  o). 

15.  Preferred  Stock.  —  Every  corporation  may  create  two  or  more  classes 
of  stock  with  such  preferences,  voting  powers,  restrictions  and  qualifications 
thereof,  as  shall  be  expressed  in  the  certificate  of  incorporation  or  by  any 
amendment  to  its  charter  or  certificate  which  may  be  adopted.  Such  pre- 
ferred stock  may,  if  desired,  be  made  subject  to  redemption  at  not  less  than 
par  at  a  time  and  place  to  be  fixed  in  the  certificate  of  incorporation,  or  articles 
of  amendment,  and  it  may  be  provided  that  the  holders  thereof  shall  receive 
and  the  corporation  ■  shall  be  bound  to  pay  the  fixed  annual  dividends  to  be 
expressed  in  the  said  certificate  or  articles  of  amendment,  payable  quarterly, 
half  yearly,  or  yearly  before  any  dividends  shall  be  set  apart  for  or  paid  to  the 
holders  of  the  common  stock ;  such  dividends  may  be  made  cumulative,  and 
such  stock  may  be  preferred  over  the  common  stock  as  to  its  distributive  share 
of  the  assets  of  the  corporation  upon  dissolution;  but  in  case  of  insolvency 
the  debts  and  other  liabilities  of  the  corporation  shall  be  paid  before  the  holders 
of  said  preferred  stock  shall  receive  anything ;  nothing  in  the  laws  of  this  State 

360 


DIGEST    OF    INCORPORATION'    ACTS.  —  MARYLAND. 

shall  be  so  construed  as  to  limit  the  dividends  on  said  preferred  stock  to  six 
per  cent  per  annum,  if  greater  or  less  dividend  is  provided  to  be  paid  on  said 
stock  (sec.  34). 

16.  Payment  of  the  Capital  Stock.  —  Stock  may  be  issued,  whether  com- 
mon or  preferred,  either  for  cash  or  for  services  or  property  of  any  description, 
provided,  however,  that  such  services  are  rendered  to  or  adopted  by  said  cor- 
poration, or  for  property,  and  that  the  same  is  suitable  for  any  of  the  purposes 
for  which  the  corporation  was  formed,  provided  further  that  the  value  of  such 
services  and  property,  and  the  propriety  of  issuing  stock  therefor  shall  be  agreed 
upon  and  the  issue  authorized  by  the  affirmative  vote  of  a  majority  of  all  the 
stock  (both  common  and  preferred)  outstanding  entitled  to  vote,  given  at  any 
meeting  duly  called  as  provided  for  in  sections  15  and  16  of  the  Corporation  Act. 
Provided  further  that,  in  counting  the  majority  of  the  outstanding  stock  neces- 
sary to  authorize  the  issuance  of  stock  for  services  or  property,  no  stock  shall 
be  counted  whose  owner  or  holder  is  interested  in  such  services  or  property, 
or  no  stock  that  has  merely  been  subscribed  for  and  payment  for  which  is  to 
be  made  in  services. 

Whenever  the  stock  of  any  corporation  is  issued  for  services  or  property,  in 
accordance  with  the  preceding  section,  the  books  of  the  corporation  shall  be 
so  kept  as  to  show  at  all  times  fully  what  property  was  received,  and  what 
services  were  rendered  for  the  said  stock;  at  what  value,  and  the  number  of 
shares  issued  for  the  same.  Whenever  any  stock  is  issued  in  payment  for  ser- 
vices or  property  as  aforesaid,  a  certificate  signed  by  the  president  or  vice- 
president  and  secretary,  and  sworn  to  by  the  treasurer,  setting  forth  the  amount 
of  stock  so  issued,  and  the  property  or  services  in  payment  for  which  said 
stock  is  issued  and  particularly  specifying  the  nature  and  character  of 
such  property  or  services,  shall,  within  thirty  days  after  the  issue  of  said 
stock,  be  filed  in  the  office  of  the  clerk  of  the  Circuit  Court  for  the  county  in 
which  the  principal  office  of  the  corporation  is  located  (or  of  the  clerk  of  the 
Superior  Court  of  Baltimore  City,  if  such  principal  office  is  located  in  Baltimore 
City),  and  any  officer  or  director  of  such  corporation  wilfully  and  knowingly 
authorizing  or  consenting  to  the  failure  to  so  file  such  a  certificate  within  thirty 
days  from  the  issue  of  said  stock,  or  wilfully  and  knowingly  making  or  con- 
senting to  any  false  statement  contained  in  the  entries  required  by  this  section 
to  be  made  on  the  books  of  the  corporation,  or  of  said  certificate,  shall  be 
deemed  guilty  of  a  misdemeanor,  and  upon  conviction  shall  be  subject  to  the 
pains  and  penalties  described  by  section  134  of  Article  27  of  the  said  Code  of  1904  ; 
provided,  however,  that  the  valuation  placed  by  the  stockholders  upon  such 
services  or  property  at  the  meeting  duly  warned,  as  aforesaid,  and  the  pro- 
priety of  their  action  in  accepting  the  same  and  issuing  the  agreed  number  of 
shares  therefor,  shall,  in  the  absence  of  actual  fraud,  be  conclusive  against  and 
binding  upon  any  and  all  creditors  of  the  corporation  (sec.  36). 

17.  Books.  —  The  books  of  every  corporation  of  this  State,  including  such 
books  as  show  the  names  of  the  stockholders  thereof,  and  their  places  of  resi- 
dence and  the  number  of  shares  held  by  them,  shall,  during  the  usual  business 
hours  of  every  business  day,  be  open  for  t  he  inspection  of  any  person  or  persons 
holding  in  the  aggregate  five  per  cent  of  the  outstanding  capital  stock,  or  five 
per  cent  of  any  class  thereof,  if  two  or  more  classes  have  been  issued,  at  its 
principal  office  in  this  State;  every  officer  or  agent  of  any  such  corporation 
who  shall  refuse  to  exhibit  the  same  shall  be  guilty  of  a  misdemeanor,  and  the 
corporation  shall  forfeit  and  pay  to  the  stockholder  demanding  .such  inspec- 

361 


DIGEST    OF   INCORPORATION   ACTS. — MARYLAND. 

tion  the  sum  of  $50  for  every  such  refusal  (sec.  48).    The  directors  are  re- 
quired to  keep  a  full  and  fair  account  of  every  transaction  (sec.  49). 

18.  Office.  —  Every  corporation  must  maintain  its  principal  office  within 
the  State  (sec.  3,  subdivision  d). 

19.  Reports.  —  Noannual  reports  (aside  from  those  required  by  the  tax  law) 
are  exacted  of  domestic  corporations.  The  directors  of  every  business  corporation 
are  required  annually  to  prepare  a  full  and  true  statement  of  the  affairs  of  the 
corporation,  which  shall  be  submitted  at  the  annual  meeting  of  stockholders. 

If  any  person  or  persons  owing  in  the  aggregate  five  per  cent  of  the  out- 
standing capital  stock  of  any  corporation  of  this  State  (or  five  per  cent  of  any 
class  of  such  stock,  if  two  or  more  classes  have  been  issued)  shall  present  to  the 
president  or  treasurer  a  written  request  for  a  statement  of  its  affairs,  it  shall 
be  his  duty  to  make  such  a  statement  under  oath,  embracing  a  particular  ac- 
count of  its  assets  and  liabilities  in  detail,  and  to  have  the  same  ready  and  on 
file  at  the  principal  office  of  the  corporation  within  twenty  days  after  the 
presentation  of  such  request.  And  such  statement  shall  at  all  times  during 
business  hours  be  open  to  the  inspection  of  any  stockholder,  and  he  shall  be 
entitled  to  copy  the  same.  And  if  such  president  or  treasurer  to  whom  such 
request  thall  be  delivered,  shall  neglect  to  file  such  statement,  he  shall  forfeit  and 
pay  to  the  person  presenting  the  request  the  sum  of  $50  for  each  and  every 
day's  delay;  and  if  he  shall  refuse  to  permit  any  stockholder  to  inspect  such 
statement  and  copy  the  same,  he  shall  forfeit  and  pay  to  such  stockholder  the 
sum  of  $50  for  each  and  every  refusal  (sec.  47). 

As  to  taxation  of  corporations  and  reports  in  connection  therewith  see 
Code,  Art.  81. 

20.  Anti-Trust  Statute. — There  is  no  anti-trust  statute  in  Maryland. 
Under  the  Constitutional  declaration  of  rights,  section  41,  it  is  declared  that 
monopolies  are  odious,  contrary  to  the  spirit  of  a  free  government  and  the 
principles  of  commerce,  and  should  not  be  suffered. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Whenever  any 
domestic  corporation,  other  than  a  railroad,  shall  be  determined  by  legal  pro- 
ceedings to  be  insolvent,  or  shall  be  proven  to  be  insolvent  by  proof  offered 
under  any  bill  filed  under  the  provisions  of  this  section,  it  may  be  dissolved 
after  hearing  according  to  the  practice  of  courts  of  equity  in  the  county  or 
city  in  which  its  principal  office  is  located.  Such  bill  may  be  filed  by  any  stock- 
holder or  creditor  of  the  corporation  (sec.  53). 

The  charter  may  also  be  forfeited  for  such  misuse,  abuse,  or  non-use  of  its 
powers  and  franchises  as  would  by  law  make  proper  the  forfeiture  of  its  charter 
(sees.  57-61). 

If  any  corporation  shall  fail  or  neglect  to  pay  the  bonus  or  organization 
tax  provided  for  by  law  to  the  treasurer  of  the  State,  for  the  space  of  two  months 
after  the  same  has  been  due  and  payable,  it  then  becomes  the  duty  of  the 
comptroller  to  make  out  said  account  and  to  cause  suit  to  be  brought  for  the 
recovery  of  such  bonus.  If  after  suit  brought  and  judgment  rendered,  any 
corporation  from  which  said  bonus  or  organization  tax  shall  be  due  shall  con- 
tinue in  arrears,  and  shall  fail  to  neglect  to  pay  said  bonus  or  organization  tax 
to  the  State  treasurer  for  the  space  of  two  years  after  the  same  shall  be  so  in 
arrears,  such  failure  and  neglect  shall  be  deemed  to  amount  to  and  shall  con- 
stitute a  forfeiture  of  the  charter  of  such  corporation,  and  said  charter  shall 
be  decreed  to  be  so  forfeited  and  annulled,  ipso  fact  (Code,  Art.  81,  sec.  101). 

22.  Amendments.  —  Every  corporation  of  this  State  now  existing  or  here- 

362 


DIGEST    OF    INCORPORATION   ACTS.  —  MARYLAND. 

after  formed  may,  from  time  to  time,  at  any  meeting  duly  warned  as  provided 
for  by  sections  15  and  16  of  this  article,  by  the  affirmative  vote  of  a  majority 
of  all  its  members  or  a  majority  of  all  its  stock  (or  if  two  or  more  classes  of 
stock  have  been  issued,  of  a  majority  of  each  class),  outstanding  and  entitled 
to  vote,  amend  its  charter -or  certificate  of  incorporation,  and  thereby  accom- 
plish any  one  or  more  of  the  following  objects:  The  addition  to  or  diminution 
of  the  corporate  powers  and  purposes,  or  the  substitution  of  other  powers  and 
purposes  in  whole  or  in  part  for  those  prescribed  by  any  charter  or  certificate; 
provided  that  such  additional  or  substituted  powers  are  such  as  are  authorized 
by  this  article ;  the  changing  of  the  corporate  name ;  the  changing  of  the  cor- 
porate business;  the  increasing  or  decreasing  of  the  capital  stock  and  the 
classification  of  any  increase ;  the  reduction  of  the  number  of  outstanding 
shares:  the  classification  of  any  unissued  part  of  the  authorized  capital  stock; 
and  the  changing  of  the  location  of  the  principal  office  (sec.  24). 

Articles  of  amendment,  signed,  and  acknowledged  in  the  same  manner  as 
in  the  original  certificate,  by  the  president  and  a  majority  of  the  directors, 
managers,  or  trustees  shall  within  thirty  days  after  such  meeting  be  prepared, 
setting  forth  such  amendment  and  the  particulars  thereof,  and  stating  that  it 
has  been  duly  adopted  by  the  stockholders  or  members;  but  no  amendment 
shall  take  effect  until  the  articles  have  been  duly  executed  and  delivered  to 
the  State  tax  commissioner  with  the  recording  fees  (to  be  charged  at  the  same 
rates  and  by  said  commissioner  divided,  accounted  for,  and  paid  over,  as  in  the 
case  of  an  original  certificate).  Articles  of  amendment  shall  be  promptly  re- 
corded by  the  State  tax  commissioner,  and  when  recorded  the  original  or  a 
certified  copy  thereof  shall  be  sent  by  him  for  recording  to  the  clerk  of  the 
Circuit  Court  or  Superior  Court  as  is  hereinabove  provided  for,  in  the  case  of 
an  original  certificate;  and  a  duly  certified  copy  of  such  articles  of  amend- 
ment from  the  records  of  the  State  tax  commissioner  or  of  the  Circuit  or 
Superior  Court  shall  be  prima  facie  evidence  of  the  rights  and  powers  of  the 
corporation  as  amended  (sec.  25). 

If  any  increase  of  the  capital  stock  of  any  corporation  shall  have  been  duly 
authorized  as  in  section  24  provided,  the  articles  of  amendment  shall  also  set 
forth,  (a)  the  total  amounts  of  capital  stock  already  authorized  and  issued; 
(6)  the  amount  of  cash  paid  in  for  stock  already  issued,  and  the  amount  of  stock 
already  issued  for  property  or  services;  (c)  the  amount  of  additional  stock 
authorized;  (d)  and  the  classes,  if  any,  into  which  the  additional  stock  is  to 
be  divided,  with  the  preferences,  voting  powers,  restrictions,  and  qualifica- 
tions of  the  increased  shares  (sec.  26). 

If  a  reduction  of  the  capital  stock  shall  have  been  duly  authorized,  as  in 
section  24  provided,  the  articles  of  amendment  shall  also  set  forth:  (a)  the  total 
amounts  of  capital  stock  authorized  and  issued;  (6)  the  amount  of  the  reduc- 
tion and  the  manner  in  which  it  shall  be  effected ;  (c)  the  copy  of  the  resolu- 
tion authorizing  the  reduction,  but,  except  as  provided  in  the  next  succeeding 
section,  no  corporation  shall  be  entitled  to  reduce  its  capital  stock  until  the 
amount  of  its  unsecured  debts  and  liabilities  shall  be  so  far  paid  and  satisfied 
as  not  to  exceed  the  amount  to  which  the  capital  stock  shall  be  reduced 
(sec.  27). 

When  the  capital  stock  of  any  corporation  has  become  impaired  by  losses, 
the  outstanding  shares  may  be  reduced  to  an  amount  representing  their  true 
value  without  reducing  the  amount  of  capital  stock,  which,  by  its  charter  <>r 
certificate,  the  corporation  is  authorized  to  have ;  the  outstanding  certificates 

363 


DIGEST    OF   INCORPORATION   ACTS. — MARYLAND. 

may  be  called  in  and  new  certificates  issued  for  the  proportionate  number  of 
shares  as  reduced  to  the  persons  entitled  thereto;  and  the  stock  representing 
the  difference  between  the  authorized  issue  and  the  number  of  shares  as  re- 
duced may  be  reissued  without  thereby  increasing  the  capital  stock,  and  may 
be  classified  as  preferred  or  common.  If  such  reduction  in  the  number  of 
shares  shall  be  authorized  as  provided  in  section  24,  the  articles  of  amendment 
shall,  in  addition  to  the  requirements  of  section  25,  set  forth,  (a)  the  number  of 
shares  originally  authorized ;  (6)  the  number  of  shares  actually  issued  and 
outstanding;  (c)  the  number  of  shares  as  reduced;  (d)  the  classification,  if 
any,  of  the  stock  representing  the  difference  between  the  original  authorized 
issue  and  the  number  of  shares  as  reduced  (sec.  28). 

23.  Extension  of  Corporate  Existence.  —  Every  corporation  formed 
under  this  article  shall  have,  until  forfeiture,  the  right  of  perpetual  succession; 
and  all  provisions  in  the  charter  or  certificate  of  any  existing  corporation,  or 
imposed  upon  it  by  any  act  in  force  at  the  time  of  its  creation  or  formation, 
limiting  its  duration,  are  hereby  annulled  and  repealed  (sec.  75). 

24.  Dissolution.  —  Every  corporation  of  this  State  other  than  a  public 
service  corporation  may,  by  the  affirmative  vote  of  a  majority  of  all  of  its 
members  or  of  a  majority  of  all  of  its  stock  (or  if  two  or  more  classes  of  stock 
have  been  issued,  of  a  majority  of  each  class)  outstanding  and  entitled  to  vote, 
close  its  affairs  and  authorize  a  bill  for  its  dissolution  to  be  filed  in  the  manner 
hereinafter  set  forth.  The  meeting  for  such  purpose  shall  be  duly  warned  ac- 
cording to  the  provisions  of  sections  15  and  16  of  this  article ;  and  if  at  such 
meeting  the  said  majority  shall  so  decide,  a  petition  for  dissolution  shall  be 
forthwith  filed  in  the  name  of  the  corporation,  and  on  its  behalf  in  a  court  of 
equity  of  the  county  or  city  in  which  its  principal  office  is  located  (sec.  51). 

Every  such  petition  shall  contain  a  statement  of  the  reasons  why  the  dis- 
solution of  the  corporation  is  sought,  and  there  shall  be  filed  as  an  exhibit  with 
it,  a  full  and  true  inventory  of  its  assets  and  liabilities ;  a  list  of  all  the  stock- 
holders, if  any,  their  respective  addresses,  the  number  of  shares  belonging  to 
each,  and  the  amount,  if  any,  remaining  due  thereon;  a  full  statement  of  all 
the  incumbrances  on  the  property  of  the  corporation,  and  a  full  list  of  its  cred- 
itors, with  their  respective  addresses  and  the  amounts  due  each.  Such  ex- 
hibit shall  be  verified  by  the  oath  or  affirmation  of  some  officer  or  stockholder 
of  the  corporation,  and  upon  the  filing  of  such  petition  accompanied  by  the 
exhibit,  the  corporation  shall  pass  an  order  requiring  all  persons  interested  in 
the  corporation  to  show  cause  by  a  day  to  be  named,  if  any  they  have,  why  it 
should  not  be  dissolved  on  another  day  to  be  named  in  said  order,  which  said 
order  shall  be  published  for  such  time  as  the  court  shall  direct,  in  some  news- 
paper published  in  the  county  or  city  in  which  such  court  is  held,  if  an  answer 
shall  be  filed  to  such  petition,  evidence  shall  be  taken  in  the  manner  usual  in 
courts  of  equity ;  if  no  answer  is  filed,  or  if  upon  consideration  of  the  petition, 
answer  and  proof,  the  court  shall  be  of  opinion  that  no  sufficient  cause  against 
a  dissolution  has  been  shown,  a  decree  shall  be  entered  dissolving  the  said  cor- 
poration and  appointing  one  or  more  receivers  of  its  estate  and  effect,  if  any, 
and  any  of  the  directors  or  other  officers  or  any  of  the  stockholders  or  members 
of  the  corporation  may  be  appointed  its  receivers  or  such  other  person  or  per- 
sons as  the  court  may  select  (sec.  52) . 

Whenever  any  corporation  of  this  State,  other  than  a  railroad,  shall  have 
been  determined  by  legal  proceedings  to  be  insolvent  or  shall  be  proven  to  be 
insolvent  by  proof  offered  under  any  bill  filed  under  the  provisions  of  this  sec- 

364 


DIGEST    OF    INCORPORATION    ACTS.  —  MARYLAND. 

tion,  it  may  be  dissolved,  after  a  hearing  according  to  the  practice  of  the  courts 
of  equity  in  this  State,  upon  a  bill  for  that  purpose  hied  in  a  court  of  equity  of 
the  county  or  city  in  which  its  principal  office  is  located.  Such  bill  may  be 
filed  by  any  stockholder  or  creditor  of  the  corporation  (sec.  53). 

Whenever  any  corporation  shall  be  dissolved  by  the  decree  of  any  court  of 
this  State,  its  property  shall  vest  in  its  receivers  appointed  and  named  therein, 
and  all  preferences,  payments,  and  transfers,  howsoever  made  by  it  or  any  of 
its  officers  on  its  behalf,  which  would  be  void  or  fraudulent  under  the  provisions 
of  the  Insolvency  Laws  of  this  State,  if  made  by  a  natural  person,  shall  to  the 
like  extent  and  with  like  remedies  be  fraudulent  and  void;  and  for  the  pur- 
pose of  setting  aside  such  preferences,  payments,  and  transfers  the  receiver  of 
such  corporation  shall  have  all  the  powers  vested  in  the  permanent  trustee  of 
an  insolvent  debtor,  and  the  date  of  the  filing  of  the  petition  or  bill  by  or  against 
such  corporation  shall,  for  the  purpose  of  determining  the  validity  of  prefer- 
ences and  for  all  other  purposes,  be  treated  as  the  date  of  the  filing  of  the  peti- 
tion in  insolvency  by  or  against  a  natural  person ;  provided,  however,  that  if 
any  real  or  personal  property  of  such  corporation  shall  have  been  decreed  to 
be  sold  by  any  court  of  equity  for  the  enforcement  of  a  mortgage,  deed  of  trust, 
or  deed  of  trust  in  the  nature  of  a  mortgage ;  or  if  there  be  a  power  of  sale  or  a 
consent  to  a  decree  for  a  sale  contained  in  any  mortgage,  deed  of  trust,  or  deed 
of  trust  in  the  nature  of  a  mortgage  of  real  or  personal  property  made  by  such 
corporation,  then  (unless  with  the  written  consent  of  the  other  parties  in  in- 
terest) the  receiver  of  such  corporation  shall  be  authorized  to  sell  only  the 
equity  of  redemption  in  the  property  mentioned  in  such  decree,  mortgage, 
deed  of  trust,  or  deed  of  trust  in  the  nature  of  a  mortgage;  and,  unless  such 
consent  be  given,  such  decree  and  the  powers  of  sale  contained  in  such  mort- 
gage, deed  of  trust,  or  deed  of  trust  in  the  nature  of  a  mortgage,  may  be 
executed  as  if  proceedings  against  the  corporation  had  not  been  instituted 
(sec.  54). 

Upon  the  dissolution  of  any  corporation  of  this  State  in  any  manner  other- 
wise than  by  judicial  proceedings,  and  until  other  persons  shall  be  appointed 
as  receivers  by  some  court  of  competent  jurisdiction,  the  directors  at  the  time 
of  dissolution  shall  become  and  be  trustees  for  the  creditors,  stockholders,  and 
members  of  the  corporation  so  dissolved.  They  shall  take  title  to  its  assets, 
real  and  personal,  and  shall  have  full  power  to  wind  up  and  settle  its  affairs, 
to  sue  for  and  collect  its  assets,  and  to  pay  its  debts;  and  they  shall  divide 
among  the  stockholders  or  members  the  money  and  other  property  that  shall 
remain  after  the  payment  of  the  debts  and  necessary  expenses;  and  the  said 
trustees  shall  be  jointly  and  severally  liable  to  the  creditors,  stockholders,  and 
members  of  such  corporation  to  the  extent  of  its  property  and  effects  that 
shall  come  into  their  hands  (sec.  55). 

The  dissolution  of  a  corporation  shall  not  relieve  its  stockholders  or  directors 
or  other  officers  from  any  obligations  and  liabilities  imposed  on  them  by  law  ; 
nor  shall  it  abate  any  pending  suit  or  proceeding  by  or  against  the  corporation, 
and  all  such  suits  may  be  continued  with  such  change  of  parties,  if  any,  as  the 
court  in  which  the  same  are  pending  shall  direct.  No  receiver  shall  institute 
suit  except  by  order  of  the  court  appointing  him ;  and  such  suit  may  be  brought 
in  his  own  narn<-  as  receiver  or  (notwithstanding  its  dissolution)  in  the  name  of 
the  corporation  to  his  use  (sec.  56). 

25.  Annual  Franchise  Tax.  —  There  is  no  annual  franchise  tax  imposed 
in  the  case  of  business  corporations. 

365 


DIGEST    OF   INCORPORATION   ACTS. — MARYLAND. 

26.  Foreign  Corporations.  —  The  term  "foreign  corporation,"  as  used  in 
this  article,  shall  mean  every  corporation,  association,  or  organization,  other 
than  a  national  bank,  which  has  been  established,  organized,  or  chartered  under 
laws  other  than  those  of  this  State  (sec.  65). 

No  foreign  corporation  shall  engage  or  continue  in  any  kind  of  business  in 
this  State,  the  transaction  of  which  by  domestic  corporations  is  not  permitted 
by  the  laws  thereof.  And  every  foreign  corporation  doing  business  in  this 
State  shall  be  deemed  thereby  to  have  assented  to  all  the  provisions  of  the  laws 
thereof  (sec.  66). 

Every  officer  of  any  such  foreign  corporation  which  fails  to  comply  with 
the  proceedings  of  the  preceding  section,  and  every  agent  of  such  non-complying 
corporation  who  transacts  business  for  it  in  this  State,  shall  be  guilty  of  a 
misdemeanor  and  liable  to  a  fine  of  two  hundred  dollars.  Such  failure  shall 
not  affect  the  validity  of  any  contract  made  with  such  non-complying  cor- 
poration, but  no  suit  shall  be  maintained  in  any  of  the  courts  of  this  State  by 
any  such  corporation  until  it  has  complied  with  the  requirements  of  this  ar- 
ticle (sec.  69). 

Every  foreign  corporation  which  has  a  usual  office  or  place  of  business  in 
this  State,  except  insurance  companies  hereinafter  provided  for,  but  including 
any  corporation  which  is  engaged  in  this  State  permanently  or  temporarily  and 
with  or  without  a  usual  place  of  business  therein,  in  the  construction,  altera- 
tion, erection,  or  repair  of  any  building,  bridge,  railroad,  railway,  or  structure 
of  any  kind,  shall,  before  doing  business  herein,  file  with  the  Secretary  of  State, 
who  shall  record  the  same,  (1)  a  certified  copy  of  its  charter  or  certificate  of 
incorporation ;  (2)  a  certificate  to  be  renewed  annually  before  the  first  day  of 
April  in  every  year,  subscribed  and  sworn  to  by  its  president  or  treasurer,  or  a 
majority  of  its  board  of  directors  and  accompanied  by  the  annual  fee  of  one 
dollar  for  recording  such  renewal  showing,  (a)  the  corporate  name;  (b)  the 
names  and  addresses  of  its  president,  treasurer,  secretary,  and  the  members  of 
its  board  of  directors;  (c)  its  principal  office  in  this  State  and  in  the  State  of 
incorporation;  (d)  the  amount  of  its  capital  stock  authorized  and  issued,  the 
number  and  par  value  of  the  shares  and  the  amount  paid  in  thereon  and  the 
names  and  addresses  of  its  shareholders  in  this  State,  and  the  number  of  shares 
held  by  each,  and  the  amount  of  its  capital  employed  in  this  State;  (e)  the 
name  and  address  of  its  agent  resident  in  this  State,  and  authorized  to  accept 
service  of  process  upon  it;  and  (/)  its  willingness  that  so  long  as  any  liability 
remains  outstanding  against  it  in  this  State,  the  authority  of  such  agent  shall 
continue  until  a  substitute  is  appointed  and  certified  to  the  Secretary  of  State. 
At  the  time  of  filing  the  original  papers  required  by  this  section  every  such 
foreign  corporation  shall  pay  to  the  Secretary  of  State  for  the  use  of  the  State 
a  fee  of  $25,  upon  receipt  of  which  he  shall  issue  to  it  the  certificate  setting 
forth  that  it  is  entitled  to  do  business  in  this  State,  and  for  all  such  fees  said 
Secretary  of  State  shall  account  quarterly  to  the  comptroller  and  pay  the  same 
forthwith  to  the  State  treasurer  for  the  use  of  the  State,  less  the  costs  and  ex- 
penses of  recording  the  same  (sec.  68). 

Any  person  or  corporation  whether  a  resident  or  a  non-resident  of  this 
State,  may  sue  any  foreign  corporation  regularly  doing  business  or  regularly 
exercising  any  of  its  franchises  herein  for  any  cause  of  action.  Such  a  suit  may 
be  brought  in  any  county  or  in  the  city  of  Baltimore,  as  the  case  may  be,  where 
its  principal  office  in  this  State,  named  in  the  certificate  provided  for  by  the 
next  succeeding  section  of  this  article,  is  located,  or  where  it  regularly  transacts 

366 


DIGEST   OF   INCORPORATION   ACTS. MARYLAND. 

business  or  exercises  its  franchises,  or  in  a  local  action,  where  the  subject  matter 
thereof  lies;  and  a  corporation  acting  as  surety  may  be  sued  wherever  a  similar 
corporation  of  this  State  could  be  sued  under  the  provisions  of  section  62  of  this 
article.  Process  may  be  directed  to  the  sheriff,  constable,  or  other  proper  officer 
of  any  county  or  of  the  city  of  Baltimore,  returnable  to  the  clerk  of  the  court 
out  of  which,  or  to  the  justice  of  the  peace  by  which,  the  same  was  issued,  and 
may  be  served  as  follows:  if  such  corporation  has  a  resident  agent  authorized 
and  prepared  to  accept  service  as  provided  by  section  68  of  this  article,  such  pro- 
cess shall  be  served  upon  him.  If  the  corporation  has  no  resident  agent  so  author- 
ized and  prepared,  process  may  be  served  (subject  to  the  special  provision  for 
insurance  companies  and  fraternal  beneficiary  societies,  orders  or  associations 
hereinafter  mentioned)  upon  any  president,  manager,  director,  ticket  agent,  or 
officer  of  the  corporation,  or  upon  any  agent  or  other  person  in  its  service.  In 
all  cases,  however,  a  copy  of  the  process  shall  be  left  with  the  person  upon 
whom  it  is  served;  and  where  process  is  served  upon  any  person  other  than 
the  resident  agent,  president,  director,  or  other  officer  of  the  corporation,  a 
copy  of  the  process  shall  also  be  left  at  its  principal  office  in  this  State,  if  there 
be  one  named  as  aforesaid.  If  any  foreign  corporation  shall,  after  incurring 
liability  in  this  State  or  after  making  any  contract  with  a  resident  thereof, 
cease  to  do  business  or  have  such  resident  agent  or  a  president,  director,  manager, 
or  other  officer  herein,  then  and  in  such  case  suit  im  be  brought  in  the  county 
or  city  in  which  the  plaintiff  resides,  and  process  may  be  served  upon  any  per- 
son in  this  State  who  was  last  a  resident  agent,  president,  director,  manager, 
or  other  officer  of  such  corporation  in  this  State;  provided,  however,  that  a 
copy  of  such  process  shall  also  be  served  on  the  president  or  some  director 
of  such  foreign  corporation  wherever  he  may  be  found,  and  an  affidavit  of  sucli 
service  may  be  made  by  the  person  serving  the  same  (whether  he  be  a  resident 
or  a  non-resident  of  this  State)  before  any  officer  authorized  by  the  laws  of  this 
State  to  take  the  acknowledgment  of  deeds  to  be  recorded  therein.  And  the 
affidavit  showing  such  service  and  the  time  thereof  shall  be  returned  to  the 
court  in  which  the  suit  against  such  foreign  corporation  is  pending.  Nothing 
herein  shall  prevent  or  affect  the  issue  of  attachments  against  foreign  corpora- 
tions as  now  or  hereafter  allowed  by  law  (sec.  67).  (See  Crooks  v.  Girard  Iron 
Co.,  87  Md.  139.) 

Any  corporation  not  chartered  by  the  laws  of  this  State,  which  shall  trans- 
act business  therein,  shall  be  deemed  to  hold  and  exercise  franchises  within 
this  State,  and  shall  be  liable  to  suit  in  any  of  the  courts  of  this  State  on  any 
dealings  or  transactions  therein,  and  also  shall  be  liable  to  suit  in  any  of  the 
courts  of  this  State,  or  any  controversy  which  may  arise  between  such  cor- 
poration and  any  resident  of  this  State  (Laws  of  1908,  chap.  309). 

Every  foreign  corporation,  except  railroad  companies,  telegraph  or  cable 
companies,  express  or  transportation  companies,  oil  or  pipe  line  companies, 
title  insurance  companies,  electric  light  or  gas  companies,  guano,  phosphate, 
or  fertilizer  companies,  electric  construction  companies,  telephone  companies, 
parlor  car  or  sleeping  car  companies,  safe  deposit  companies,  trust  companies, 
national  banks,  life,  fire,  marine,  casualty,  and  other  insurance  companies,  anil 
guarantee  and  fidelity  companies,  or  any  corporation  paying  a  gross  receipt 
tax,  which  maintains  an  office  and  regularly  exercises  its  franchises  in  this 
State,  shall,  at  the  time  of  filing  its  annual  certificate,  to  wit:  before  the  1st  day 
of  April  in  each  year,  pay  to  the  State  treasurer  for  the  use  cf  the  State  a  fran- 
chise tax  for  such  year  at  the  following  rate,  that  is  to  say,  the  sum  of  $25  for 

307 


DIGEST    OF   INCORPORATION   ACTS. — MARYLAND. 

every  full  $50,000  of  capital  employed  by  it  in  this  State  up  to  $500,000  — 
but  in  no  case  less  ttian  $25 ;  if  the  amount  of  such  capital  is  more  than 
$500,000,  and  not  more  than  $5,000,000,  then  an  additional  amount  equal  to 
one-fortieth  of  one  per  cent  on  the  excess ;  and  if  more  than  $5,000,000,  then 
an  additional  amount  at  the  fate  of  $30  for  every  $1,000,000  of  such  last-named 
excess  (sec.  70). 

If  the  annual  certificate  and  tax  shall  not  be  filed  and  paid  as  required  by 
the  preceding  sections,  then  on  the  1st  day  of  November  following  the  comp- 
troller shall  place  the  tax  bill  in  the  hands  of  the  attorney-general  for  collection 
by  suit ;  and  the  officers  and  agents  shall  be  liable  to  the  penalty  imposed  by 
section  69  of  this  article. 

For  license  tax  to  be  paid  by  telegraph  or  express  or  transportation  com- 
panies, see  Code,  Art.  16,  sees.  119,  120,  and  121.  For  license  tax  to  be  paid  by 
domestic  corporations  doing  business  as  surety  or  guarantor  on  bonds  of  any 
kind,  or  the  business  of  issuing  policies  of  any  kind  of  insurance,  except  life, 
fire,  and  marine  policies,  and  except  industrial  insurance,  see  sees.  170,  171,  176, 
and  177 ;  and  for  license  to  be  paid  by  foreign  corporation  doing  special  lines 
of  business,   see  sec.  174. 


368 


DIGEST    OF    INCORPORATION    ACTS.  —  MASSACHUSETTS. 


MASSACHUSETTS. 

(The  references  cited  below  are  to  the  Laws  of  1903,  chap.  437,  commonly  known  as  the 
"Business  Corporation  Law.") 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
Under  the  act  that  went  into  effect  August  1,  1901-5,  parties  may  incorporate  for 
any  lawful  purpose  not  covered  by  special  act.  Special  acts  are  provided  for 
banking,  trust,  surety,  safe  deposit,  insurance,  railway,  street  railway,  tele- 
graph, telephone,  gas,  electric  light,  heat,  power,  canal,  aqueduct,  cemetery, 
and  crematory  companies  (sec.  70,  as  amended  by  Acts  of  1906,  chap.  286;  Acts 
of  1910,  chap.  395).  The  corporate  existence  of  real  estate  corporations  is 
limited  to  fifty  years  (Acts  of  1912,  chap.  595). 

2.  Incorporators. — There  must  be  at  least  three  incorporators.  There 
are  no  residential  requirements  (sec.  7). 

Walworth  v.  Brackett,  98  Mass.  98. 

3.  Articles  of  Association. — The  incorporators  should  first  prepare 
and  sign  an  agreement  of  association,  stating  (a)  that  the  subscribers 
thereto  associate  themselves  together  with  the  intention  of  forming  a  cor- 
poration. The  agreement  should  also  set  forth  (6)  the  corporate  name  to 
be  assumed,  (c)  the  location  of  the  principal  office  of  the  corporation  in 
the  Commonwealth  and  elsewhere,  if  the  corporation  is  organized  to  do  busi- 
ness wholly  outside  of  the  Commonwealth.  In  addition  to  the  foregoing  the 
agreement  should  also  set  forth  (d)  the  purposes  for  which  the  corporation 
is  formed,  the  nature  of  the  business  to  be  transacted,1  (e)  total  amount  of 
authorized  capital  stock  of  the  corporation  not  to  be  less  than  $1,000,  par  value 
of  the  shares  not  to  be  less  than  $5,  and  the  number  of  shares  into  which  the 
capital  stock  is  to  be  divided,  and  the  restrictions  if  any  imposed  upon  its 
transfer.  If  there  are  more  than  two  classes  of  stock,  a  description  of  the  classes 
and  a  statement  of  the  terms  upon  which  they  are  to  be  created  and  the  method 
of  voting  thereon.  (/)  If  desired,  provisions  may  be  inserted  for  the  conduct 
and  the  regulation  of  the  business  of  the  corporation,  for  its  voluntary  dissolu- 
tion, or  for  limiting  or  defining  or  regulating  the  powers  of  the  corporation  or 
of  its  directors  or  stockholders,  (t/)  The  subscribers  by  whom  the  first  meet- 
ing of  the  corporation  is  to  be  called  must  be  stated,  or,  in  lieu  thereof,  the 
notice  of  said  meeting  is  waived  in  writing  by  each  of  the  incorporators,  (h) 
There  must  also  appear  the  names  and  residences  of  the  incorporators,  and  the 
amount  of  stock  subscribed  for  by  each.  The  meeting  should  then  be  held, 
whereat  a  chairman  and  temporary  clerk  should  be  chosen.  The  clerk  should 
be  forthwith  sworn.  After  by-laws  have  been  adopted  the  incorporators  must 
proceed  to  the  election  of  directors,  a  treasurer,  clerk,  and  such  other  officers 
as  the  by-laws  may  prescribe.  A  majority  of  the  directors  must  forthwith 
make,  sign,  and  make  oath  to  the  articles  of  organization  (for  contents  of  arti- 
cles of  organization  see  sec.  4,  post).  The  articles  of  organization  and  the  records 
of  the  first  meeting  of  incorporators  must  be  submitted  to  the  commissioner 
of  corporations  for  examination,  and  he  may  require  such  amendments  1  hereof 
and  such  additional  information  as  lie  may  think  necessary.  If  he  finds  the 
articles  conform  to  the  provision    of  l  he  statute,  he  shall  so  certify  and  endorse 

1  The  Secretary  of  Stale  permit s  t  ho  insertion  of  any  number  of  purposes  in  the  articles 
of  association  not  covered  by  special  act. 

•  24  3G!) 


DIGEST    OF   INCORPORATION   ACTS.  —  MASSACHUSETTS. 

his  approval  thereon.  Thereupon  the  articles  shall,  upon  payment  of  the  organ- 
ization tax,  be  filed  for  record  in  the  office  of  the  Secretary  of  State  of  the  Com- 
monwealth, who  will  issue  a  certificate  of  incorporation.  The  corporate  existence 
commences  upon  the  filing  of  the  articles  of  organization  in  the  office  of  the 
Secretary  of  the  Commonwealth.  The  certificate  of  incorporation  or  a  certified 
copy  thereof  is  conclusive  evidence  of  the  existence  of  the  corporation  (sees.  8, 
9,  10,  11,  12). 

Bird  v.  Daggett,  97  Mass.  494. 

4.  Contents  of  the  Articles  of  Organization.  — The  articles  of  organi- 
zation must  set  forth :  (a)  A  true  copy  of  the  agreement  of  association,  and 
the  names  of  the  subscribers  thereto.  (6)  The  date  of  the  first  meeting  and  all 
adjournments  thereof,  if  any.  (c)  Amount  of  capital  stock  to  be  issued,  the 
amount  thereof  to  be  paid  for  in  cash,  by  instalments,  and  the  instalment  to 
be  paid  before  the  corporation  commences  business,  and  the  amount  thereof 
to  be  paid  for  in  property.  If  such  property  consists  in  part  of  real  estate, 
its  location  and  the  amount  of  stock  to  be  issued  therefor  shall  be  stated.  If 
any  part  of  such  property  is  personal,  it  shall  be  described  in  such  detail  as  the 
commissioner  of  corporations  may  require,  and  the  amount  of  stock  to  be  issued 
therefor  shall  be  stated.  If  any  part  of  the  capital  stock  is  issued  for  services 
or  expenses,  the  nature  thereof  and  the  amount  of  stock  which  is  issued  there- 
for shall  be  stated,  (d)  The  name,  residence,  and  post-office  address  of  each 
of  the  officers  of  the  corporation  (sec.  11). 

5.  Corporate  Name.  —  The  name  used  shall  indicate  that  it  is  a  corpora- 
tion as  distinguished  from  a  natural  person  or  partnership.  It  is  forbidden  to 
use  the  name  of  another  domestic  corporation  or  of  a  foreign  corporation,  or 
of  any  partnership  or  association  carrying  on  business  in  the  Commonwealth 
at  the  time  of  such  organization  or  within  three  years  prior  thereto,  or  a  name 
so  similar  thereto  as  to  be  liable  to  be  mistaken  for  it,  except  with  the  consent 
in  writing  of  said  corporation,  association,  or  partnership.  Courts  are  given  ex- 
press jurisdiction  in  equity  to  enjoin  the  illegal  use  of  the  corporate  name  (sec.  5). 

B.  R.  Co.  v.  Company,  149  Mass.  436;  21  N.  E.  875. 

6.  Statutory  Powers.  —  In  addition  to  the  enumeration  of  common  law 
powers  of  corporations,  the  statute  grants  to  corporations  a  number  of  extraor- 
dinary powers  which  may  be  enumerated  as  follows :  To  have  perpetual  suc- 
cession ;  to  insert  in  the  agreement  of  association  rules  for  the  regulation  of  the 
internal  affairs  of  the  corporation ;  to  appoint  an  executive  committee  from 
its  board  of  directors,  to  whom  may  be  delegated  the  management  of  the  current 
and  ordinary  affairs  of  the  corporation.  The  act  expressly  forbids  a  corporation 
to  vote  upon  any  share  of  its  own  stock.  It  authorizes  corporations  to  vote 
by  proxy,  to  forfeit  shares  for  non-payment  of  assessments,  to  issue  preferred 
stock,  and  to  classify  directors  (sees.  4,  16,  19,  23,  24;  Acts  of  1903,  chap.  423; 
Acts  of  1912,  chap.  175). 

Commonwealth  v.  Railway,  142  Mass.  146;  7  N.  E.  716;  McNeil  v.  Boston  Chamber  of 
Commerce,  154  Mass.  277;  28  N.  E.  245;  S.  W.  Co.  v.  Lamb,  143  Mass.  420;  9  N.  E.  823; 
French  v.  Company,  145  Mass.  261;  14  N.  E.  113;  Kelly  v.  Biddle,  180  Mass.  147;  61  N.  E. 
821 ;   U.  W.  Co.  v.  Stone,  127  Fed.  587. 

7.  Corporate  Indebtedness.  —  There  is  no  limit  to  the  amount  of  cor- 
porate indebtedness  in  Massachusetts. 

8.  Organization  Tax.  —  The  organization  tax  is  one-twentieth  of  one  per 
cent  (50  cents)  on  each  one  thousand  dollars  of  authorized  capital  stock,  except 
that  in  uo  case  shall  it  be  less  than  $25  (Acts  of  1907,  chap.  396). 

370 


DIGEST    OF    INCORPORATION    ACTS.  —  MASSACHUSETTS. 

9.  Filing  and  Recording  Fees. — There  are  no  filing  or  recording  fees 
due  the  Secretary  of  State  other  than  the  payment  of  the  organization  tax. 
The  charge  for  issuing  certified  copy  of  certificate  of  incorporation  is  $1.  The 
charge  for  filing  and  recording  amendments  to  articles  of  incorporation  is  $5, 
except  in  the  case  of  increase  of  capital  stock.  The  charge  for  fifing  annual 
certificate  of  condition  is  So. 

10.  Commencing  Business.  —  Aside  from  the  right  to  perfect  the  organ- 
ization of  the  corporation,  no  business  can  be  transacted  until  the  articles  of 
organization  have  been  approved  by  the  commissioner  of  corporations,  the  or- 
ganization tax  paid,  and  the  certificate  recorded  in  the  office  of  the  Secretary 
of  the  Commonwealth  (sec.  12).  Whenever  any  change  is  made  in  the  officers 
of  a  domestic  corporation,  the  corporation  shall  forthwith  file  in  the  office  of 
the  Commissioner  of  Corporations,  within  thirty  days  after  such  change  has 
been  made,  a  certificate  of  such  change,  signed  and  sworn  to  by  the  president, 
clerk,  and  a  majority  of  the  directors  (Act  of  April  6,  1907). 

Chase  Elevator  Co.  v.  Company,  152  Mass.  428;  28  N.  E.  300;  Hawes  v.  Anglo-Saxon 
Co.,  101  Mass.  385;    A.  M.  F.  Insurance  Co.  v.  Jesser,  87  Mass.  446. 

11.  Organization  Meeting.  — The  various  steps  necessary  to  procure  the 
organization  of  the  corporation  have  already  been  set  forth  in  sec.  3,  ante. 
The  organization  meeting  must  take  place  within  the  Commonwealth.  The 
statutory  officers  in  Massachusetts  are  a  president,  clerk,  and  treasurer  (sees.  9, 
10,  20). 

Packard  v.  Company,  168  Mass.  92;    46  N.  E.  433;    Walworth  v.  Brackett,  98  Mass.  98. 

12.  Meetings  of  Stockholders  and  Directors.  —  All  meetings  of  stock- 
holders must  be  held  within  the  State.  Directors'  meetings  may  be  held  with- 
out the  State  if  the  by-laws  so  provide  (sees.  20,  25;  Laws  of  1904,  chap.  207). 
There  must  be  an  annual  meeting  of  the  stockholders  held  within  ninety  days 
after  the  end  of  the  fiscal  year  of  the  corporation.  The  time,  place,  and  manner 
of  holding  and  conducting  said  meeting  shall  be  fixed  by  the  by-laws  (Acts  of 
1904,  chap.  207;  see  also  Acts  of  1912,  chap.  175). 

Sargent  v.  Webster,  54  Mass.  497. 

13.  Directors'  Qualifications,  Powers,  and  Liabilities,  a.  Quali- 
fications. —  There  must  be  at  least  three  directors,  each  of  whom  must  be  a 
stockholder  unless  the  by-laws  otherwise  provide.  There  are  no  residential  re- 
quirements. The  president  of  the  corporation  must  be  elected  annually  by 
and  from  the  board  of  directors.  The  other  officers  are  elected  by  the  stock- 
holders. Directors  may  be  divided  into  classes  not  exceeding  five,  if  desired 
(sec.  18).  Under  the  statute  the  board  may  elect  from  its  members  an  executive 
committee,  to  whom  may  be  delegated  the  management  of  the  current  and 
ordinary  business  of  the  corporation  (sees.  17,  18,  19). 

b.  Liabilities.  —  Directors  who  make  oath  falsely  to  articles  of  organization 
are  jointly  and  severally  liable  to  any  stockholder  for  actual  damages  caused 
by  false  statements  therein  and  which  they  knew  to  be  false.  Also,  for  debts 
and  contracts  of  the  corporation  where  they  declare  or  assent  to  a  dividend 
when  the  corporation  is  or  thereby  is  rendered  bankrupt  or  insolvent,  to  the 
extent  of  such  dividend.  Also,  for  debts  contracted  between  the  time  of  making 
or  assenting  to  a  loan  to  the  directors  and  the  time  of  its  repayment,  to  the 
extent  of  such  loan  unless  they  voted  against  such  dividend  <>r  the  paying  <>f 
such  loan  (sees.  34,  35).  No  director  can  be  held  liable  for  ils  debts  or  con- 
tracts uidess  the  corporation  has  been  duly  adjudicated  bankrupt  or  unless  a 

371 


DIGEST    OF    INCORPORATION    ACTS. MASSACHUSETTS. 

judgment  has  been  recovered  against  it  and  it  has  neglected  for  thirty  days  after 
demand  made  upon  it  to  pay  the  amount  due  (sees.  14,  36.  As  to  liability  for 
making  political  contributions,  see  Acts  of  1908,  chap.  483;  Acts  of  1911,  chap. 
428).  An  officer  of  a  mining  corporation  who  makes  false  statement  knowing 
the  same  to  be  false,  in  any  application  to  any  stock  exchange  to  sell  the  shares 
of  such  corporation  shall  be  punished  by  a  fine  not  exceeding  five  hundred  dol- 
lars or  by  imprisonment  for  not  more  than  two  years. 

No  officer,  agent,  clerk  or  servant  of  a  mining  corporation,  nor  any  person 
dealing  in  the  shares  of  such  corporation,  shall  cause  to  be  published  any  adver- 
tisements of  the  shares  of  such  corporation  in  which  any  statement  is  made  as 
to  the  value  of  the  property  of  the  corporation,  or  of  its  present  or  prospective 
earnings  or  of  a  prospective  increase  in  the  price  of  the  shares  unless  the  Presi- 
dent and  a  majority  of  the  directors  of  such  corporation  within  sixty  days  prior 
to  the  date  of  the  publication  of  such  advertisement  shall  have  filed  with  the 
Commissioner  of  Corporations  in  such  form  as  he  shall  prescribe  a  statement, 
under  oath,  of  the  financial  condition  of  the  corporation,  a  full  description  of  its 
property  and  a  statement  of  the  earnings,  if  any,  from  the  operation  of  the  same 
for  the  fiscal  year  next  preceding  the  date  of  the  fifing  of  such  statement  (Acts 
of  1911,  chap.  492,  sec.  1.    See  also  Acts  of  1912,  chap.  175). 

Cole  u.  Cassidy,  138  Mass.  437;  Felker  v.  Company,  148  Mass.  226;  19  N.  E.  220;  Wight 
v.  Company,  117  Mass.  226. 

14.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  the  debts  of 
the  corporation  in  any  event  to  the  extent  of  their  unpaid  stock  subscriptions. 
The  statute  also  provides  that  stockholders  who  vote  to  reduce  the  capital  stock 
of  the  corporation  contrary  to  law  shall  be  liable  for  the  payment  of  the  debts  and 
contracts  of  the  corporation  existing  at  the  time  of  such  reduction  to  the  extent 
of  the  amount  withdrawn.  Stockholders  are  also  liable  for  all  moneys  due  to 
operatives  for  services  rendered  within  six  months  before  demand  made  upon  the 
corporation  and  its  neglect  or  refusal  to  make  such  payment  (sees.  33,  36,  39; 
Acts  of  1911,  chap.  488). 

Hancock  National  Bank  v.  Ellis,  166  Mass.  414;  44  N.  E.  349;  Pettibone  v.  Company, 
148  Mass.  411 ;    19  N.  E.  337;   Stedman  v.  Eveleth,  47  Mass.  114;  Flint  v.  Pierce,  99  Mass.  68. 

15.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him,  signed  by  the  president  and  treasurer  (sec.  26.  See  as 
to  transfer  of  stock  Acts  of  1910,  chap.  171). 

Wyman  v.  Powder  Co.,  62  Mass.  168;  Sibley  v.  Bank,  133  Mass.  515. 

16.  Preferred  Stock.  —  One  or  more  kinds  of  stock  may  be  created  under 
such  terms  and  conditions  as  may  be  provided  for  in  the  agreement  of  associ- 
ation or  in  an  amendment  thereto  adopted  as  provided  by  statute  (sees.  27,  40). 

Am.  Tube  Works  v.  Machine  Co.,  139  Mass.  5;  29  N.  E.  63. 

17.  Payment  of  Capital  Stock.  —  Capital  stock  may  be  issued  for  cash, 
property,  services,  or  expenses.  If  it  is  paid  for  in  instalments,  this  fact  must 
be  set  forth  upon  the  certificate.  If  any  stock  be  issued  subsequent  to  the  issue 
of  stock  authorized  by  the  articles  of  association,  then  a  certificate  is  prepared 
within  thirty  days  after  the  date  when  said  stock  has  been  authorized,  and  is 
signed  and  sworn  to  by  the  president,  treasurer,  and  a  majority  of  the  directors, 
setting  forth:  (1)  Total  amount  of  capital  stock  authorized.  (2)  The  amount 
of  stock  already  issued  for  cash,  payable  in  instalments,  and  the  amount  paid 
thereon;  also  the  amount  of  full-paid  stock  already  issued  for  either  property, 
services,  or  expenses.    (3)  A  description  of  said  property  and  the  nature  of  said 

372 


DIGEST    OF    INCORPORATION    ACTS.  —  MASSACHUSETTS. 

services  or  expenses.  This  certificate  must  be  submitted  to  the  Commissioner 
of  Corporations.  If  he  finds  it  conforms  to  the  law,  he  shall  so  certify  and  en- 
dorse his  approval  thereon.  The  certificate  must  then  be  filed  in  the  office  of 
the  Secretary  of  the  Commonwealth,  who  upon  payment  of  the  proper  fee  shall 
cause  it  and  tlie  endorsement  thereon  to  be  recorded.  The  law  provides  that 
no  stock  shall  be  at  any  time  issued  unless  the  cash  or  property,  servict 
expenses  for  which  it  was  authorized  to  be  issued  has  Keen  actually  received  or 
incurred  by  or  conveyed  or  rendered  to  the  corporation,  and  the  president. 
treasurer,  and  directors  shall  be  jointly  and  severally  liable  to  any  stockholder 
of  the  corporation  for  actual  damages  caused  to  him  by  such  issue  (sec.  14). 

18.  Books.  —  The  clerk  is  required  to  keep  a  record  of  all  proceedings  of 
the  stockholders  and  board  of  directors.  The  corporation  is  required  to  keep 
a  stock  transfer  book  within  the  State.  These  books  are  open  to  the  inspection 
of  stockholders  at  all  times  (sec.  30). 

19.  Office  and  Clerk.  —  All  corporations  must  have  an  office  within  the 
State,  and  must  appoint  a  clerk  who  is  a  resident  of  the  Commonwealth  (sees. 
8,  18). 

20.  Reports.  —  Every  corporation  shall  annually  within  thirty  days  after 
the  date  fixed  by  the  by-laws  for  the  annual  meeting,  or  within  thirty  days 
after  the  final  adjournment  of  such  meeting,  prepare  a  report  of  the  condition 
of  the  company,  signed  and  sworn  to  by  its  president,  treasurer,  and  at  least 
a  majority  of  its  directors,  stating  the  name  of  the  corporation ;  location  of  its 
principal  office  in  the  Commonwealth  or  elsewhere  in  case  the  corporation  is 
organized  to  do  business  wholly  outside  of  the  Commonwealth ;  date  of  its  last 
preceding  annual  meeting ;  total  amount  of  its  authorized  capital  stock ;  amount 
due  and  outstanding  and  amount  then  paid  thereon ;  the  class,  or  classes,  if 
any,  into  which  it  is  divided;  the  par  value  and  number  of  its  shares;  names 
and  addresses  of  all  the  directors  and  officers,  and  the  date  on  which  the  term 
of  office  of  each  expires ;  statement  of  the  assets  and  liabilities  of  the  corpora- 
tion as  of  the  date  of  the  end  of  its  last  fiscal  year.  This  report  must  be  sub- 
mitted to  the  commissioner  of  corporations  for  his  approval  and  who  shall 
endorse  his  approval  thereon  if  in  conformity  with  the  law.  If  the  corporation 
has  a  capital  stock  of  8100,000  or  more,  it  shall  be  accompanied  by  a  written 
statement  of  the  affairs  of  such  corporation.  The  statement  of  the  auditor  of 
the  corporation's  books  must  be  filed  with  the  annual  report  in  the  office  of  the 
Secretary  of  State  (sees.  45-50,  Acts  of  1906,  chap.  34G;  Acts  of  1908,  chap. 
300;  Acts  of  1909,  chap.  326). 

In  addition  to  the  foregoing,  every  corporation  shall  annually,  between  the 
first  and  tenth  of  April,  make  a  return  to  the  tax  commissioner  under  oath  of 
its  treasurer,  stating  the  name  of  the  corporation  and  setting  forth  the  follow- 
ing as  of  the  first  day  of  April  of  the  year  in  which  the  return  is  made:  the 
total  amount  of  the  capital  stock  of  the  corporation,  amount  issued  and  out- 
standing, and  the  amount  then  paid  thereon;  classes  into  which  it  is  divided; 
par  value  of  shares;  number  of  its  shares,  and  their  market  value,  as  to  each 
class  of  shares,  if  there  are  two  or  more  classes;  statement  of  the  real  estate, 
machinery,  merchandise,  and  other  assets  belonging  to  the  corporation  within 
and  without  the  Commonwealth;  a  list  of  the  stockholders  of  the  corporation, 
their  residences,  the  amount,  and  class  of  stock  (if  more  than  one)  belonging 
to  each  (Acts  of  1911,  chap.  379).  If  stock  is  pledged,  the  name  and  residence  of 
the  pledgor  and  pledgee  must  be  given  (sees.  15  50  inclusive).  By  chap.  222  of 
Acts  of  1905,  if  by-laws  are  amended  making  a  change  in  the  date  of  the  annual 

373 


DIGEST    OF    INCORPORATION    ACTS. — MASSACHUSETTS. 

meeting,  the  commissioner  of  corporations  must  be  notified  thereof.  Whenever 
any  change  is  made  in  the  officers  of  a  domestic  corporation  the  corporation 
shall  forthwith  file  in  the  office  of  the  Commissioner  of  Corporations,  within 
thirty  days  after  such  change  has  been  made,  a  certificate  of  such  change,  signed 
and  sworn  to  by  the  president,  clerk,  and  a  majority  of  the  directors  (Act  of 
April  6,  1907). 

21.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute. 

22.  Annual  Franchise  Tax.  —  The  annual  franchise  tax  is  based  upon 
the  value  of  the  corporate  franchises.  This  tax  upon  the  value  of  the  corpo- 
rate franchises,  after  making  certain  deductions  enumerated  in  the  act,  shall 
necessitate  a  tax  levied  at  a  rate  equal  to  the  average  rate  in  all  cities  and 
towns  in  the  Commonwealth  during  the  same  year,  as  returned  by  the  assessors 
of  the  several  cities  and  towns  of  the  State,  upon  an  amount,  less  said  deduc- 
tions, not  exceeding  twenty  per  cent  in  excess  of  the  value  as  found  by  the 
tax  commissioner,  of  the  real  estate,  machinery,  merchandise,  and  securities, 
which,  if  owned  by  a  natural  person,  resident  of  the  Commonwealth,  would  be 
liable  to  taxation ;  and  the  total  amount  of  taxes  to  be  paid  by  such  corpora- 
tion in  any  year  upon  its  property  to  be  taxed  in  the  Commonwealth,  and 
upon  the  value  of  its  corporate  franchises,  shall  amount  to  not  less  than  one- 
tenth  of  one  per  cent  of  the  market  value  of  its  capital  stock  at  the  time  such 
assessment  is  made  by  the  tax  commissioner  (sees.  74,  76-87  inclusive).  The 
tax  becomes  due  and  payable  on  November  1st.  (See  also  Acts  of  1904, 
chaps.  225,  442;  Acts  of  1910,  chap.  270.  See  as  to  abatement  of  unpaid 
taxes,  Acts  of  1908,  chap.  220;  Acts  of  1912,  chap.  497.) 

23.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited  for  usurpation  of  franchises  or  privileges  not  conferred  by  law  (P.  S., 
chap.  186,  sec.  1724).  Also  for  failure  to  pay  annual  taxes  and  make  an- 
nual statements  for  two  successive  years  (sees.  49,  78 ;  Acts  of  1906,  chap. 
346). 

Russell  v.  M'Lellan,  14  Pick.  63. 

24.  Amendments.  —  Every  corporation  may,  at  a  meeting  duly  called  for 
that  purpose,  by  the  vote  of  a  majority  of  all  its  stock,  or,  if  two  or  more  classes 
of  stock  have  been  issued,  of  a  majority  of  each  class  outstanding  and  entitled 
to  vote,  authorize  an  increase  or  reduction  of  its  capital  stock  and  determine 
the  terms  and  manner  of  the  disposition  of  such  increased  stock,  may  authorize 
a  change  of  the  location  of  its  principal  office  or  place  of  business  in  this  Common- 
wealth, or  change  of  the  par  value  of  the  shares  of  its  capital  stock. 

It  may,  at  a  meeting  duly  called  for  the  purpose,  by  the  vote  of  two-thirds 
of  all  its  stock,  or,  if  two  or  more  classes  of  stock  have  been  issued,  of  two- 
thirds  of  each  class  of  stock  outstanding  and  entitled  to  vote,  or  by  a  larger 
vote  if  the  agreement  of  association  so  requires,  change  its  corporate  name, 
the  nature  of  its  business,  the  classes  of  its  stock  subsequently  to  be  issued 
and  their  voting  power,  or  make  any  other  lawful  amendment  or  alteration  in 
its  agreement  of  association  or  articles  of  organization,  or  sell,  lease,  or  ex- 
change all  its  property  and  assets,  including  its  good-will  and  its  corporate 
franchises,  upon  such  terms  and  conditions  as  it  deems  expedient. 

Articles  of  amendment,  signed  and  sworn  to  by  the  president,  treasurer, 
and  a  majority  of  the  directors,  shall  within  thirty  days  after  said  meeting  be 
prepared,  setting  forth  such  amendment  or  alteration,  and  stating  that  it  has 
been  duly  adopted  by  the  stockholders.     Such  articles  shall  be  submitted  to 

374 


DIGEST   OF   INCORPORATION   ACTS.  —  MASSACHUSETTS. 

the  commissioner  of  corporations,  who  shall  examine  them  in  the  same  man- 
ner as  the  original  articles  of  organization.  If  he  finds  that  they  conform  to 
the  requirements  of  law,  he  shall  so  certify  and  endorse  Ins  approval  thereon, 
and  they  shall  thereupon  be  filed  in  the  office  of  the  Secretary  of  the  Com- 
monwealth, who,  upon  payment  of  the  fees  hereinafter  provided,  shall  cause 
them,  and  the  endorsement  thereon,  to  be  recorded.  No  amendment  or  alter- 
ation of  the  agreement  of  association  or  articles  of  organization  shall  take 
effect  until  said  articles  of  amendment  shall  have  been  filed  in  the  office  of 
the  Secretary  of  the  Commonwealth  as  aforesaid. 

If  an  increase  in  the  total  amount  of  the  capital  stock  of  any  corporation 
shall  have  been  authorized  by  a  vote  of  its  stockholders  in  accordance  with 
the  provisions  of  sec.  40,  the  articles  of  amendment  shall  also  set  forth  (1)  the 
total  amount  of  capital  stock  already  authorized ;  (2)  the  amount  of  stock 
already  issued  for  cash  payable  by  instalments  and  the  amount  paid  thereon, 
and  the  amount  of  full-paid  stock  already  issued  for  cash,  property,  services,  or 
expenses ;  (3)  the  amount  of  additional  stock  authorized ;  (4)  the  amount 
of  such  stock  to  be  issued  for  cash,  property,  services,  or  expenses  respectively ; 
(5)  a  description  of  said  property  and  a  statement  of  the  nature  of  said  services 
or  expenses,  in  the  manner  required  by  the  provisions  of  sec.  11  of  the  act. 
All  corporations,  both  domestic  and  foreign,  must,  whenever  any  change  is  made 
altering  the  date  fixed  in  the  by-laws  for  the  annual  meeting,  file  in  the  office 
of  the  Commissioner  of  Corporations  a  certificate  of  such  change,  signed  and 
sworn  to  by  the  clerk  of  said  corporation  (Acts  of  1905,  chap.  222). 

Where  any  change  is  made  in  the  office  of  a  domestic  corporation  organized 
under  the  general  act,  there  must  be  filed  in  the  office  of  the  Commissioner  of 
Corporations  a  certificate  of  such  change,  signed  and  sworn  to  by  the  president, 
clerk,  and  a  majority  of  its  directors  (Acts  of  1907,  chap.  282;  Acts  of  190S, 
chap.  180). 

25.  Extension  of  Corporate  Existence.  — There  is  no  express  provision 
for  the  extension  of  corporate  existence.     (See,  however,  sec.  40.) 

26.  Dissolution.  —  By  a  majority  vote  of  all  classes  of  stock  entitled  to 
vote,  a  petition  for  dissolution,  to  be  addressed  to  the  courts  having  jurisdic- 
tion in  the  premises,  may  be  authorized  (sees.  51-55  inclusive;  Acts  of  1905, 
chap.  156). 

Stone  v.  Framingham,  109  Mass.  303;   Olds  v.  Company,  185  Mass.  500;   70  N.  E.  1022. 

27.  Foreign  Corporations.  —  Every  foreign  corporation  which  has  a 
usual  place  of  business  within  the  Commonwealth  or  which  is  engaged  therein 
permanently  or  temporarily,  and  with  or  without  the  usual  place  of  business 
therein,  in  the  construction,  erection,  alteration,  or  repair  of  buildings,  bridges, 
railroads,  or  structures  of  any  kind,  shall,  before  doing  business  in  this  Common- 
wealth, in  writing  appoint  the  Commissioner  of  Corporations  to  be  its  attorney 
upon  whom  all  lawful  process  may  be  served.  A  copy  of  the  power  of  attorney 
and  a  copy  of  the  vote  authorizing  its  execution,  duly  certified,  must  be  filed 
in  the  office  of  the  State  Corporation  Commissioner ;  also  a  certified  copy  of  its 
articles  of  association,  together  with  a  true  copy  of  its  by-laws,  and  a  certificate 
in  such  form  as  the  Commissioner  of  Corporations  may  require,  setting  forth 
the  name  of  the  corporation,  location  of  its  principal  office,  names  and  addresses 
of  its  president,  treasurer,  clerk,  or  secretary,  and  the  members  of  its  board 
of  directors,  date  of  its  annual  meeting  for  the  election  of  officers,  amount  of 
its  capital  stock  authorized  and  issued,  number  and  par  value  of  its  shares 

375 


DIGEST    OF   INCORPORATION    ACTS. — MASSACHUSETTS. 

and  the  amount  paid  in,  and  if  any  part  of  such  payment  has  been  made  other- 
wise than  in  money,  the  details  of  such  payment.  This  certificate  must  be 
signed  and  sworn  to  by  the  president  and  treasurer  and  by  a  majority  of  its 
directors.  No  foreign  corporation  can  transact  any  business  which  is  not 
permitted  to  domestic  corporations  by  the  laws  of  the  Commonwealth  (sees. 
56-60;  Laws  of  1905,  chap.  242). 

Before  transacting  business  within  the  State  foreign  corporations  must 
pay  $25  for  filing  copies  of  the  charter,  by-laws,  and  certificate  required  by 
the  act.  All  corporations  having  a  usual  place  of  business  within  the  Common- 
wealth, must  within  thirty  days  fixed  for  its  annual  meeting  last  preceding  the 
date  of  said  certificate,  or  within  thirty  days  after  the  final  adjournment  of 
said  meeting  but  in  three  months  before  the  date  so  fixed  for  said  meeting, 
prepare  and  file  in  the  office  of  the  Secretary  of  the  Commonwealth,  a  certificate 
signed  and  sworn  to  by  its  president,  treasurer,  and  by  a  majority  of  its  board 
of  directors,  showing  the  amount  of  its  authorized  capital  stock,  its  assets  and 
liabilities  as  of  a  date  not  more  than  thirty  days  prior  to  said  annual  meeting, 
in  such  form  as  is  required  of  domestic  corporations  under  the  statutes  of  the 
State  (Acts  of  1905,  chap.  233).  The  foregoing  certificate  must  be  accom- 
panied by  a  written  statement  under  oath  by  the  auditor  as  provided  by  sec- 
tion 47  of  the  Acts  of  1903,  chap.  437,  as  amended  by  Acts  of  1908,  chap. 
300.  Before  the  certificate  is  filed  it  must  be  submitted  to  the  Commissioner  of 
Corporations,  who  must  examine  and  approve  such  certificate  before  it  can  be 
filed,  and  who  must  assess  upon  such  corporation  an  excise  tax  in  accordance 
with  the  Laws  of  1903,  chap.  437,  sec.  75.  The  charge  for  filing  this 
annual  certificate  of  condition  is  $5  (sec.  91).  Each  year  foreign  corporations 
are  required  to  pay  an  excise  tax  of  one  hundredth  of  one  per  cent  of  the  par 
value  of  its  authorized  capital  stock,  as  stated  in  its  annual  statement  of  condi- 
tion, this  amount  never  to  exceed  $2,000  (sec.  75  as  amended  by  Acts  of  1908, 
chap.  300).  (As  to  special  provisions  covering  corporations  engaged  in  the 
construction,  erection,  etc.,  of  buildings,  bridges,  railroads,  or  structures  of 
any  kind,  see  Acts  of  1905,  chaps.  233,  242 ;   Acts  of  1906,  chap.  346.) 

Broadway  Nat.  Bank  v.  Baker,  176  Mass.  294;  57  N.  E.  603;  Kennebec  Ins.  Co.  v.  Au- 
gusta Ins.  Co.,  6  Gray,  204;  American  Ins.  Co.  v.  Owen,  15  Gray,  491;  Enterprise  Brew- 
ing Co.  v.  Grime,  173  Mass.  252;  53  N.  E.  855;  Hayward  v.  Leeson,  176  Mass.  310;  57  N.  E. 
656;  Bishop  v.  Globe  Co.,  135  Mass.  132;  Johnston  v.  Insurance  Co.,  132  Mass.  432;  Attor- 
ney-General v.  Company  (Mass.),  74  N.  E.  467. 


376 


DIGEST    OF    INCORPORATION    ACTS.  —  MICHIGAN. 


MICHIGAN. 

(The  references  below  are  to  the  Session  Laws  of  1903,  chap.  232,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Michigan  is  found  in  the  Session  Laws  of  1903, 
chap.  232.  Special  acts  are  provided  for  banking,  insurance,  and  railway  com- 
panies. Under  the  act  referred  to  above,  corporations  may  be  organized  for 
any  lawful  purpose.  Special  provision  is,  however,  made  for  raining  corpora- 
tions. (See  Laws  of  1903,  chaps.  130,  233,  244 ;  Laws  of  1905,  chaps.  28,  105, 
232;  Laws  of  1905,  Act  167.; 

2.  Incorporators.  — Three  or  more  persons  may  incorporate.  There  are 
no  residential  requirements  (Laws  of  1903,  chap.  232,  sec.  1). 

3.  Contents  of  the  Articles  of  Association.  —  The  articles  of  associa- 
tion should  contain : 

a.  Name.  —  Similarity  of  names  amongst  either  domestic  or  foreign  cor- 
porations doing  business  within  the  State  is  forbidden  (Laws  of  1903,  chap. 
232.  sec.  2;  Laws  of  1907,  chap.  146). 

People  v.  Company,  111  Mich.  405;  69  N.  W.  663. 

b.  Purposes.  —  A  company  may  incorporate  and  carry  on  manufacturing 
or  mercantile  business  or  any  union  of  the  two,  or  for  buying,  selling,  or  breed- 
ing live-stock,  or  for  engaging  in  maritime  commerce  or  navigation;  or  for 
purchasing,  holding,  or  dealing  in  real  estate;  or  for  conducting  warehouses 
and  storage  business,  or  for  erecting  and  owning  buildings,  or  for  the  production 
and  supplying  of  gas  and  electricity;  or  for  printing,  publishing,  and  book- 
making,  or  for  carrying  on  any  other  lawful  business  except  such  as  is  excluded 
by  sec.  36  of  the  act,  but  a  company  cannot  combine  any  two  hues  of  business 
except  manufacturing  and  mercantile,  which  is  expressly  provided  for  in  the 
act  (Laws  of  1903,  chap.  232,  sees.  1,  2). 

D  D.  Club  v.  Fitzgerald,  109  Mich.  670;  67  N.  W.  899;  Attorney-General  v.  Lorman, 
59  Mich.  157;  26  N.  W.  311. 

c.  Location  of  Business.  —  Location  of  the  principal  place  or  places  where 
the  corporate  operations  are  to  be  conducted  (Id.). 

d.  Capital  Stock.  —  The  total  authorized  capital  stock,  which  shall  not  be 
less  than  $1,000  nor  more  than  $25,000,000  (Id. ;  see  also  Laws  of  1903,  chap. 
233).  The  capital  stock  of  oil  companies  cannot  be  less  than  $50,000  nor  more 
than  $250,000  (Laws  of  1907,  Act  167). 

e.  Number  and  Par  Value  of  Shares.  —  The  par  value  of  the  shares  must  be 
either  $10  or  $100  (Id.).  In  mining  companies  the  par  value  must  be  $25  (Laws 
of  1903,  Act  233).  In  mining  companies  the  capital  stock  cannot  be  less  than 
$10,000  nor  more  than  $10,000,000  (Laws  of  1903,  Act  233). 

/.  The  Amount  of  Stock  Subscriptions.  — This  must  not  be  less  than  fifty 
per  cent  of  the  authorized  capital  stock  (Id.). 

g.  Preferred  Stock.  —  If  preferred  stock  is  desired,  this  must  be  provided 
for  in  the  articles,  and  an  exact  statement  of  the  terms  upon  which  the  com- 
mon and  preferred  stock  are  created,  and  the  amount  of  each  subscribed  and 
the  amount  of  each  paid  in  (Id.). 

h.  Capital  Slock  paid  in.  —  The  amount  of  capital  stock  paid  in  at  the  time 
of  executing  the  articles,  which  shall  not  be  less  than  ten  per  cent  of  the  author- 

377 


DIGEST    OF    INCORPORATION    ACTS.  —  MICHIGAN. 

ized  capital,  and  not  less  than  $1,000,  except  where  the  capitalization  is  $2,000 
or  under,  when  it  shall  be  twenty-five  per  cent  thereof.  Under  this  section 
the  manner  of  payment  of  the  capital  stock  is  required  to  be  set  forth  in  detail 
—  this  to  include  an  itemized  description  of  the  property  in  which  the  stock 
payment  is  made,  with  the  value  at  which  each  item  is  taken,  which  valuation 
shall  be  conclusive  in  the  absence  of  actual  fraud  (Id.).  There  must  be  made 
and  attached  to  the  articles  of  association  an  affidavit  by  at  least  three  of  the 
organizers  of  such  corporation,  that  they  know  the  property  described  in  such 
articles  of  association  and  that  the  same  has  been  actually  transferred  to  such 
corporation,  and  that  such  property  is  of  the  actual  value  therein  stated  (Laws 
of  1907,  Act  146). 

i.  Domiciliary  Office.  —  The  location  of  the  office  in  the  State  of  Michigan 
for  the  transaction  of  business  (Id.). 

j.  Duration.  —  The  corporate  existence,  which  shall  not  exceed  thirty 
years  (Id.). 

k.  Stockholders.  —  The  names  of  stockholders,  residences,  and  number  of 
shares  of  stock  subscribed  for  by  each  must  be  set  forth  (Id.). 

I.  Provisions  for  the  Regulation  of  Internal  Affairs.  —  The  articles  of  asso- 
ciation may  contain  any  provision  for  the  regulation  of  the  business  and  for 
the  conduct  of  the  affairs  of  the  corporation,  and  any  provision  creating,  defin- 
ing, limiting,  or  regulating  the  powers  of  the  corporation,  the  directors,  and  the 
stockholders,  or  any  class  or  classes  of  stock  and  stockholders,  that  may  be 
deemed  desirable  (sec.  2). 

People  ex  rel.  v.  Company,  111  Mich.  405;  69  N.  W.  653. 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of  the 
common  law  powers  of  corporations  the  act  gives  the  following  extraordinary 
powers:  The  corporation  may  conduct  its  business  in  whole  or  in  part,  if  it 
desires,  without  the  State  and  within  the  United  States  or  any  foreign  country 
(Laws  of  1907,  Act  51).  Also  the  power  to  issue  capital  stock  in  exchange  for 
real  and  personal  property,  with  the  power  to  make  such  capital  stock  full  paid 
stock  and  not  liable  for  any  further  call,  and  to  relieve  the  holders  thereof  from 
any  stockholders'  liability  in  the  absence  of  actual  fraud  in  the  transaction. 
To  vote  by  proxy,  to  forfeit  stock  for  non-payment  of  assessments,  to  enforce 
a  lien  for  non-payment  of  debts,  to  issue  preferred  stock  (Laws  of  1903,  chap. 
223,  232,  sees.  10,  11,  13,  14,  20;  see  also  Laws  of  1901,  chaps.  176,  183;  Laws 
of  1905,  chap.  61;  Laws  of  1907,  chaps.  141  and  162).  Mining  companies  may 
acquire  stock  in  certain  designated  corporations  (Laws  of  1903,  chap.  233). 
In  all  elections  for  directors  of  any  corporation  organized  under  any  general 
law  of  this  State  other  than  municipal,  insurance,  banking  corporations,  build- 
ing and  loan  associations,  every  stockholder  shall  have  the  right  to  vote  in 
person  or  by  proxy  the  number  of  shares  of  stock  owned  by  him  for  as  many 
persons  as  there  may  be  directors  to  be  elected,  or  to  cumulate  their  shares,  and 
give  one  candidate  as  many  votes  as  will  equal  the  number  of  directors  multi- 
plied by  the  number  of  shares  of  his  stock;  or  to  distribute  them  on  the  same 
principle  among  as  many  candidates  as  he  shall  see  fit.  All  such  corporations 
shall  elect  their  directors  annually  and  the  entire  number  of  directors  shall  be 
balloted  for  at  one  and  the  same  time  and  not  separately;  provided,  that  the 
by-laws  of  any  such  corporation  shall  not  be  so  amended  as  to  reduce  the  number 
of  directors  of  such  corporation  in  case  the  votes  of  a  sufficient  number  of 
shares  are  recorded  against  such  proposed  amendment,  which  if  cumulatively 

378 


DIGEST    OF    INCORPORATION    ACTS.  —  MICHIGAN. 

voted  as  herein  provided,  would  elect  one  or  more  directors  where  the  same 
number  of  shares  if  cumulatively  voted  would  not  be  sufficient  to  elect  the  same 
number  of  directors  of  the  reduced  board  (Laws  of  1911,  chap.  268,  sec.  1). 

Eakins  v.  Company,  75  Mich.  56S;  42  X.  W.  982:  Shadford  v.  Company,  130  Mich.  300; 
89  N.  \Y.  960;   Whiter.  Rice,  112  Mich.  403;   70  N.  W.  1024. 

5.  Procuring  the  Charter.  —  The  articles  of  association  must  be  signed 
and  acknowledged  by  each  of  the  incorporators.  It  seems  to  be  contemplated 
by  the  statute  that  the  corporation  shall  be  organized  before  the  articles  are 
filed  in  any  State  or  local  office  (see  Organization  Meeting,  post,  sec.  10).  The 
statute  provides  that  before  any  corporation  organized  to  operate  in  the  State 
shall  commence  business,  the  president  shall  cause  the  articles  of  association 
to  be  recorded  in  the  office  of  the  Secretary  of  State  and  in  the  office  of  the 
county  clerk  of  the  county  in  which  its  operations  are  to  be  carried  on.  If  it 
is  organized  to  operate  outside  of  the  State,  the  requirement  is  the  same,  except 
that  the  articles  must  then  be  filed  in  the  office  of  the  Secretary  of  State  and 
in  the  office  of  the  county  clerk  of  the  county  in  the  State  where  the  domiciliary 
office  is  located.  The  corporate  existence,  however,  commences  as  soon  as 
articles  are  subscribed  and  acknowledged  (Id.  sees.  2,  9). 

Carmody  v.  Powers,  60  Mich.  26;  26  N.  W.  801 ;  Whipple  v.  Parker,  29  Mich.  369. 

6.  Corporate  Indebtedness. — There  is  no  limit  prescribed  by  statute 
upon  the  creation  of  corporate  indebtedness. 

7.  Organization  Tax.  —  One-half  of  one  mill  on  each  dollar  of  authorized 
capital  stock,  that  is,  50  cents  on  each  thousand  dollars,  with  a  minimum  fee  of 
$5  (Laws  of  1891,  chap.  2;   Laws  of  1893,  chap.  79;   C.  L.  of  1897,  sec.  8574). 

Michigan  Fern.  Sem.  v.  Sec.  of  State,  115  Mich.  118;  73  N.  W.  131. 

8.  Filing  and  Recording  Fees.  —  The  Secretary  of  State  charges  a  fifing 
fee  of  50  cents  or  a  recording  fee  of  20  cents  per  folio  of  one  hundred  words,  or 
both,  according  as  the  act  under  which  the  corporation  is  incorporated  may 
provide.  The  Secretary  of  State  does  not  issue  a  certificate  of  incorporation. 
His  charge  for  issuing  a  certified  copy  of  articles  of  incorporation  is  20  cents 
per  folio  of  one  hundred  words.  For  filing  and  recording  amendments  the 
charge  is  50  cents  for  filing,  and  20  cents  per  folio  of  one  hundred  words  for 
recording.  For  fifing  annual  reports,  50  cents  each.  The  filing  fee  in  local 
county  offices  is  usually  50  cents,  and  the  recording  fees  vary  from  10  to  20 
cents  per  folio  of  one  hundred  words. 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  the  articles  of  association  are  filed  and  recorded  in  the  office  of  the 
Secretary  of  State,  and  —  in  the  case  of  corporations  formed  to  carry  on  its 
business  within  the  State  —  in  the  office  of  the  clerk  of  the  county  in  which 
its  corporate  business  is  to  be  carried  on,  or  —  in  the  case  of  non-resident  cor- 
porations —  in  the  office  of  the  county  clerk  of  the  county  where  the  domiciliary 
office  is  located  (Id.  sec.  9).  In  the  case  of  manufacturing,  commercial  com- 
panies, etc.,  before  commencing  business,  at  least  ten  per  cent  of  the  capital 
must  be  paid  in  and  fifty  per  cent  subscribed  (Laws  of  1903,  chap.  232,  sec.  2). 

O.  V.  &  P.  Co.  v.  Secretary  of  State,  8  Detroit  Leg.  News,  795;  Whitney  v.  Wyman,  101 
U.  S.  392. 

10.  Organization  Meeting.  —  Any  two  of  the  stockholders  named  in  the 
articles  of  association  may  call  a  meeting  of  the  stockholders  for  the  purpose  of 

■  dzation,  !>y  publishing  notice  thereof  in  the  manner  required  by  statute.    This 

379 


DIGEST    OF    INCORPORATION    ACTS.  —  MICHIGAN. 

notice  may  be  waived  in  writing  by  all  the  stockholders  specifying  the  time  for  the 
organization  meeting.  The  organization  meeting  should  be  held  within  the  State 
in  order  to  avoid  any  possible  question  as  to  the  legality  thereof  (Id.  sec.  3). 

11.  Meetings  of  Stockholders  and  Directors. — The  statute  specifi- 
cally provides  that  corporations  may  establish  an  office  or  offices  for  the  trans- 
action of  business  without  the  State  and  within  the  United  States,  and  to  hold 
any  meetings  of  the  stockholders  and  directors  thereat.  The  place  must  be 
chosen  by  a  vote  of  a  majority  of  the  stockholders  at  a  meeting  duly  called  for 
that  purpose,  and  after  being  fixed  cannot  be  changed  within  one  year,  and 
must  be  certified  by  the  directors  of  the  corporation  to  the  Secretary  of  State 
within  two  months  from  the  time  such  office  is  located  (Id.  sec.  20).  Cumulative 
voting  in  the  election  of  directors  is  permitted  (Laws  of  1905,  chap.  61). 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualifications. — There 
must  be  at  least  three  directors  who  shall  be  stockholders.  In  mining  companies 
the  maximum  number  of  directors  is  nine  (Laws  of  1903,  chap.  233).  There 
are  no  residential  requirements  (Id.  sec.  4).  Cumulative  voting  is  provided  for 
(Laws  of  1903,  chap.  224;  Laws  of  1905,  chap.  61;  Laws  of  1907,  Act  141). 

Anderson  Carriage  Co.  v.  Pungs,  127  Mich.  534;  86  N.  W.  1040. 

b.  Liabilities.  —  The  directors  are  liable  to  creditors  for  failure  to  make 
annual  reports  as  provided  by  law  ;  for  declaration  of  dividends  when  the  com- 
pany is  insolvent,  or  when  the  payment  of  the  same  would-  render  it  insolvent ; 
and  are  jointly  and  severally  liable  to  the  extent  of  three  times  the  amount 
paid  on  the  stock  outstanding  in  their  name  for  violation  of  any  provision  of 
the  Business  Corporation  Act  (Id.  sees.  12,  22,  23 ;  also  for  making  false  state- 
ments or  reports,  Laws  of  1909,  chaps.  25,  85). 

Bank  v.  Pierson,  112  Mich.  410;  70  N.  W.  901 ;  M.  I.  W.  C.  &  S.  Co.  v.  Mosher,  114  Mich. 
64;  72  N.  W.  117;  Keeney  v.  Converse,  99  Mich.  316;  58  N.  W.  325;  Gennert  v.  Ives,  102 
Mich.  547;  61  N.  W.  9;  Silberman  v.  Munroe,  104  Mich.  352;  62  N.  W.  555. 

13.  Stockholders'  Liabilities.  — If  the  capital  stock  of  a  corporation  is 
withdrawn  before  the  payment  of  the  corporate  debts  for  which  such  stock 
would  have  been  liable,  the  stockholders  are  jointly  and  severally  liable  to 
any  creditor  to  the  amount  that  has  been  withdrawn.  Stockholders  are  indi- 
vidually liable  for  all  labor  performed  for  the  corporation.  They  are  also  liable 
to  the  amount  of  their  unpaid  stock  subscriptions  (Cons.,  Art.  XV.  sec.  7,  Public 
Acts  of  1903,  Act  232,  sees.  21,  24,  28,  29,  35).  Incorporators  are  liable  for  false 
statements  as  to  the  amount  of  capital  stock  paid  in. 

A.  M.  &  G.  B.  Co.  v.  Bulkley,  107  Mich.  447;  65  N.  W.  291;  Graves  v.  Brooks,  117  Mich. 
424;  75  N.  W.  932;  A.  S.  &  W.  Co.  v.  Eddy,  130  Mich.  266;  89  N.  W.  952;  McBryan  v. 
Company,  130  Mich.  Ill;  89  N.  W.  683;  P.  S.  Bank  v.  Company,  105  Mich.  535;  63  N.  W. 
514;  Ten  Eyckv.  Company,  114  Mich.  494;  72  N.  W.  362;  Kamp  v.  Wintermute,  107  Mich. 
447,  635;  65  N.  W.  570;  A.  M.,  etc.  Co.  v.  Bulklev,  107  Mich.  447;  65  N.  W.  291;  Mussel- 
man  v.  Wright,  107  Mich.  639 ;   65  N.  W.  569;   Voight  v.  Dregge,  97  Mich.  322;   56  N.  W.  557. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  officers  as  the  by-laws  may  prescribe. 
The  par  value  of  shares  may  be  either  $10  or  $100,  except  in  the  case  of  mining 
companies,  where  it  must  be  $25  (Laws  of  1903,  Act  232 ;  Laws  of  1907,  Act 
167). 

15.  Preferred  Stock.  —  The  corporation  may  provide  in  its  articles  of 
association  or  by  amendment  thereto,  by  a  three-fourths  vote  of  the  stock,  for 
the  issuance  of  preferred  stock,  not  to  exceed  two-thirds  of  the  capital  stock 
paid  in,  which  shall  be  subject  to  redemption  at  par  at  a  certain  time  to  be 
fixed  by  the  by-laws  of  the  corporation  and  to  be  expressed  in  the  certificate 

380 


DIGEST    OF    INCORPORATION    ACTS.  —  MICHIGAN. 

therefor.  The  holders  of  preferred  stock  shall  be  entitled  to  a  dividend  payable 
quarterly,  half  yearly,  or  yearly,  same  to  be  cumulative,  and  not  to  exceed 
eight  per  cent  per  annum.  Preferred  stockholders  are  not  liable  for  the  debts 
of  the  corporation  excepting  debts  for  labor.  Preferred  stockholders  shall  have 
voting  power  except  when  otherwise  provided  in  the  articles  of  association  or 
amendments  thereto.  The  right  to  vote  is  also  given  under  certain  other  con- 
ditions (Id.  sec.  35). 

16.  Payment  of  Capital  Stock.  —  The  statutes  of  Michigan  are  peculiar 
with  respect  to  the  manner  of  the  payment  of  capital  stock.  Only  such  prop- 
erty may  be  taken  in  payment  for  capital  stock  as  the  purposes  of  the  corpora- 
tion may  require,  and  only  such  property  as  can  be  sold  and  transferred  by 
the  corporation  and  as  shall  be  subject  to  levy  or  sale  on  execution  or  other 
process  issued  out  of  any  court  having  competent  jurisdiction  for  the  satisfac- 
tion of  any  judgment  or  decree  against  such  corporation  (Laws  of  1907,  Act  146). 
A  recent  amendment  of  the  act  requires  that  there  shall  be  made  and  attached 
to  the  articles  of  association  an  affidavit  by  at  least  three  of  the  organizers  of 
such  corporation,  that  they  know  the  property  described  in  said  articles  of 
association,  and  that  the  same  has  been  actually  transferred  to  such  corpora- 
tion and  that  sucli  property  has  the  actual  value  therein  stated  (Laws  of  1907, 
Act  146).  All  stock  must  be  issued  and  paid  for  at  par  (Laws  of  1907,  Acts 
51,  146). 

Graves  v.  Brooks,  117  Mich.  424. 

17.  Books.  —  Books  containing  accounts  of  the  company  must  be  kept  at 
the  office  of  the  treasurer  of  the  corporation  within  the  State  for  the  inspection 
of  stockholders  (sec.  15).  Corporations  having  their  principal  place  of  business 
within  the  State  are  required  to  keep  their  stock  transfer  book  at  such  office. 

18.  Office  and  Agent.  —  Every  corporation  must  maintain  an  office  within 
the  State  and  an  agent  to  receive  process.  Such  office  cannot  be  changed  within 
one  year  after  incorporation  (Laws  of  1903,  chap.  232,  sec.  2). 

19.  Reports. — Corporations  must  annually  in  the  month  of  January  or 
February  make  duplicate  reports  showing  the  condition  of  such  corporation 
on  the  31st  day  of  December  next  preceding,  or,  if  the  fiscal  year  of  any  cor- 
poration shall  close  within  ninety  days  preceding  said  31st  day  of  December, 
the  report  may  be  as  at  the  close  of  said  fiscal  year,  provided  flour-milling  cor- 
porations shall  make  and  deposit  reports  in  the  month  of  July  for  the  year 
ending  June  30th  preceding,  such  report  to  state  the  amount  of  common  and 
preferred  capital  stock  authorized,  and  the  amount  thereof  subscribed  for  and 
the  amount  thereof  actually  paid  for  in  cash,  and  the  amount  thereof  paid  for 
in  property,  the  total  value  as  near  as  may  be  estimated  of  all  property  owned 
by  the  corporation,  the  value  of  the  different  items  or  classes  of  property  as 
follows :  real  estate  used  in  the  business,  real  estate  not  used  in  the  business, 
goods,  chattels,  merchandise,  material  and  other  similar  tangible  property ; 
patent  rights,  copyrights,  trade-marks,  and  formuke,  good-will,  and  other  prop- 
erty specifying  the  kind;  value  of  all  credits  owing  to  the  corporation;  the 
amount  of  debts  of  the  corporation ;  the  name  and  post-office  address  of  each 
stockholder  and  the  number  of  shares  of  preferred  and  common  stock  held  by 
him  at  the  date  of  such  report,  the  name  and  post-office  address  of  each  officer 
and  director  of  the  corporation.  Such  reports  must  be  signed  by  a  majority 
of  the  board  of  directors  and  verified  by  the  oath  of  the  secretary  of  the  cor- 
poration and  deposited  in  the  office  of  the  Secretary  of  State  within  the  said 
month  of  January  or  February,  or  witlun  sixty  days  after  the  dose  of  Buch 

381 


DIGEST    OF   INCORPORATION    ACTS.  —  MICHIGAN. 

fiscal  year,  accompanied  by  a  filing  fee  of  50  cents.  The  Secretary  of  State,, 
after  filing  one  of  the  reports  in  his  office,  is  required  to  forward  the  other  to 
the  county  clerk  of  the  county  in  which  the  principal  place  of  business  of  the 
corporation  is  situated,  said  county  clerk  to  file  the  same  in  his  office.  Upon 
failure  to  file  the  report  within  the  time  specified,  if  continued  in  default 
until  February  10th,  the  corporate  powers  shall  be  suspended  thereafter  until 
it  shall  have  filed  such  report.  During  the  default  directors  are  made  liable 
for  the  debts  of  the  corporation  contracted  since  the  filing  of  the  last  report  of 
said  corporation  (Laws  of  1905,  chap.  194;  Laws  of  1907,  Act  137).  For  special 
provisions  as  to  mining  and  smelting  and  certain  classes  of  manufacturing  cor- 
porations, see  Laws  of  1911,  chap.  269). 

20.  Anti-Trust  Statute.  —  Under  the  Act  of  March  3,  1899,  all  trusts  or 
combinations  intended  to  prevent  free  competition  in  business  are  prohibited 
(Stat.,  sees.  9354  j-9354  p ;  Laws  of  1899,  chap.  255 ;  Laws  of  1905,  chaps.  229, 
329). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  for  entering  illegal  trusts  or  combines,  for  attempting  to  act  as  a 
corporation  when  not  legally  incorporated,  or  for  misuser  or  non-user  (Stat., 
sees.  8618,  8657,  9354  m).  Also  for  failure  to  file  annual  reports  for  ten  days 
after  February  1st  corporate  powers  are  suspended  (sec.  12 ;  Laws  of  1905, 
Act  194).  Failure  to  keep  stock  and  transfer  books  at  principal  office  in  the 
State  is  also  ground  for  forfeiture  (C.  L.  sec.  8567 ;  see  also  C.  L.  9950 ;  Laws 
of  1899,  Act  255 ;   Laws  of  1905,  Acts  229,  329). 

22.  Amendments.  —  The  capital  stock  may  be  increased  or  decreased  at 
any  annual  meeting  of  the  stockholders  or  at  any  special  meeting  thereof  called 
for  that  purpose,  notice  of  such  purpose  to  be  given  with  the  notice  of  such 
annual  or  special  meeting  by  a  vote  of  two-thirds  of  the  capital  stock  of  the 
corporation.  In  voting  upon  the  increase  of  the  capital  stock  the  stockholders 
shall  have  power,  by  the  same  statutory  majority,  to  fix  the  value  thereof, 
and  the  price  per  share,  which  shall  not  be  less  than  par,  at  which  the  increase 
of  the  capital  stock  shall  be  subscribed  and  paid  for  by  the  stockholders,  as 
well  as  the  time  and  manner  of  the  subscription  and  payment,  and  by  the 
same  vote  to  authorize  the  directors  of  the  corporation  to  sell,  at  not  less  than 
the  price  so  fixed,  any  part  of  such  increase  not  subscribed  by  the  stockholders 
after  they  have  had  a  reasonable  opportunity  to  make  subscription  of  their  pro- 
portionate shares  thereof;  and  to  make  provision  for  calling  in  and  cancelling 
the  old  and  issuing  new  certificates  of  stock ;  but  nothing  herein  contained  shall 
in  any  way  operate  to  discharge  any  company,  which  may  diminish  its  capital 
stock,  from  any  obligation  or  demand  that  may  be  due  from  said  company. 
When  a  corporation  shall  so  increase  or  diminish  its  capital  stock,  the  president 
and  a  majority  of  the  directors  shall  make  a  certificate  thereof,  which  shall  be 
signed  by  them  and  recorded  and  returned  as  provided  herein  for  recording 
and  returning  the  original  articles  of  incorporation,  and  such  increase  or  diminu- 
tion shall  commence  and  be  operative  from  the  date  when  such  certificate  is 
recorded  in  the  office  of  the  Secretary  of  State.  Provided,  that  in  order  to  en- 
title such  certificate  to  be  recorded  it  must  show  that  at  least  fifty  per  cent  of 
the  total  authorized  stock,  after  such  increase,  has  been  subscribed,  and  that 
at  least  ten  per  cent  of  the  total  authorized  capital  stock  has  been  actually  paid 
in  (sec.  3;  Laws  of  1907,  chap.  146). 

The  articles  of  association  may  be  amended  in  any  other  respect  desired  at 
any  annual  meeting  or  at  any  special  meeting  of  the  stockholders  duly  called 

382 


DIGEST    OF   INCORPORATION   ACTS.  —  MICHIGAN. 

for  that  purpose  by  a  resolution  adopted  by  a  vote  of  two-thirds  in  interest  of 
its  capital  stock.  Such  amendment  shall  not  become  operative  until  a  copy 
of  such  resolution,  signed  by  the  president  and  secretary  of  the  corporation, 
shall  have  been  recorded  as  is  provided  herein  for  the  recording  of  original 
articles  of  association  (sec.  17). 

Any  corporation  organized  or  existing  under  the  provisions  of  this  act  may 
remove  its  place  of  business  from  any  city,  village,  or  town  in  this  State,  where 
it  is  or  may  be  located,  to  any  other  city,  village,  or  town  in  this  State,  by  a 
vote  of  two-thirds  of  its  stockholders  in  interest.  But  in  case  of  a  removal 
from  one  county  to  another,  the  president  and  secretary  of  such  corporation 
shall  attach  to  their  articles  of  association  a  certificate  that  such  corporation 
has  thus  removed,  and  said  articles  of  association,  together  with  said  certifi- 
cate, shall  be  left  for  record  immediately  on  such  removal,  in  the  office  of  the 
county  clerk  of  the  county  to  which  such  corporation  shall  remove,  and  they 
shall  be  recorded  by  such  clerk  at  full  length  in  the  book  kept  by  him  for  that 
purpose.  And  the  president  and  secretary  of  such  corporation  shall,  imme- 
diately upon  such  removal,  cause  a  certificate  thereof  to  be  recorded  in  the 
office  of  the  county  clerk  of  the  county  from  which  it  removes  (sec.  18). 

Detroit  Cham,  of  Com.  v.  Sec.  of  State,  109  Mich.  691;  67  N.  W.  897;  People  v.  Green, 
116  Mich.  505;  74  N.  W.  714. 

23.  Extension  of  Corporate  Existence.  —  At  any  meeting  called  for 
that  purpose  to  be  held  within  one  year  immediately  preceding  the  date  of  the 
termination  of  the  corporate  existence  as  fixed  by  the  articles  of  association, 
the  corporation  may  by  a  vote  of  two-thirds  of  its  capital  stock  direct  the  con- 
tinuance of  the  corporate  existence  for  a  further  term  not  exceeding  thirty 
years.  After  the  adoption  of  this  resolution,  the  president  and  secretary  of 
the  stockholders'  meeting  shall  make,  sign,  and  acknowledge  duplicate  articles 
of  association  as  in  the  case  of  a  new  corporation,  to  which  shall  be  appended 
a  copy  of  such  resolution  certified  and  verified  by  the  oath  of  the  secretary, 
which  shall  be  filed  and  recorded  as  in  the  case  of  a  new  corporation  (Id.  sec.  33  ; 
as  amended  by  Laws  of  1905,  chap.  328 ;  Cons.,  Art.  XV.  sec.  107). 

24.  Annual  Franchise  Tax.  —  There  is  no  annual  franchise  tax  in  force 
in  Michigan. 

25.  Dissolution.  —  Corporations  may  be  dissolved  only  upon  application 
to  the  courts  (Stat.,  sec.  4161  b,  4161  d  7-4164  inclusive,  8174,  8211  a;  Laws 
of  1905,  chaps.  10,  96). 

26.  Foreign  Corporations.  —  Foreign  corporations  must  file  a  certified 
copy  of  their  articles  with  the  Secretary  of  State  and  evidence  of  appointment 
of  agent  to  receive  process.  Must  pay  franchise  fee  of  one-half  of  one  mill  on 
each  dollar  of  the  proportion  of  its  authorized  capital  stock  represented  by 
its  business  in  Michigan  to  the  Secretary  of  State,  but  which  fee  shall  never 
be  less  than  $25  (Laws  of  1901,  chap.  206,  as  amended  by  Laws  of  1907,  chap. 
310).  It  must  also  pay  the  prescribed  filing  and  recording  fees  in  addition  to 
the  franchise  tax  (Laws  of  1907,  Act  310).  Every  foreign  corporation  by  its 
president,  secretary,  treasurer,  and  superintendent,  or  any  two  of  them,  shall 
make  and  file  with  the  Secretary  of  State  a  statement  duly  sworn  to  by  at  least 
two  of  such  officers  in  such  form  as  the  Secretary  of  State  shall  prescribe,  con- 
taining the  following  facts:  (1)  Location  of  its  principal  place  or  places  of  busi- 
ness and  the  names  and  addresses  of  its  principal  officers.  (2)  The  location 
of  its  principal  office  and  the  principal  place  of  business  in  Michigan,  ami  the 
name  and  addresses  of  the  officers  or  agent  of  the  company  in  charge  of  its 

::s:; 


DIGEST    OF    INCORPORATION    ACTS.  —  MICHIGAN. 

business  in  Michigan.  (3)  Total  value  of  the  property  owned  and  used  by  the 
company  in  its  business,  giving  its  location,  general  character,  and  stating 
separately  the  value  of  its  tangible  property,  of  its  cash  credits,  its  franchises, 
patents,  trade-marks,  formulas,  good-will.  (4)  Value  of  the  property  owned 
and  used  in  Michigan  and  where  situated.  (5)  The  total  amount  of  business 
transacted  during  the  year  and  the  amount  of  business,  if  any,  transacted  in 
Michigan.  (6)  Such  other  facts  bearing  on  the  matter  as  the  Secretary  of  State 
may  require,  including  a  statement  of  the  particular  purpose  or  the  particular 
kind  of  business  for  which  the  company  desires  admission  to  this  State  (Laws 
of  1907,  Act  310).  When  such  corporation  has  fully  complied  with  the  provi- 
sions of  this  act,  the  Secretary  of  State  may  issue  to  such  corporation  a  certifi- 
cate of  authority  to  carry  on  such  business  in  this  State  during  the  period  of  its 
corporate  existence,  but  not  exceeding  thirty  years;  provided,  that  no  such 
foreign  corporation  shall  be  formed  to  transact  business  in  this  State  unless  it 
be  incorporated  in  whole  or  in  part  for  the  purpose  or  object  for  which  a  corpora- 
tion may  be  formed  under  the  laws  of  Michigan,  and  then  only  for  such  purpose 
or  object.  The  Secretary  of  State  shall  in  the  certificate  which  he  issues  state 
under  what  act  said  corporation  is  to  carry  on  business  in  this  State,  and  said 
corporation  shall  have  all  the  powers,  rights  and  privileges  and  be  subject  to 
all  the  restrictions,  requirements  and  duties  granted  to  or  imposed  upon  cor- 
porations organized  under  said  act;  and  the  officers  and  directors  of  every  such 
corporation  shall  be  subject  to  all  such  requirements  and  duties  as  are  imposed 
upon  officers  and  directors  of  corporations  organized  under  such  act,  and  shall  be 
subject  to  the  same  penalties  and  liabilities  for  failure  to  perform  any  duties  im- 
posed by  such  act  as  are  the  officers  and  directors  of  corporations  organized  under 
such  act;  provided,  that  the  carrying  on  in  this  State  by  such  corporation  of 
business  for  which  it  has  not  been  so  admitted  or  failure  to  fully  comply  with  the 
requirements  of  the  act  under  which  it  has  been  so  admitted,  shall  be  sufficient 
cause  for  revoking  the  certificate  of  authority  to  do  business  in  this  State,  and 
the  Secretary  of  State  may  revoke  such  certificate,  and  shall  promptly  notify 
such  corporation  of  such  revocation  and  the  reasons  therefor  by  notice  sent  by 
mail  to  the  home  office  of  such  corporation  (Laws  of  1911,  chap.  266,  sec.  4). 
Foreign  corporations  must  file  the  same  annual  report  as  is  required  of  domestic 
corporations  (Laws  of  1907,  Act  137).  Permits  to  do  business  run  for  thirty 
years  (Laws  of  1911,  chap.  455). 

People  v.  Hawkins,  106  Mich.  479;  64  N.  W.  736;  Rough  v.  Breitung,  117  Mich.  48; 
75  N.  W.  147;  Wilcox  Cordage  Co.  v.  Mosher,  114  Mich.  64;  72  N.  W.  117;  Holder  v.  Com- 
pany, 169  U.  S.  81;  M.  P.  Co.  v.  Wilkinson,  105  Mich.  57;  62  N.  W.  1119;  W.  S.  Co.  v.  Sec. 
of  State,  115  Mich.  234;  73  N.  W.  107;  Seamans  v.  Company,  105  Mich.  400;  63  N.  W. 
408. 


384 


DIGEST    OF    INCORPORATION    ACTS.  —  MINNESOTA. 


MINNESOTA. 

(The  references  cited  below  are  to  the  Revised  Laws  of  Minnesota  for  1905,  unless  other- 
wise stated.) 

1.  Statute  under  which  Business  Corporations  may  incorporate. — 

The  Business  Corporation  Act  of  Minnesota  is  found  in  the  Revised  Laws  of 
that  State  (1905),  chap.  58,  sees.  2838-2890,  3068-3071,  3169-3190  inclusive. 
Special  acts  are  provided  for  public  service  corporations  (sees.  2841-2843,  2391- 
2934),  cemetery  associations  (sees.  2935-2966);  banking  (sees.  2969-2982), 
savings  banks,  trust  companies,  local  building  and  loan  associations,  and 
general  building  and  loan  associations  (sees.  3009-3067),  mortgage  loan  com- 
panies, co-operative  associations,  agricultural  associations,  chambers  of  com- 
merce, insurance  and  eleemosynary  corporations  (see  sees.  3072-3168  inclusive). 
If  the  incorporators  wish  to  avoid  the  double  stockholders'  liability  incident 
to  the  holding  of  stock  in  ordinary  business  corporations  they  may  do  so  by 
organizing  a  corporation  under  sees.  3068-3071  for  the  purpose  of  carrying  on 
an  exclusively  manufacturing  or  mechanical  business. 

2.  Incorporators.  —  Any  number  of  persons  not  less  than  three  may  form 
a  corporation.    There  are  no  residential  requirements  (sec.  2849). 

State  v.  Critchett,  57  Minn.  13;  32  N.  \V.  787. 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate  must 
specify  (sec.  2849). 

a.  Corporate  Name.  —  Such  name  must  distinguish  it  from  all  other  cor- 
porations, domestic  or  foreign,  authorized  to  do  business  in  the  State,  and  shall 
end  with  the  word  "company,"  "corporation,"  "bank,"  or  "association,"  or 
the  word  "incorporated"  (Laws  of  1907,  chap.  468). 

b.  General  Nature  of  the  Business  to  be  transacted.  —  The  Secretary  of  State 
permits  the  insertion  of  any  number  of  purposes  in  the  articles,  providing  the 
same  do  not  come  within  the  purview  of  the  special  acts  (sees.  2844-2884 
inclusive).     (See  also  sees.  3068,  3070.) 

c.  Principal  Place  of  Business.  —  The  location  of  the  principal  place  for  the 
transaction  of  the  corporate  business  must  be  set  forth. 

d.  Duration.  —  The  period  of  its  duration  if  limited.  The  duration  cannot 
exceed  thirty  years  (sec.  2856). 

e.  Incorporators.  —  The  names  and  places  of  residence  of  the  incorporators 
(sec.  2849). 

/.  Directors.  —  The  certificate  must  set  forth  in  what  board  the  corporation's 
management  shall  be  vested,  together  with  the  date  of  the  annual  meeting  at 
which  they  shall  be  elected  and  the  names  and  addresses  of  those  composing 
the  board  until  the  first  election.  If  desired  there  may  also  be  inserted  the  names 
of  the  corporate  officers  who  are  to  act  until  the  first  annual  meeting  (haws  of 
1909,  chap.  298).  If  desired,  the  corporation  may  provide  in  its  certificate  of 
incorporation  for  classifying  its  directors  in  respect  to  the  times  for  which  they 
shall  hold  office,  the  several  classes  to  be  elected  for  different  terms,  provided 
that  no  class  shall  be  elected  for  a  term  of  less  than  one  nor  more  than  five 
years,  and  that  the  term  of  office  of  at  least  one  class  shall  expire  each  year 
(sec.  2869).  The  certificate  of  incorporation  may  also  provide  that  at  all  elec- 
tions of  directors  each  stockholder  shall  be  entitled  to  as  many  votes  as  shall 

25  385 


DIGEST    OF    INCORPORATION    ACTS.  —  MINNESOTA. 

equal  the  number  of  shares  of  stock  multiplied  by  the  number  of  directors 
to  be  elected,  and  that  he  may  cast  all  of  such  votes  for  a  single  director  or 
may  distribute  them  among  the  number  to  be  voted  for  as  he  may  see  fit 
(sec.  2S62). 

g.  Capital  Stock.  —  The  amount  of  capital  stock  and  how  the  same  is  to  be 
paid  in.  The  authorized  capital  can  never  be  less  than  $10,000.  The  number 
of  shares  into  which  the  stock  is  to  be  divided  and  the  par  value  of  each  share 
must  be  stated.  The  par  value  cannot  be  less  than  $1  nor  more  than  $100.  If 
there  is  to  be  more  than  one  kind  of  stock  issued,  a  description  thereof  must 
be  inserted,  together  with  the  terms  of  issue  of  each  class  of  stock  and  the  method 
of  voting  thereon  (sees.  2868,  2878).  In  the  case  of  corporations  formed  to 
carry  on  a  manufacturing  or  mechanical  business  the  shares  cannot  be  less  than 
$10  nor  more  than  $100  (sec.  3068). 

State  v.  Company,  40  Minn.  213;  41  N.  W.  1020. 

h.  Corporate  Indebtedness.  —  The  highest  amount  of  indebtedness  or  liability 
to  which  the  corporation  shall  at  any  time  be  subject  (sec.  2849). 
State  v.  Company,  40  Minn.  213;  41  N.  W.  1020. 

i.  The  certificate  may  contain  any  other  lawful  provision  that  may  be 
desired,  defining  or  limiting  the  powers  or  business  of  the  corporation,  its  offi- 
cers, directors,  and  stockholders  (sec.  2849). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  the 
common  law  powers  of  corporations,  the  act  gives  the  following  extraordinary 
powers :  To  issue  preferred  stock  (sees.  2853,  2878).  In  the  case  of  corporations 
organized  for  the  purpose  of  carrying  on  a  manufacturing,  mechanical,  or  mining 
business,  or  for  buying,  working  and  dealing  and  selling  mineral  lands,  power  is 
given  to  such  corporations  to  hold  stock  in  other  corporations  if  a  majority  of 
the  stockholders  shall  so  elect  (sec.  2853,  Laws  of  1907,  chap.  293,  sec.  3,  as 
amended  by  Laws  of  1909,  chap.  280).  To  renew  corporate  existence  (sees. 
2856,  2857).  To  vote  by  proxy  (sec.  2861).  To  cumulate  votes  in  the  election 
of  directors  (sec.  2862).  To  enforce  a  lien  upon  the  stock  of  its  members  for  all 
debts  due  from  them  to  the  corporation,  as  well  as  to  forfeit  stock  for  non- 
payment of  assessments  (sec.  2863).  To  hold  such  real  and  personal  property 
as  shall  be  necessary  for  the  business  of  the  corporation  (sec.  2852;  Laws  of 
1911,  chap.  130).  To  classify  directors  (sec.  2860).  Express  power  is  conferred 
upon  the  directors  of  mining  and  manufacturing  corporations  to  meet  with- 
out the  State,  and  the  corporation  is  empowered  to  establish  offices  without  the 
State  for  the  transaction  of  its  business  (sees.  2870,  3071;  see  also  sees.  3237, 
3238;  Laws  of  1907,  chap.  439;  Laws  of  1911,  chap.  129). 

Blien  v.  Rand,  77  Minn.  110;  79  N.  W.  606;  N.  T.  E.  Co.  v.  Company,  76  Minn.  334; 
79  N.  W.  315;    Sullivan  v.  Murphy,  23  Minn.  6;    Auerbach  v.  LeSueur  Mill  Co.,  28  Minn.  291. 

5.  Procuring  the  Charter. — The  certificate  of  incorporation  must  be 
signed  and  acknowledged  by  each  of  the  incorporators.  After  execution  and 
acknowledgment  of  the  certificate  by  incorporators  the  same  must  be  filed  for 
record  with  the  Secretary  of  State,  who,  if  he  finds  that  it  conforms  to  law  and 
that  the  required  fee  for  incorporation  has  been  paid,  shall  record  the  same  and 
certify  that  fact  thereon.  Thereafter  such  certificate  shall  be  filed  for  record 
with  the  register  of  deeds  of  the  county  where  the  principal  business  office  of 
the  corporation  as  specified  in  the  certificate  of  incorporation  is  located.  Cer- 
tificates of  incorporation  must  also  be  published  in  full  in  a  qualified  newspaper 

386 


DIGEST    OF    INCORPORATION    ACTS.  —  MINNESOTA. 

in  the  county  wherein  the  principal  place  of  business  of  the  corporation  is 
located  as  specified  in  the  certificate.  Such  publication  must  be  made  for  two 
successive  days  in  a  daily  newspaper  or  for  two  successive  weeks  in  a  weekly 
newspaper.  As  soon  as  the  publication  is  completed  sworn  proof  thereof  must 
be  filed  with  the  Secretary  of  State.  When  this  is  done  the  corporate  organiza- 
tion is  by  statute  held  to  be  completed.  Before  the  certificate  of  incorporation 
can  be  filed  for  record  in  the  office  of  the  Secretary  of  State,  the  organization 
tax  must  be  paid  to  the  State  Treasurer.  The  latter  officer  issues  a  receipt  in 
duplicate  showing  the  payment  of  the  organization  tax.  One  of  these  duplicate 
receipts  must  be  filed  with  the  certificate  of  incorporation  in  the  office  of  the 
Secretary  of  State.  No  organization  tax  need  be  paid  by  corporations  formed 
to  operate  solely  in  the  raising  or  improving  live-stock,  or  for  the  cultivation  or 
improvement  of  farms,  gardens,  or  agricultural  lands,  growing  beets  or  for  can- 
ning fruits  or  vegetables,  or  by  any  telephone  company  connecting  towns  or 
villages  of  less  than  2,000  inhabitants  (sec.  2873,  as  amended  by  Laws  of  1909, 
chap.  202) .  Upon  observing  the  formalities  already  described,  the  Secretary  of 
State  issues  a  certificate  of  incorporation  specifying  the  names  of  the  incorpora- 
tors, the  nature  and  purpose  of  the  corporation,  the  amount  of  its  capital  stock, 
the  fact  of  its  compliance  with  all  prescribed  statutory  provisions,  and  that  it 
is  duly  organized  and  exists  as  a  corporation  in  "the  name  and  of  the  kind 
specified  (sees.  2850,  2851,  2873,  2874). 

Finnegan  v.  Noeremberg,  52  Minn.  239;  53  N.  W.  1150;  Trustee  v.  Froslee,  37  Minn. 
447;  Christian  v.  Bowman,  49  Minn.  99;  House  v.  Manheinier,  67  Minn.  174;  Richards  v. 
Minn.  Sav.  Bank,  75  Minn.  196. 

6.  Corporate  Indebtedness. — There  is  no  limit  upon  the  creation  of 
corporate  indebtedness  save  as  to  certain  classes  of  corporations :  to  wit,  those 
empowered  to  take  private  property  for  public  use. 

7.  Organization  Tax.  —  Fifty  dollars  for  the  first  $50,000  or  fraction 
thereof  of  capital  stock,  and  $5  for  each  additional  510,000  or  fractional  part 
thereof.  But  corporations  raising  or  improving  five-stock  or  formed  for  the 
cultivation  or  improvement  of  farms,  gardens,  or  agricultural  lands,  growing 
beets,  canning  fruits  or  vegetables,  or  any  telephone  company  connecting  towns 
and  villages  of  less  than  2,000  inhabitants  are  not  required  to  pay  any  organiza- 
tion tax  (sec.  2873;   Laws  of  1907,  chap.  329;   Laws  of  1909,  chap.  202). 

8.  Filing  and  Recording  Fees.  — The  recording  fee  in  the  office  of  the 
Secretary  of  State  is  15  cents  per  folio.  For  issuing  certificate  of  incorporation, 
$1.  The  cost  of  certified  copy  of  certificate  of  incorporation  is  15  cents  per  folio. 
For  attaching  certificate  thereto,  50  cents.  Filing  affidavits  of  proof  of  publica- 
tion, free.  Filing  and  recording  fees  in  local  county  offices  averages  about  $3. 
If  the  certificates  are  short  this  charge  may  be  substantially  reduced.  Cost  of 
publishing  articles,  about  $15.  Usually  a  discount  of  50  per  cent  of  this  amount 
can  be  obtained  by  attorneys. 

9.  Commencing  Business. — Corporations  may  commence  business  as 
soon  as  the  articles  of  incorporation  are  filed  and  recorded  in  the  office  of  the 
Secretary  of  State  and  in  the  office  of  the  register  of  deeds  of  the  county  where 
the  principal  place  of  business  is  located,  and  as  soon  as  the  articles  are  pub- 
lished as  required  by  law,  and  an  affidavit  of  proof  thereof  filed  in  the  office  of 
the  Secretary  of  State  (sees.  2851,  2874). 

10.  Organization  Meeting.  —  Unless  the  certificate  of  incorporation 
otherwise  provides,  the  first  meeting  of  every  corporation  shall  be  called  upon 
not  less  than  three  weeks  prior  personal  notice  signed  by  one  of  the  incorporators 

387 


DIGEST    OF    INCORPORATION    ACTS. MINNESOTA. 

to  the  others,  and  to  each  subscriber  of  the  capital  stock,  specifying  the  time, 
place,  and  purpose  thereof  (sees.  2875,  3071). 

11.  Meetings  of  Stockholders  and  Directors.  —  Unless  otherwise 
provided  in  the  certificate  of  incorporation  or  corporate  by-laws,  every  annual 
meeting  shall  be  called  and  held  at  the  principal  place  of  business  upon  three 
weeks  published  notice  thereof  signed  by  the  secretary  of  the  corporation 
(sees.  2875,  2876,  2877,  3071). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  at  least  three  directors,  each  of  whom  must  be  a  stockholder. 
A  majority  of  the  directors  shall  constitute  a  quorum  for  the  transaction  of 
business  (sec.  2858).  There  are  no  residential  requirements.  The  statute  pro- 
vides that  the  president  of  every  domestic  corporation  shall  be  a  director. 
Directors  may  be  classified  with  respect  to  the  time  for  which  they  shall  severally 
hold  office.  The  several  classes  to  be  elected  for  different  terms,  provided  that 
no  class  shall  be  elected  for  a  term  of  not  less  than  one  or  more  than  five  years 
and  that  the  term  of  office  of  at  least  one  class  shall  expire  each  year  (sec.  2860). 
Unless  otherwise  provided  in  the  certificate  or  by-laws,  each  stockholder  shall 
be  entitled  to  one  vote  in  person  or  by  proxy  for  each  share  held  by  him.  No 
stock  can  be  voted  at  any  election  within  twenty  days  after  its  transfer  on  the 
books  of  the  coiporation  (sec.  2861).  If  the  certificate  of  incorporation  so 
provides  the  right  of  cumulating  votes  for  directors  may  be  exercised  by  the 
stockholders  (sec.  2862). 

b.  Liabilities. — The  act  provides  that  every  officer  who  knowingly  and 
wilfully  subscribes  or  makes  any  false  statement,  false  .report,  or  false  entry  in 
or  upon  any  of  the  books,  papers,  or  documents  of  a  corporation,  or  shall  know- 
ingly and  wilfully  subscribe  or  exhibit  any  false  payment  book  or  document 
with  intent  to  deceive  any  person  or  officer  authorized  to  examine  the  financial 
condition  of  such  corporation,  or  shall  knowingly  or  wilfully  subscribe  or  make 
any  false  report  whatsoever,  shall  be  guilty  of  a  felony  and  be  punishable  by 
imprisonment  in  the  State  prison  for  not  less  than  one  nor  more  than  ten  years 
(sees.  2865,  2869,  2884,  2885,  3069,  3071,  3171;  Laws  of  1909,  chap.  479;  see 
also  sees.  5116-5120). 

The  corporation  act  provides  that  if  the  directors  shall  pay  a  dividend  when 
such  corporation  is  insolvent,  knowing  such  corporation  to  be  insolvent,  or 
that  such  dividend  would  render  it  so,  or  when  its  payment  would  render  it 
insolvent,  those  assenting  thereto  shall  be  jointly  and  severally  liable  in  an 
action  on  the  statute  for  all  debts  due  from  such  corporation  at  the  time  of  any 
such  dividend.  Every  officer  who  shall  neglect  or  refuse  to  perform  any  duty 
imposed  upon  him  by  law  shall  be  liable  for  all  corporate  debts  contracted 
during  the  period  of  such  neglect.  If  the  corporation  shall  violate  any  pro- 
vision of  law  whereby  it  becomes  insolvent  the  directors  ordering  or  assenting 
to  such  violation  shall  be  liable  in  an  action  under  the  statute  for  all  debts  con- 
tracted after  such  violation  (sec.  3069). 

13.  Stockholders'  Liabilities.  —  Stockholders  in  all  classes  of  corpora- 
tions are  liable  in  any  event  to  the  amount  of  stock  subscribed  by  them  and 
unpaid  (sec.  2865).  Stockholders  of  all  ordinary  business  corporations  that 
may  be  organized  under  the  General  Act,  except  those  organized  to  carry  on 
exclusively  a  manufacturing  or  mechanical  business,  are  liable  to  the  amount 
of  stock  held  or  owned  by  them.  This  is  a  constitutional  liability  not  requiring 
any  statute  to  put  it  into  effect,  the  Supreme  Court  having  held  it  to  be  self- 
executing.     Stockholders  in  corporations  organized  to  carry  on  an  exclusively 

388 


DIGEST    OF    INCORPORATION    ACTS.  —  MINNESOTA. 

manufacturing  business  or  a  mechanical  business  are  only  liable  to  the  amount 
of  their  unpaid  stock  subscriptions  (Cons.,  Art.  X.;  sees.  3,  2865).  Stock- 
holders are  liable  for  failure  on  the  part  of  the  corporation  to  comply  sub- 
stantially with  the  provisions  as  to  organization  and  publicity.  They  are  also 
liable  for  personally  violating  any  of  said  provisions  in  the  transaction  of  any 
corporate  business,  as  officer,  director,  or  member,  and  for  fraudulent  or  dis- 
honest conduct  in  the  discharge  of  their  official  duty  (sec.  286.3).  Stockholders  in 
manufacturing  or  mechanical  corporations  are  also  liable  to  the  extent  of  capital 
illegally  withdrawn  from  the  corporation  and  received  by  them  (sec.  3069). 

Wallace  v.  Company,  70  Minn.  321;  73  NT.  W.  189;  Frost  v.  Company,  57  Minn  325; 
59  N.  W.  30s;  1'.  F.  Co.  v.  Company,  64  Minn.  386;  07  N.  W.  217;  Famsworth  u.  Robbing 
36  Minn.  369;    31  N.  W.  349;    S.  M.  Co.  v.  Company,  81  Minn.  294;    84  N.  W.  109. 

14.  Stock  Certificates. —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  the  president  or  vice-president  and  by  the 
secretary  under  the  corporate  seal  (sees.  2861,  2S79).  The  par  value  of  the 
shares  may  be  any  amount  not  less  than  $1  nor  more  than  $100  (sees.  2849, 
2868.)  Under  sec.  2830  the  par  value  of  shares  of  mining  and  manufactur- 
ing companies  is  fixed  at  not  less  than  §10  and  not  more  than  $100  each  (see 
also  sec.  3068). 

15.  Preferred  Stock.  —  Corporations  having  capital  stock  divided  into 
classes,  unless  specifically  authorized,  shall  not  issue  any  shares  for  a  less  amount 
to  be  actually  paid  in  on  each  share  than  the  par  value  of  the  shares  as  issued ; 
provided  that  railroad,  navigation,  and  manufacturing  corporations  and  corpora- 
tions for  buying,  holding,  improving,  selling,  and  dealing  in  lands,  tenements, 
hereditaments,  real,  mixed,  and  personal  property,  created  or  organized  under 
this  chapter,  or  under  any  charter  or  special  act  of  incorporation  heretofore 
passed,  shall  have  power  to  create,  issue,  and  dispose  of  such  amount  of  special, 
preferred,  or  full  paid  stock  of  the  capital  stock  of  such  corporation,  as  may  be 
deemed  advisable  by  the  board  of  directors  of  such  corporation.  Provided, 
that  any  corporation  may  by  its  articles  of  incorporation,  or  by  any  amended 
articles  of  its  articles  of  incorporation,  provide  for  special,  preferred,  and  common 
stock  of  the  capital  stock  of  such  corporation ;  and  any  corporation  heretofore 
or  hereafter  organized,  without  changing  its  articles  of  incorporation,  may 
issue  its  capital  stock  as  a  part  special  and  a  part  preferred  and  a  part  common, 
or  a  part  common  and  a  part  special  or  preferred,  by  direction  of  its  board  of 
directors,  when  so  authorized  by  a  majority  of  its  stockholders  at  its  annual 
meeting,  or  at  a  meeting  called  for  that  purpose ;  and  said  board  of  directors 
when  so  authorized  by  said  meeting  of  saici  stockholders  may  give  such  pref- 
erences as  it  may  deem  best  to  such  special  or  preferred  stock,  or  such  special 
and  preferred  stock  (sec.  2878). 

16.  Payment  of  Capital  Stock.  —  Stock  is  payable  in  money  or  money's 
worth.  Stock  cannot  be  issued  for  a  less  amount  to  be  actually  paid  in  on 
each  share  than  the  par  value  of  the  shares  so  issued  (sec.  2853).  The  foregoing 
provision  does  not  apply  to  such  corporations  as  are  specially  authorized  to 
issue  and  dispose  of  special,  preferred,  or  full  paid  stock  in  such  amounts  as 
may  be  deemed  advisable  by  their  board  of  directors  (sec.  2878). 

17.  Books.  —  Books  of  account  shall  be  kept,  and  shall  at  all  reasonable 
times  be  open  to  inspection,  in  the  county  where  such  corporation  is  located  or 
at  the  office  of  the  treasurer  within  the  State  (sees.  I'Sfil,  2X09).  A  copy  of  the 
by-laws  of  every  corporation,  together  with  the  names  of  its  officers  and  a  state- 
ment of  the  capital  stock  actually  in  good  faith  subscribed  for  the  amount  and 

389 


DIGEST    OF    INCORPORATION    ACTS.  —  MINNESOTA. 

character  of  payments  actually  paid  thereof,  must  be  kept  posted  by  the  corpo- 
ration at  its  principal  place  of  business. 

18.  Office  and  Agent.  —  Every  corporation  must  maintain  an  office  within 
the  State,  and  must  at  all  times  have  an  agent  within  the  State  upon  whom 
process  may  be  served  (sees.  2870,  3071). 

19.  Reports.  —  The  only  report  required  of  any  domestic  corporation  is 
that  relating  to  taxation.  The  president,  secretary,  or  principal  accounting 
officer  of  any  corporation  shall  make  out  and  deliver  to  the  assessor  of  the 
county  wherein  such  corporation  has  personal  property  a  sworn  statement  of 
the  amount  of  its  capital  stock,  setting  forth  particularly  (1)  the  name  and 
location  of  the  company  or  association  ;  (2)  the  amount  of  capital  stock  author- 
ized and  the  number  of  shares  into  which  it  is  divided;  (3)  the  amount  of 
capital  stock  paid  up ;  (4)  the  market  value,  or  if  they  have  no  market  value, 
then  the  actual  value  of  the  shares  of  stock ;  (5)  the  value  of  its  real  property, 
if  any;  (6)  the  value  of  its  personal  property;  (7)  the  total  amount  of  all 
indebtedness  except  the  indebtedness  for  current  expenses,  excluding  from 
such  expenses  the  amount  paid  for  the  purchase  or  improvement  of  property 
(sec.  838). 

20.  Anti-Trust  Statute.  —  Under  the  Act  of  April  10,  1901,  all  pools, 
trusts,  and  conspiracies  for  certain  unlawful  purposes  are  declared  illegal  (sees. 
2098,  5168).     (See  also  Laws  of  1907,  chap.  269.) 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  — The  charter  may 
be  forfeited  for  violation  of  law,  for  misuser  and  non-user  of  corporate  powers 
(sec.  58).  It  may  also  be  forfeited  if  the  charter  was  procured  on  some  fraudu- 
lent suggestion,  or  the  concealment  of  material  facts  by  the  persons  incor- 
porating, or  some  of  them,  or  with  their  knowledge  and  consent  (sees.  3170, 
3174).  The  charter  may  be  forfeited  also  if  it  remains  insolvent  for  one  year, 
or  for  one  year  refuses  to  discharge  its  debts,  or  for  one  year  suspends  its  lawful 
business  (sec.  3174);  also  for  violation  of  Anti-Trust  Acts  (sees.  5168,  5169). 

M.  C.  R.  Co.  v.  Melvin,  21  Minn.  339. 

22.  Amendments.  —  The  certificate  of  incorporation  may  be  amended  in 
respect  to  amount  of  stock  or  any  other  matter  which  the  original  certificate 
of  a  corporation  of  the  same  kind  might  lawfully  have  contained,  by  the  adop- 
tion of  a  resolution  specifying  the  proposed  amendment  at  a  regular  or  at  a 
special  meeting  called  for  that  expressly  stated  purpose  in  either  of  the  follow- 
ing ways:  (1)  By  a  majority  vote  of  all  of  its  shares,  if  a  stock  corporation,  or 
if  not  (2)  by  a  majority  vote  of  its  members :  or  in  either  case  (3)  by  a  majority 
vote  of  its  entire  board  of  directors,  trustees,  or  other  managers,  within  one 
year  after  having  been  thereto  duly  authorized  by  specific  resolution  duly 
adopted  at  said  meeting  of  stockholders  or  members,  and  by  causing  such 
resolution  to  be  expressed  in  a  certificate  duly  executed  by  its  president,  sec- 
retary, or  other  presiding  regular  officers  under  its  corporate  seal,  and  approved, 
filed,  recorded,  and  published  in  the  manner  prescribed  for  the  execution,  ap- 
proval, filing,  recording,  and  publishing  of  a  like  original  certificate  (sec.  2871). 

Any  corporation  may,  without  change  of  its  certificate  of  incorporation 
when  its  board  of  directors  do  so  authorize  by  a  majority  vote  of  its  stock- 
holders at  its  annual  meeting,  or  at  a  meeting  called  for  that  purpose,  issue  its 
capital  stock,  part  special  and  part  preferred  and  part  common,  or  part  common, 
part  either  special  or  preferred,  and  give  such  preference  as  it  deems  best  to 
such  special  or  preferred  stock  (sec.  2878). 

390 


DIGEST    OF    INCORPORATION    ACTS.  —  MINNESOTA. 

23.  Extension  of  Corporate  Existence.  —  Express  provision  is  made  for 
renewing  the  corporate  existence  from  time  to  time  for  a  further  term  not 
exceeding  thirty  years,  whenever  a  three-fourths  vote  of  the  stock  represented 
at  any  regular  meeting  or  at  any  special  meeting  called  for  that  purpose  shall 
adopt  a  resolution  to  that  effect,  and  those  desiring  it  shall  have  purchased  at 
its  value  the  stock  of  those  opposed  thereto.  No  resolution  of  extension  of 
corporate  existence  shall  take  effect  until  a  duly  certified  copy  thereof  shall  have 
been  filed,  recorded,  and  published  in  the  same  manner  as  in  the  case  of  an 
original  certificate  (sees.  2856,  2857;  Laws  of  1911,  chap.  24-4;  see  also  as  to 
reorganization  of  existing  corporations,  sec.  2S86). 

2  !-.    Annual  License  Tax.  —  There  is  no  annual  license  tax. 

2,").  Dissolution.  —  Corporations  may  be  dissolved  upon  application  to  the 
courts  (sees.  2882,  2883,  3171-3178,  3190:  Laws  of  1909,  chap.  276). 

26.  Foreign  Corporations.  —  Every  foreign  corporation  before  doing 
business  within  the  State  must  file  in  the  office  of  the  Secretary  of  State  a  copy 
of  its  charter  or  articles  of  incorporation  duly  certified  and  authenticated.  They 
must  also  maintain  an  office  within  the  State  and  appoint  an  agent  resident 
therein  upon  whom  sen-ice  of  process  may  be  had  (sees.  2888,  2889).  At  the 
time  of  fifing  a  copy  of  its  charter  or  articles  of  incorporation  with  the  Secre- 
tary of  State,  there  must  also  be  filed  with  that  official,  a  statement  duly  sworn 
to  showing  the  proportion  of  the  capital  stock  of  said  corporation  that  is  repre- 
sented by  its  property  located  and  business  transacted  in  the  State,  and  such 
corporation  shall  pay  into  the  State  treasury  850  for  the  first  850,000  or  frac- 
tional part  of  such  proportion  of  capital  stock,  and  a  further  sum  of  $5  for  every 
additional  810,000  or  fractional  part  of  such  proportion  of  capital  stock,  and 
no  increase  of  capital  stock  of  any  corporation  shall  be  valid  until  the  cor- 
poration shall  have  paid  into  the  State  treasury  85  for  every  810,000  or  frac- 
tional part  thereof  of  such  increase  of  such  proportion  of  capital  stock  of  such 
corporation.  In  determining  the  proportionate  share  of  capital  stock  upon 
which  license  fees  shall  be  paid  as  aforesaid,  the  business  of  such  corporation 
transacted  in  and  out  of  the  State  during  the  year  immediately  preceding  the 
filing  of  its  articles  or  certificate  as  above  provided  must  be  considered  and 
have  control.  Upon  compliance  with  the  above  provision  the  Secretary  of 
State  issues  a  certificate  to  such  foreign  corporation  authorizing  it  to  do  busi- 
ness in  the  State,  stating  the  amount  of  its  capital  stock  and  the  proportion 
thereof  which  is  represented  in  the  State.  This  certificate  is  valid  for  a  period 
of  thirty  years  from  and  after  the  date  of  such  certificate  (sees.  288S-2890). 

State  v.  Company,  43  Minn.  17;  44  N.  W.  1032;  Heileman  Co.  v.  Peimeisl,  85  Minn. 
121;    88  N.  \Y.  441;    R.  I.  P.  Co.  v.  Peterson  (Minn.),  101  N.  \Y.  616. 


391 


DIGEST    OF    INCORPORATION    ACTS.  —  MISSISSIPPI. 


MISSISSIPPI. 

(The  references  cited  below  are  to  the  Mississippi  Code  of  1906,  unless  otherwise 
stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. 

—  The  Business  Corporation  Act  of  Mississippi  is  found  in  the  Annotated 
Code  of  1906,  chap.  24,  sees.  897-938  inclusive.  Under  this  act  corpora- 
tions may  be  created  for  every  lawful  purpose,  except  for  the  construction 
and  operation  of  a  railroad  other  than  street  railroads  and  the  carrying  on  of 
an  insurance  business.  Special  acts  are  provided  for  railroad  and  insurance 
corporations. 

2.  Incorporators.  —  There  must  be  at  least  two  incorporators.  There 
are  no  residential  requirements  (sec.  898). 

3.  Contents  of  the  Charter.  —  The  Charter  must  contain  (sec.  898) : 

a.  Purposes.  —  Any  number  of  purposes,  not  including  those  for  which 
corporations  can  be  organized  only  under  special  acts,  may  be  inserted. 

b.  Incorporators.  —  The  names  of  the  corporators  must  be  inserted. 

c.  Name.  —  Similarity  of  names  is  forbidden  (sec.  930). 

d.  Corporate  Powers.  —  The  powers  to  be  exercised  must  be  set  forth. 

e.  Duration.  —  This  cannot  exceed  fifty  years. 

/.  Capital  Stock.  —  There  is  no  maximum  or  minimum  amount  of  capital 
stock  fixed  by  law  for  corporations.  There  is  an  implied  limit  by  reason  of 
the  provision  that  no  corporation,  except  manufacturing  companies,  may  hold 
real  and  personal  estate  exceeding  $1,000,000  in  amount.  Manufacturing  com- 
panies may  purchase  and  hold  property  to  the  amount  of  $2,000,000. 

g.  Any  provisions  that  may  be  desired  for  the  regulation  of  the  internal 
affairs  of  the  corporation  (sec.  833). 

4.  Statutory  Powers.  — The  act  enumerates  the  common  law  powers  of 
corporations  (sec.  901).  All  domestic  business  corporations  created  under  the 
provisions  of  this  chapter  or  the  laws  of  this  State  may  hold  personal  property 
in  any  amount  necessary  and  proper  for  its  uses  and  purposes,  and  every  such 
corporation  except  manufacturing  corporations  may  hold  land  to  an  amount 
not  exceeding  $1,000,000  in  value,  but  building,  machinery,  or  fixtures  on  such 
land  shall  be  excluded  in  valuing  the  land.  And  a  corporation  shall  not  have  a 
trust,  use,  or  "benefit  in  any  property  held  in  the  name  of  any  person  or  cor- 
poration for  its-  use,  either  expressly  or  secretly,  to  an  amount  greater  than  it 
may  lawfully  hold,  nor  shall  any  corporation  employ  its  capital,  money,  or  either 
in  any  way  than  in  pursuit  of  its  legitimate  "business,  and  the  corporation  offend- 
ing against  any  of  these  provisions  shall  forfeit  its  charter,  and  shall  also  forfeit 
to  the  State  all  real  estate  held,  even  that  which  it  may  lawfully  hold ;  but  an 
increase  in  the  market  value  of  real  estate  after  it  has  been  acquired  by  a  cor- 
poration over  the  limit  it  was  or  is  authorized  to  hold  shall  not  operate  to 
forfeit  the  charter  or  any  part  of  the  real  estate  of  such  corporation.  Nothing 
herein  contained  shall  prevent  a  corporation  from  taking  land  or  a  hen  on  land 
to  a  greater  amount  than  it  may  lawfully  hold  in  payment  of  or  as  security  for 
a  debt,  if  the  same  shall  not  be  held  for  a  longer  period  than  ten  years  (Laws  of 
1906,  chap.  252).  Corporations  are  forbidden  to  own  or  purchase  the  capital 
stock  of  other  corporations,  or  to  acquire  the  franchise  plant,  or  equipments 

392 


DIGEST    OF    INCORPORATION    ACTS.  —  MISSISSIPPI. 

of  other  corporations  (Laws  of  1900,  sec.  5,  chap.  SS;  Laws  of  1910,  chap. 
223).  Corporations  are  expressly  given  power  to  execute  bonds  in  suits  in 
which  the  corporation  is  interested  (sec.  907).  Voting  by  proxy  is  permitted ; 
also  forfeiture  of  stock  for  non-payment  of  assessments  (sees.  901-903,  908). 
May  cumulate  votes  in  election  of  directors  (sec.  902). 

Greenville  Compress  &  Warehouse  Co.  v.  Company,  70  Miss.  669;   13  Sou.  879. 

5.  Procuring  the  Charter. — The  charter  must  be  signed  and  acknowl- 
edged by  each  of  the  incorporators.  It  must  then  be  published  for  three  con- 
secutive weeks  in  a  newspaper  published  at  the  domicile  of  the  corporation. 
After  publication  it  must  be  submitted  for  approval  to  the  Governor,  who  is 
required  to  take  advice  of  the  Attorney-General  as  to  the  constitutionality 
and  legality  of  the  provisions  of  the  charter  (sec.  89S).  If  the  charter  i>  ap- 
proved, the  governor  so  endorses  such  approval  thereon,  and  the  Secretary  of 
State  shall  affix  the  State  seal  thereto.  Upon  the  payment  of  the  organization 
tax  and  upon  recording  the  charter  in  the  office  of  the  Secretary  of  State  the 
corporate  existence  commences.  The  law  provides  that  it  shall  not  be  a  de- 
fence to  any  suit  against  the  corporation  that  there  was  a  defect  or  informality 
in  the  organization  thereof  (sees.  833,  835).  The  charter  must  be  recorded  also 
in  the  office  of  the  clerk  of  the  Chancery  Court  of  the  county  in  which  the  cor- 
poration does  business.  Collateral  inquiry  into  the  legality  of  corporate  ex- 
istence is  forbidden  by  statute  (sees.  89S,  900,  906,  916,  917). 

6.  Corporate  Indebtedness.  —  Domestic  business  corporations  are  not 
permitted  to  contract  debts  in  excess  of  the  amount  of  the  capital  actually 
paid  in  (sec.  924).  No  loan  of  money  can  be  made  by  the  corporation  to  one 
of  its  stockholders  (sec.  922). 

Fargason  v.  Company,  78  Miss.  65;  27  Sou.  877. 

7.  Organization  Tax.  —  Capital  stock  not  exceeding  $10,000,  $20;  be- 
tween 810,000  and  $30,000,  $40;  between  $30,000  and  $50,000,  $60';  exceeding 
$50,000  one-tenth  of  one  per  cent,  but  no  fee  to  exceed  $250  (sec.  938). 

8.  Filing  and  Recording  Fees.  —  There  is  no  filing  or  recording  fee 
imposed  other  than  the  organization  tax  required  to  be  paid  to  the  Secretary 
of  State.  The  Secretary  of  State  is  entitled  for  other  services  as  follows:  For 
recording  each  amendment  to  the  charter,  $5 ;  for  each  certified  copy  of  domestic 
or  foreign  charters,  $10;  for  filing  articles  of  consolidation,  $25;  for  filing 
other  articles  of  agreement  between  corporations,  $20 ;  for  filing  each  charter 
of  a  foreign  corporation,  $15  (sec.  938). 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  the  charter  is  duly  executed,  published,  and  approved  by  the  gov- 
ernor, the  organization  tax  paid,  and  the  charter  recorded  in  the  office  of  the 
Secretary  of  State  and  with  the  clerk  of  the  Chancery  Court  of  the  county  in 
which  the  corporation  does  business  (sees.  898-900).  Before  commencing 
business  all  corporations  must  within  thirty  days  after  organization  make 
report  thereof  to  the  Secretary  of  State,  who  is  required  to  furnish  blank  forms 
for  that  purpose,  as  provided  by  statute.  The  Secretary  of  State  shall  enter 
such  report  and  index  the  same  in  a  record  to  be  kept  for  that  purpose  in  his 
office  (sees.  930,  931). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  State.  Unless  the  incorporators  sign  an  agreement  fixing  the  time 
and  place  for  the  organization  meeting  of  the  corporation,  a  notice  signed  by 
one  or  more  persons  named  in  the  charter  must  be  published  in  some  business 

393 


DIGEST    OF    INCORPORATION    ACTS.  —  MISSISSIPPI. 

newspaper  for  at  least  ten  days  before  the  time  appointed  for  such  meeting. 
At  this  meeting  the  by-laws  must  be  adopted  and  the  board  of  directors  chosen. 
Immediately  after  the  adjournment  of  the  organization  meeting  the  board  of 
directors  elected  thereat  should  meet  and  elect  such  officers  as  may  be  provided 
for  in  the  by-laws  (sec.  901). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  within  the  State.  Directors'  meetings  may  be  held  without  the 
State  if  the  by-laws  so  provide  (sec.  902). 

Thompson  v.  Company,  68  Miss,  423;  9  Sou.  821. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
The  corporation  may  have  any  number  of  directors  desired.  There  are  no 
residential  requirements.  No  person  can  serve  on  the  board  of  directors  who 
is  engaged  or  interested  in  a  competing  business,  without  the  consent  of  a  major- 
ity in  interest  of  the  stockholders  thereof  (sec.  902). 

b.  Liabilities.  —  Directors  are  jointly  and  severally  liable  for  the  payment 
of  dividends  when  the  company  is  insolvent  or  when  such  payment  would 
render  it  insolvent.  Directors  are  also  liable  for  illegal  withdrawal  of  capital 
stock.  Officers  and  directors  are  jointly  and  severally  liable  for  permitting 
the  loan  of  money  to  stockholders.  They  are  also  liable  in  case  debts  are  con- 
tracted in  excess  of  the  amount  of  capital  stock  paid  in  (sees.  922-924). 
Directors  are  also  liable  for  contributing  corporate  funds  for  political  purposes 
(Laws  of  190S,  chap.  124). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  in  any  event  to 
the  amount  of  stock  subscribed  by  them  and  unpaid  (sees.  909,  921). 

Scott  v.  Windham,  73  Miss.  76;   16  Sou.  206. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  officers  as  the  by-laws  may  prescribe. 
The  par  value  of  shares  may  be  any  amount  (sees.  898,  909). 

15.  Preferred  Stock.  —  The  act  does  not  provide  in  terms  for  the  issuance 
of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  The  statute  seems  to  contemplate  that 
stock  must  be  paid  for  either  in  money  or  money's  worth.  The  act  provides 
that  a  note,  obligation,  or  security  of  any  kind  given  or  transferred  by  any 
subscriber  for  stock  shall  not  be  considered,  taken,  or  held  as  payment  of  any 
part  of  the  capital  stock  of  the  company  (sees.  909,  921). 

Fargason  v.  Company,  78  Miss.  65 ;  27  Sou.  877. 

17.  Books.  —  Stock  books  must  be  kept  in  which  shall  be  recorded  the 
necessary  data  relative  to  transfers  of  stock  (sec.  909). 

18.  Office  and  Agent.  —  The  statute  by  implication  woidd  seem  to  require 
the  maintenance  of  a  domiciliary  office  within  the  State. 

19.  Reports.  —  Within  thirty  days  after  organization  of  business  corpora- 
tions they  must  make  a  report  thereof  to  the  Secretary  of  State  upon  blank 
forms  provided  by  him  for  that  purpose.  This  report  gives  the  date  of  incorpo- 
ration and  organization,  the  place  where  organized,  the  names  of  the  directors 
and  officers  for  the  ensuing  year.  It  also  requires  the  name  of  the  post-office 
address  of  the  president  and  secretary.  This  report  must  be  certified  by  the 
president  and  attested  by  the  secretary  of  the  corporation  (sees.  930,  931). 

20.  Anti-Trust  Statute.  —  All  pools,  trusts,  or  combinations  for  certain 

394 


DIGEST    OF    ^CORPORATION    ACTS.  —  MISSISSIPPI. 

designated  purposes  are  declared  illegal  (chap.  145,  sees.  5002-5021  ;   Laws  of 
190S,  chap.  119). 

Woodberry  o.  McClurg,  78  Miss.  831;  29  Sou.  514. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  for  entering  unlawful  trusts  or  combines  or  for  misuse  or  abuse  of 
its  powers  (chap.  145,  sees.  4017-4020,  5010;   Laws  of  1906,  chap.  252). 

22.  Amendments.  — The  act  provides  in  the  case  of  amendments  as  fol- 
lows: Every  corporation  desiring  an  amendment  of  its  charter  shall  make 
publication  in  the  same  maimer  as  is  required  in  the  case  of  original  charters, 
setting  forth  at  length  in  such  publication  the  nature  and  extent  of  the  amend- 
ment desired,  and  the  covenant  that  the  Attorney-General  may  grant  the 
same.  Every  amendment  shall  be  recorded  at  length  in  the  office  of  the  Secre- 
tary of  State,  and  in  the  office  of  the  clerk  of  the  Chancery  Court  of  the  county 
in  which  the  corporation  does  business  (sees.  899,  900). 

23.  Extension  of  Corporate  Existence.  —  The  act  refers  to  renewals  of 
charters,  and  makes  express  provision  with  reference  thereto  (sec.  899). 

24.  Dissolution.  —  Corporations  may  be  dissolved  upon  application  to  the 
courts  (sees.  912,  913).  Whenever  stockholders  in  any  corporations  formed 
under  this  chapter  shah  desire  to  surrender  their  charter,  a  meeting  of  the  corpo- 
ration shall  be  called  for  that  purpose  after  three  weeks'  notice  published  in  some 
newspaper  at  the  domicile  of  the  corporation,  and  a  copy  of  such  paper  shall  be 
mailed  to  each  stockholder  at  his  post-office  address  if  known,  and  if  at  said 
meeting  two-thirds  of  the  stockholders  of  the  company  shall  vote,  either  in  per- 
son or  by  proxy,  for  the  dissolution  of  the  corporation,  a  petition  shall  be  filed 
in  the  Chancery  Court  of  the  domicile  of  the  corporation  in  the  name  of  the 
corporation  and  against  the  dissenting  stockholders  if  any,  and  if  none,  the 
proceedings  shall  be  ex  ■parte.  If  upon  the  hearing  of  the  petition  it  .shall  appear 
that  two-thirds  of  the  stockholders  have  voted  for  such  dissolution,  and  that 
it  would  be  to  the  best  interests  of  all  parties  in  interest  that  the  corporation 
be  dissolved,  then  liquidators  of  the  corporation  shall  be  appointed  by  the 
Chancery  Court,  not  exceeding  three  in  number,  who  shall  give  bond  in  such 
sum  as  the  court  may  fix,  conditioned  to  faithfully  perform  their  duties  as 
liquidators  ;  and  if  there  are  creditors  of  such  corporation,  such  liquidators  shall 
pay  out  of  the  assets  of  the  corporation  the  debts  of  the  corporation  in  full,  if 
there  be  sufficient  funds,  and  if  not,  then  pro  rata;  and  if  there  shall  be  any 
assets  left  after  paying  the  debts,  then  the  same  shall  be  distributed  among  the 
shareholders.  If  there  are  no  debts,  the  said  liquidators  shall  distribute 
assets  among  the  stockholders.  The  Chancery  Court  may  allow  the  liquidators 
such  compensation  as  may  be  just  and  proper.  When  the  assets  of  the  corpora- 
tion  have  been  fully  liquidated  and  distributed,  they  shall  report  to  the  Chancery 
Court,  and  the  Chancery  Court  shall  thereupon  enter  a  decree  dissolving  the 
corporation,  confirming  the  acts  of  the  liquidators  and  ordering  their  dis- 
charge, and  a  certified  copy  of  such  decree  shall  be  filed  in  the  office  of  the 
Secretary  of  State,  and  after  filing  of  said  decree  in  said  office  the  corporation 
shall  be  dissolved.  And  all  rights,  privileges,  judgments,  and  franchises  which 
had  theretofore  been  granted  to  such  corporation  by  the  State  or  any  county 
or  municipal  corporation  shall  revert  back  and  become  the  property  of  the 
grantor  (sec.  93 

'2.').   Annual  License  Tax. — There  is  no  annual  license  tax  imposed. 
20.   Foreign    Corporations.  —  Every   foreign   corporation    before    doing 

151)5 


DIGEST    OF    INCORPORATION   ACTS.  —  MISSISSIPPI. 

business  within  the  State  must  file  in  the  office  of  the  Secretary  of  State  a  copy 
of  its  charter  or  articles  of  incorporation  duly  certified  and  authenticated.  The 
same  must  be  duly  certified  by  the  president,  secretary,  or  other  chief  executive 
officer  of  such  corporation,  and  the  corporate  seal  attached  thereto  (sec.  935). 

If  foreign  corporations  desire  to  become  domesticated  they  may  do  so  by 
filing  with  the  Governor  of  the  State  a  copy  of  their  charter  or  articles  of  associa- 
tion. Upon  doing  so  the  Governor  shall  first  take  the  advice  of  the  Attorney- 
General  of  the  State  as  to  the  constitutionality  and  legality  of  the  provisions 
thereof,  and  if  the  Attorney-General  shall  certify  to  the  Governor  that  he  finds 
nothing  in  said  charter  or  articles  in  violation  of  the  constitutional  laws  of 
the  State,  the  Governor  of  the  State  may  approve  the  same,  and  he  shall  write 
his  approval  thereon  and  sign  his  name  thereto,  and  shall  cause  the  seal  of  the 
State  to  be  thereto  affixed  by  the  Secretary  of  State.  But  the  Governor  may 
require  amendments  or  alterations  to  be  made  previous  to  signing  the  same, 
or,  if  deemed  expedient  by  him  in  the  matter,  withhold  his  approval  entirely. 
The  Secretary  of  State  shall  then  cause  all  such  charters  or  articles  of  incorpora- 
tion, after  he  has  received  the  same  from  the  Governor  with  his  approval,  to  be 
duly  recorded  in  a  book  to  be  kept  for  that  purpose,  and  shall  cause  to  be  issued 
to  such  corporation  a  copy  of  the  charter  or  articles  so  filed,  properly  certified 
under  the  seal  of  his  office.  But  such  corporation  shall  pay  to  the  Secretary  of 
State  the  same  fees  required  of  similar  corporations  formed  under  the  laws  of 
Mississippi.  Any  corporation  shall,  upon  compliance  with  the  foregoing  pro- 
visions, become  to  all  intents  and  purposes  a  domestic  corporation.  In  any 
action  against  such  domesticated  foreign  corporation,  service  upon  it  may  be 
served  upon  the  Secretary  of  State  in  its  behalf  (sees.  914-920  inclusive). 
The  fee  to  the  Secretary  of  State  for  filing  charter  of  foreign  corporations,  $15 
(sec.  935;  Laws  of  1906,  chap.  114). 

Williams  v.  Bank  of  Commerce,  71  Miss.  858;    16  Sou.  238. 


396 


DIGEST    OF    INCORPORATION    ACTS.  —  MISSOURI. 


MISSOURI. 

(The  references  cited  below  are  to  the  Revised  Statutes  of  1909,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Missouri  is  found  in  the  Revised  Statutes  of 
1909,  sees.  2963-3047,  3339-33S2.  Special  acts  are  provided  for  banking,  bond, 
investment,  booming  and  rafting,  savings  and  loan,  building,  railway,  street 
railway,  telegraph,  telephone,  and  trust  companies.  (See  also  Laws  of  1905, 
p.  97.)  . 

2.  Incorporators.  —  Any  number  not  less  than  three.  There  are  no  resi- 
dential requirements  (sec.  3339). 

3.  Contents  of  the  Articles  of  Agreement.  —  The  articles  must  set 
forth:    (See  Laws  of  1911,  pp.  148-149). 

a.  Name.  —  Similarity  of  names  is  forbidden.  When  the  name  of  a  person 
or  firm  is  assumed,  it  must  designate  the  nature  of  the  business  to  be  carried 
on  and  end  with  "company"  or  "corporation"  (sec.  297S). 

b.  Domiciliary  Office.  —  The  name  of  the  city  or  town  in  the  county  in  which 
the  corporation  is  to  be  located  (sec.  1312). 

c.  Capital  Stock.  —  The  amount  of  capital  stock,  the  number  of  shares  into 
which  it  is  to  be  divided  and  the  par  value  thereof,  together  with  a  statement 
that  the  same  has  been  bona  fide  subscribed  and  one-half  thereof  actually  paid 
up  in  lawful  money  of  the  United  States,  or  in  property  of  the  full  value 
thereof,  and  in  the  custody  of  the  persons  named  as  the  first  board  of 
directors.  Capital  stock  cannot  be  less  than  $2,000  nor  more  than  $50,000,000 
(sec.  3347). 

d.  Stockholders.  —  The  names  and  places  of  residence  of  the  stockholders 
and  the  number  of  shares  subscribed  by  each  (sec.  3339). 

e.  Board  of  Directors.  —  Number  of  directors  and  names  of  the  board  for 
the  first  year.  There  must  be  not  less  than  three  nor  more  than  thirteen.  Three 
of  these  must  be  citizens  and  residents  of  the  State,  and  all  must  be  stockholders 
(sees.  2992,  3035,  3339,  3341). 

/.  Duration.  —  The  number  of  years  the  corporation  is  to  continue,  which 
must  not  exceed  fifty  years  (sec.  3339). 

g.  Purposes.  —  The  statute  specifies  eleven  classes  of  corporations  which 
may  be  organized  under  the  General  Act  (sec  3346). 

Provided  that  if  any  part  of  the  capital  stock  is  paid  in  property,  the 
articles  of  agreement  must  give  an  itemized  description  of  such  property,  set- 
ting out  the  cash  value  of  each  item  entered,  and  sucli  itemization  shall  show 
(a)  if  such  property  be  real  estate,  the  exact  description  by  metes  and  bounds 
and  location  of  such  real  estate  and  the  actual  cash  value  of  each  tract ;  (b) 
if  such  property  be  personal  property,  such  itemization  shall  give  the  location 
of  each  class  of  personal  property  and  the  actual  cash  value  of  each  class  of 
such  personal  property.  No  stock  shall  be  issued  by  the  corporation  except 
such  as  is  actually  paid  for  at  its  par  value,  in  cash  or  in  property  of  :i  cash 
value  equal  to  the  par  value  of  the  stock.  All  stock  of  the  corporation  not 
subscribed  and  paid  for  at  the  lime  of  its  organization  may  be  sold  at  its  par 
value  by  said  corporation,  and  the  officers  of  said  corporation  shall,  upon  the 
completion  of  the  sale  of  one-fourth  of  its  subscribed  stock  thereof,  report  to 

397 


DIGEST    OF    INCORPORATION    ACTS.  —  MISSOURI. 

the  Secretary  of  State  the  amount  of  stock  sold  and  whether  the  same  has 
been  sold  for  cash  or  for  property,  and  its  value  and  itemization  thereof,  as 
provided  herein  for  the  articles  of  agreement,  and  such  report  shall  be  sworn 
to  by  all  of  the  officers   and  directors    of  said   corporation  (Laws  of    1911, 

pp.  148,  149). 

If  preferred  stock  is  desired,  the  articles  must  set  out  the  amount  thereof, 
the  number  of  shares  thereof,  the  names  of  the  subscribers  therefor,  the  num- 
ber of  shares  subscribed  by  each  person,  and  the  preferences,  priorities,  quali- 
fications, and  character  thereof,  as  provided  in  sec.  3358  of  the  Revised 
Statutes  of  Missouri,  1909  (Laws  of  1911,  pp.  148,  149). 

State  v.  McGrath,  92  Mo.  355;  5  S.  W.  29. 

4.  Statutory  Powers.  —  The  Missouri  statutes  enumerate  the  common 
law  powers  of  corporations,  and  also  confer  the  following  additional  powers: 
Permitting  the  use  of  proxies;  authorizing  cumulative  voting  for  directors; 
allowing  directors  to  forfeit  stock  for  non-payment  of  assessment ;  permitting 
the  classification  of  directors ;  allowing  the  issuance  of  preferred  stock  and  the 
issuance  of  stock  for  sendees  or  property  (sees.  2973,  29S0,  29S1,  2990). 
Corporations  engaged  in  a  similar  fine  of  business  may  consolidate  (sec.  3360). 
Bonds  may  be  issued  and  afterwards  converted  into  stock,  if  desired  (sec.  3363). 

5.  Procuring  the  Charter.  —  The  articles  must  be  signed  and  acknowl- 
edged by  the  incorporators  and  by  each  of  the  directors  named  in  the  ar- 
ticles (Laws  of  1911,  p.  150).  They  must  then  be  recorded  in  the  office  of  the 
recorder  of  deeds  of  the  county  or  city  where  the  corporation  is  to  be  located. 
A  certified  copy  of  the  articles  must  then  be  filed  with  the  Secretary  of  State, 
and  the  corporate  existence  commences  from  the  time  of  the  filing  of  such  copy. 
A  certificate  by  the  Secretary  of  State  that  such  corporation  has  been  duly 
organized  is  evidence  of  the  corporate  existence  of  the  corporation.  A  certified 
copy  of  such  certificate  must  be  filed  and  recorded  in  the  office  of  the  recorder 
of  deeds  of  the  county  in  which  the  corporation  is  organized.  Before  the  articles 
can  be  filed  in  the  office  of  the  Secretary  of  State  the  organization  tax  must  be 
paid  to  the  State,  and  a  duplicate  receipt  of  the  State  Treasurer  showing  the 
payment  of  such  tax  must  be  filed  with  the  Secretary  of  State  (sees.  2975, 
2976,  3340,  3341). 

Hurt  v  Salisbury,  55  Mo.  310;  Com'rs  v.  Shields,  62  Mo.  247;  Granby  Co.  v.  Richards, 
95  Mo.  106;  8  S.  W.  246;   Hyatt  v.  Van  Riper  (Mo.),  78  S.  W.  1043. 

6.  Organization  Tax.  —  Fifty  dollars  for  the  first  fifty  thousand  dollars 
or  less  of  capital  stock,  and  $5  for  each  additional  ten  thousand  dollars  (sec. 

2976). 

7.  Filing  and  Recording  Fees.  —  For  issuing  and  recording  certificate  of 
corporate  existence,  $1.50  (sec.  10716).  For  filing  and  recording  articles  of  incor- 
poration, $2.50.  For  issuing  a  certified  copy  of  articles  of  incorporation  the 
charge  is  10  cents  per  hundred  words  for  copying  and  $1  for  certificate.  The 
recording  fee  in  local  county  office  is  8  cents  per  hundred  words  and  10  cents 
for  indexing. 

8.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon  the 
amount  of  debts  a  corporation  may  contract,  except  that  the  bonded  indebted- 
ness must  not  exceed  the  amount  of  authorized  capital  (sec.  2981).  By  a  major- 
ity vote  bondholders  may  be  authorized  to  convert  their  bonds  into  stock 
(sec.  3363). 

9.  Commencing  Business. — As  soon  as  the  certificate  of  organization 

398 


DIGEST    OF    INCORPORATION    ACTS.  —  MISSOURI. 

is  issued  by  the  Secretary  of  State  and  a  certified  copy  thereof  filed  in  the  office 
of  the  recorder  of  deeds,  the  company  may  at  once  commence  business.  As 
preliminary  to  the  foregoing,  however,  one-half  of  the  authorized  capital  stock 
of  the  corporation  must  be  paid  in  and  the  balance  subscribed  for  (sec.  3339). 

Shepard  v.  Drake,  61  Mo.  App.  134;  Reinhard  v.  Milling  Co.,  107  Mo.  616;  18  S.  IV.  17; 
St.  J.  &  I.  R.  R.  Co.  v.  Shambaugk,  100  Mo.  557;  17  S.  \V.  5S1 ;  Q.  C.  F.  &  C.  Co.  t>.  Crawford, 
127  Mo.  356;   30  ri.  \Y.  163. 

10.  Organization  Meetings.  —  Must  be  held  within  the  State  (sees. 
2964-2966). 

Camp  v.  Byrne  et  al,  41  Mo.  525;    N.  M.  R.  R.  Co.  v.  Winkler,  33  Mo.  354. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  within  the  State.  All  meetings  of  directors,  other  than  boards  of 
mining  and  railway  corporations,  must  be  held  at  the  general  office  of  the  cor- 
poration within  the  State  (sec.  2992). 

O  &  M.  R.  R.  Co.  v.  McPherson,  35  Mo.  13;  M.  L.  M.  &  S.  Co.  v.  Reinhard,  114  Mo.  218; 
21  S.  W.  4SS. 

12.  Directors'  Qualifications  and  Liabilities.  —  (a)  Qualifications.  — 
There  must  be  not  less  than  three  nor  more  than  thirteen  directors.  Three  of 
them  must  be  citizens  and  residents  of  the  State  and  each  must  be  a  shareholder. 
Directors  may  be  classified  if  desired.  Cumulative  voting  for  directors  per- 
mitted (sees.  2990,  2993,  3035,  3339,  3347).  Inspectors  of  election  are  provided 
for  (sees.  2967,  2968).  Directors  may  within  certain  prescribed  limits  make 
by-laws.     (See  sec.  2998.) 

Hap  v.  Mill  Co.,  39  Mo.  App.  453. 

(b)  Liabilities.  —  Directors  are  liable  for  knowingly  declaring  and  paying 
dividends  when  the  corporation  is  insolvent  or  which  will  render  it  insolvent. 
This  liability  is  a  joint  and  several  one,  and  extends  to  debts  of  the  corporation 
then  existing  or  thereafter  contracted.  Directors  voting  against  the  declara- 
tion of  such  dividends  are  not  liable  (sees.  3302,  3348).  They  are  also  liable  for 
making  loans  to  stockholders  (sec.  3350).  There  are  penal  provisions  against 
fraud  in  corporate  affairs  relating  to  the  fraudulent  issue  of  stock  or  bonds, 
failure  to  file  tax  returns,  for  making  loans  to  stockholders,  and  for  refusing  to 
permit  examination  of  books  (sees.  3348,  3350).  If  the  officers  and  directors  of 
any  corporation  shall  knowingly  purchase  for  the  corporation  of  which  they  arc 
officers  and  directors  any  property,  real  or  personal,  and  pay  therefor  more 
than  the  actual  value  thereof  they  shall  be  jointly  and  severally  liable  for  the 
debts  of  the  corporation  to  an  amount  equal  to  the  difference  between  the  pur- 
chase price  of  such  property  paid  and  the  actual  value  therefor;  provided,  that 
if  any  of  the  officers  or  directors  be  absent  at  the  time  of  making  such  purchase 
or  shall  object  thereto,  and  shall  file  their  objection  in  writing  with  the  clerk  or 
other  officer  of  the  corporation  having  charge  of  the  books,  they  shall  be  exempt 
from  the  said  liability  (Laws  of  1911,  p.  151). 

Every  person  who  shall  wilfully,  corruptly  and  falsely,  before  any  officer  of 
this  State,  having  a  seal,  under  oath  or  affirmation  voluntarily  make  any  false 
affidavit  or  statement  of  any  injury  concerning  any  corporation  or  any  proposed 
corporation,  shall  be  deemed  guilty  of  a  felony,  and  shall  upon  conviction  be 
punished  by  imprisonment  in  the  penitentiary  not  exceeding  five  years  or  by 
imprisonment  in  the  county  jail  not  exceeding  one  year  (Laws  of  191 1,  p.  151). 

399 


DIGEST    OF    INCORPORATION    ACTS.  —  MISSOURI. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  corporate 
debts  to  the  extent  of  their  unpaid  stock  subscriptions  (Cons.,  Art.  XII.  sec.  9 ; 
sees.  3004,  r  9-371). 

Ramsey  v.  Mfg.  Co.,  116  Mo.  313;   22  S.  W.  719;  Ollesheimer  v.  Mfg.  Co.,  44  Mo.  App.  172. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  have  a  certifi- 
cate issued  to  him,  signed  by  such  officers  as  the  by-laws  may  provide.  Par 
value  of  shares  may  be  any  amount. 

15.  Preferred  Stock.  —  Preferred  stock  may  be  issued  by  inserting  pro- 
vision therefor  in  the  original  articles  of  agreement  or  by  amendment  thereto, 
or  by  the  vote  of  all  the  stockholders  of  the  corporation.  Dividends  not  exceed- 
ing eight  per  cent  per  annum  may  be  made  on  the  preferred  stock  out  of  the 
net  yearly  income,  and  whether  such  dividends  shall  be  made  cumulative  or 
not,  and  what  priority,  if  any,  any  class  of  such  preferred  stock  shall  have  over 
the  common  stock  or  other  preferred  stock  out  of  the  assets  of  the  corporation 
in  case  of  its  dissolution  or  liquidation,  may  be  provided  for  (sees.  3358-3359). 

Winscott  v.  Investment  Co.,  63  Mo.  App.  367. 

16.  Payment  of  Capital  Stock.  —  Stock  can  only  be  issued  for  money 

paid,  labor  done,  or  property  actually  received.    All  fictitious  increase  of  stock  is 

void  (Cons.,  Art.  XII.  sec.  8 ;  see  also  sees.  2981,3350).  All  the  authorized  capital 

stock  must  be  subscribed  for  before  beginning  business,  and   one-half  paid   in 

(sees.  3354-3355,  3339;   Laws  of  1911.  p.  149). 

Schickle  v.  Watts,  94  Mo.  410;  7  S.  W.  274;  Grocer  Co.  v.  Crow,  36  Mo.  App.  288;  Gar- 
rett v.  Mining  Co.,  113  Mo.  330;  20  S.  W.  965;  MoDaniel  v.  Harvey,  51  Mo.  App.  198;  Berry 
v.  Rood,  168  Mo.  316;  67  S.  W.  644. 

17.  Books.  —  A  transfer  book  and  stock  register  shall  be  kept  at  the  gen- 
eral office  of  the  corporation,  which  shall  be  open  to  inspection  of  stockholders 
during  usual  business  hours  for  thirty  days  previous  to  an  election  of  directors 
(sec.  2985).  The  books  and  records  of  the  proceedings  of  such  corporation  shall 
be  kept  open  for  the  inspection  of  all  persons  interested  (sees.  3349-3353 ;  Cons., 
Art.  XII.  sec.  15). 

18.  Office.  —  Every  domestic  corporation  is  required  to  keep  an  office 

within  the  State  (sec.  3035).     The  secretary  of  the  corporation  must  have  his 

office  at  the  principal  corporate  office  within  the  State  (sec.  3035 ;  see  also  Cons., 

Art.  XII.  sec.  15). 

Cleaton  v.  Emery,  49  Mo.  App.  345;  M.  L.  M.  &  S.  Co.  v.  Reinhard,  114  Mo.  218;  21 
S.  W.  488. 

19.  Reports.  —  The  president,  secretary,  or  managing  officer  of  every  do- 
mestic corporation  must,  within  thirty  days  after  the  1st  day  of  July  of  each 
year,  make  what  is  known  as  the  anti-trust  affidavit  in  the  form  prescribed  by 
statute  (Laws  of  1907,  pp.  374-377).  Corporations  shall  annually,  on  or  before 
July  1st,  report  to  the  Secretary  of  State  the  location  of  the  principal  office, 
name  of  president  and  secretary,  amount  of  capital  stock  both  subscribed  and 
paid  up,  par  value  of  stock  and  actual  value  of  stock  at  the  time,  cash  value 
of  all  personal  property  and  real  estate  within  this  State,  on  June  1st  preceding, 
and  amount  of  taxes  paid  by  the  corporation  in  this  State  for  the  year  last  pre- 
ceding the  report  (sec.  3026;  see  also  Laws  of  1905,  p.  71).  The  president  or 
other  chief  officer  of  all  corporations  must  deliver  to  the  assessor  a  list  of  the 
names  of  the  persons  holding  stock  therein,  the  number  of  shares  and  the  face 
value  thereof ;  also  a  complete  statement  of  all  reserve  funds,  undivided  profits, 
premiums  on  earnings,  and  of  all  other  values  belonging  to  the  corporation  (sec- 
11357). 

400 


DIGEST    OF    INCORPORATION    ACTS.  —  MISSOURI. 

20.  Anti-Trust  Statute.  —  All  combinations  to  limit  prices  of  certain 
designated  articles  are  by  statute  declared  to  be  illegal  (Laws  of  1901,  chap.  143 ; 
Laws  of  1907,  pp.  234,  235).  Anti-trust  affidavit  is  required  to  be  made  out 
and  sworn  to  by  the  president,  secretary,  or  treasurer  of  each  corporation 
bn  or  before  July  1st  of  each  year  (sec.  10306;  Laws  of  1907,  pp.  234,  235, 
374-382). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  — The  charter  may 
be  forfeited  for  entering  illegal  trusts  or  combinations  ;  also  for  failure  to  main- 
tain an  office  within  the  State,  and  have  at  least  three  directors  residents  of 
the  State  for  six  months  consecutively;  also  for  abuse,  non-use,  or  misuse  of 
corporate  rights  and  privileges  (sees.  3035,  3036,  10304),  and  for  violation  of 
Anti-Trust  Acts  (Laws  of  1907,  pp.  234.  235,  374-3S4). 

22.  Extension  of  Corporate  Existence.  —  Corporate  existence  may  be 
extended  for  a  further  period  of  fifty  years  by  complying  with  the  law  in  respect 
thereto  (sec.  2991).  Corporations  may  also  reincorporate  under  the  old  name, 
if  they  so  desire  (sec.  3021). 

23.  Annual  Franchise  Tax.  — There  is  no  annual  franchise  tax. 

24.  Amendments.  — To  increase  the  capital  stock  requires  the  consent  of 
all  persons  holding  the  larger  amount  in  value  of  the  stock,  such  consent  to 
be  obtained  at  a  meeting  of  the  stockholders  called  for  that  purpose.  Sixty 
days'  notice  of  the  time  and  place  of  such  meeting  to  be  given  by  publication 
at  least  once  a  week  in  some  newspaper  published  in  the  county  wherein  the 
principal  office  of  the  corporation  is  located,  the  first  insertion  to  be  not  less 
than  sixty  days,  the  last  to  be  not  less  than  one  nor  more  than  six  days  pre- 
vious to  the  date  on  which  said  meeting  shall  be  held.  The  notice  must  also 
state  the  amount  of  the  proposed  increase  of  stock.  LTpon  the  stock  of  any  cor- 
poration being  increased,  the  change  and  amount  of  such  increase  of  stock  shall 
be  certified  by  the  proper  corporate  officers  to  the  Secretary  of  State,  who  shall 
record  the  same.  In  increasing  stock  the  same  proceedings  shall  be  had  so  far 
as  practicable  as  in  the  original  proceeding  for  incorporation  (sees.  2981-2983; 
Laws  of  1911,  p.  150). 

To  change  the  name  or  number  of  directors  requires  action  by  a  majority 
of  the  stockholders  taken  at  a  meeting  called  for  that  purpose.  The  action 
so  taken  must  be  set  forth  in  an  affidavit  of  the  president  and  secretary  of  the 
corporation,  setting  forth  the  name  adopted  or  the  number  of  directors  fixed, 
together  with  the  date  on  which  said  change  of  name  or  number  of  directors 
was  voted  by  the  stockholders  of  the  corporation.  This  affidavit  must  be  first 
recorded  in  the  office  of  the  recorder  of  deeds  of  the  county  in  which  the  cor- 
poration is  located  and  then  afterwards  filed  with  the  Secretary  of  State  (sec. 
Laws  of  1903,  p.  114). 

Corporations  may,  at  a  stockholders'  meeting  called  and  held  in  the  same 
manner  provided  for  in  the  increase  of  capital  stock,  reduce  the  par  value  of 
its  shares  of  stock  and  correspondingly  increase  the  number  thereof  by  vote 
of  a  majority  of  the  stock  of  the  corporation.  The  same  certificate  of  such 
change  must  be  made  out,  recorded,  and  filed  as  is  provided  in  the  case  of 
change  of  name  or  change  in  the  number  of  directors  (sec.  2990;  Laws  of  1903, 
p.  L14). 

The  Manufacturing  and  Business  Company  Act  contains  a  provision  for 
changing  the  corporate  business  in  the  following  manner,  to  wit:  A  meeting 
of  the  stockholders  must  be  called  by  the  directors  upon  notice  signed  by  at 
least  a  majority  of  the  directors  and  published  in  a  newspaper  in  the  county 

26  401 


DIGEST    OF    INCORPORATION    ACTS.  —  MISSOURI. 

where  the  principal  place  of  business  of  the  corporation  is  located  for  a  period 
of  sixty  days.  This  notice  must  also  be  sent  to  each  stockholder  by  post  at 
his  usual  place  of  residence  at  least  sixty  days  previous  to  the  date  fixed  upon 
for  holding  such  meeting  and  specifying  the  object  of  the  meeting,  the  time  and 
place  when  and  where  such  meeting  is  to  be  held,  and  the  amount  to  which 
the  stock  is  to  be  increased  or  diminished  or  the  business  changed.  An  affirma- 
tive vote  of  all  persons  holding  the  larger  amount  in  value  of  all  the  shares 
of  stock  is  necessary  to  effect  the  amendment.  The  published  notice  provided 
for  requires  that  it  shall  be  published  at  least  once  a  week  and  the  first 
publication  must  be  at  least  sixty  days  before  the  date  of  said  meeting.  A 
statement  of  the  proceedings  at  the  stockholders'  meeting  must  be  prepared, 
showing  compliance  with  the  law,  the  amount  of  capital  actually  paid  in,  the 
business  to  which  it  is  extended  or  changed,  the  whole  amount  of  assets  and 
liabilities  of  the  corporation,  and  the  amount  to  which  the  capital  stock  shall 
be  increased  or  diminished.  This  statement  must  be  acknowledged  by  the 
chairman  and  recorded  in  the  same  manner  as  is  provided  in  the  case  of  original 
charters  (sec.  3356). 

Ollesheimer  v.  Mfg.  Co.,  44  Mo.  Ap.  122;  N.  S.  H.  Co.  v.  Cook,  178  Mo.  189;  77  S.  W. 
559. 

25.  Dissolution.  —  A  corporation  may  be  dissolved  only  on  application  to 
the  courts  for  cause  shown  by  a  majority  vote  of  the  stockholders  or  without 
cause  shown  by  a  two-thirds  vote  thereof  (sec.  3000).  The  affidavit  of  disso- 
lution must  be  filed  with  the  Secretary  of  State  (sec.  3031). 

26.  Foreign  Corporations.  —  Foreign  corporations,  in  order  to  transact 
business  within  the  State,  must  file  in  the  office  of  the  Secretary  of  State  a 
copy  of  their  charter,  duly  authenticated  by  the  proper  authority,  together 
with  a  sworn  statement  under  the  corporate  seal  setting  forth  the  business  of 
the  corporation  which  it  is  engaged  in  carrying  on  or  which  it  proposes  to  carry 
on  in  the  State ;  and  the  principal  officer  or  agent  in  Missouri  must  make  and 
forward  to  the  Secretary  of  State,  with  the  affidavits  required,  a  statement, 
sworn  to,  of  the  proportion  of  capital  stock  which  is  represented  by  its  prop- 
erty located  and  business  transacted  in  Missouri,  and  setting  forth  the  location 
of  its  principal  office  within  the  State  where  legal  service  may  be  obtained  upon 
it.  The  corporation  is  required  to  pay  into  the  State  treasury,  upon  the  pro- 
portion of  its  capital  stock  represented  by  its  property  and  business  in  Missouri, 
incorporating  taxes  and  fees  equal  to  those  required  of  similar  domestic  cor- 
porations, with  an  addition  of  $10  as  the  license  fee.  For  a  corporation  employ- 
ing $50,000  capital  in  Missouri,  it  would  have  to  pay  first  a  tax  of  $50  thereon ; 
this  in  addition  to  $10  for  license  and  $1.50  for  certificate.  The  tax  on  all 
additional  capital  employed  in  Missouri  would  be  $5  on  each  additional  $10,000 
or  fractional  part  thereof.  The  Secretary  of  State  is  not  permitted  to  issue  a 
license  to  any  foreign  corporation  bearing  the  same  name  as  that  of  a  domestic 
corporation  (R.  S.  sec.  3039). 

In  addition  to  the  foregoing,  every  foreign  corporation  must  maintain  a 
place  of  business  within  the  State  where  service  of  process  may  be  made  and 
where  books  shall  be  kept  showing  all  of  the  corporate  assets  and  liabilities  as 
well  as  the  names  and  residences  of  the  shareholders  and  the  officers  and  man- 
agers of  the  corporation  (Laws  of  1903,  pp.  119-121).  A  license  will  not  be 
issued  to  any  foreign  corporation  that  could  not  be  organized  under  the  Laws 
of  Missouri  (sec.  3343),  nor  to  any  foreign  corporation  organized  by  residents 
of  Missouri  to  evade  the  Laws  of  Missouri  (Laws  of  1903,  p.  121).     Foreign 

402 


DIGEST    OF   INCORPORATION   ACTS. — MISSOURI. 

corporations  must  annually  file  a  report  on  July  1st  of  each  year  in  the  office 
of  the  Secretary  of  State,  giving  (1)  the  location  of  office;  (2)  name  of  prin- 
cipal officer  in  State;  (3)  cash  value  of  real  and  personal  property  in  State 
on  June  1st;  (4)  amount  of  taxes  paid  in  preceding  year  (sec.  3027).  Also 
an  affidavit  must  be  filed  on  or  before  July  1st  in  each  year  in  response  to  a 
letter  of  inquiry  from  the  Secretary  of  State,  and  on  forms  supplied  by  him, 
in  regard  to  trusts  and  conspiracies,  on  penalty  of  forfeiture  of  right  to  do  busi- 
ness in  the  State  (Laws  of  1907,  pp.  374-377). 

The  proportion  of  capital  of  foreign  corporations  employed  within  the  State 
of  Missouri  cannot  exceed  $50,000,000  (Laws  of  1907,  p.  16S). 

Carson-Rand  Co.  v.  Stern,  129  Mo.  381;  31  S.  W.  772;  Tooney  v.  S.  L.  K.  P.,  74  Mo. 
App.  129;  Woollen  Mills  Co.  v.  Edwards,  84  Mo.  App.  448;  Kimball  v.  Davis,  52  Mo.  194;  Hay* 
v.  Merkle,  70  Mo.  509;    State  ex  rel.  v.  Cook,  181  Mo.  596;   80  S.  W.  929. 


403 


DIGEST    OF    INCORPORATION    ACTS. MONTANA. 


MONTANA. 

(The  references  cited  below  are  to  the  Revised  Codes  of  1907,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  Montana  is  found  in  sees.  3805-3908,  4403- 
4412  of  the  Revised  Codes  of  1907  of  Montana  and  acts  amendatory  thereof. 
Special  acts  are  provided  for  banking,  trust,  mutual  insurance,  building  and 
loan,  railway,  telegraph,  and  telephone  companies  (sees.  3909-3991).  Corpora- 
tions may  be  formed  under  the  General  Act  for  practically  any  kind  of  business 
(sec.  3808;  Laws  of  1909,  chap.  106). 

2.  Incorporators.  —  There  must  be  at  least  three  incorporators.  There 
are  no  residential  requirements,  except  that  it  is  customary  to  have  at  least  one 
resident  incorporator  (sec.  3807). 

3.  Contents  of  the  Articles  of  Incorporation  (sec.  3817).  —  The  articles 
must  contain: 

a.  Name.  —  Similarity  of  names  is  expressly  forbidden  (sec.  3S25). 

b.  Purposes.  —  The  General  Act,  after  enumerating  the  various  purposes 
for  which  corporations  may  be  formed,  provides  specifically  that  corporations 
may  be  created  to  carry  on  one  or  more  of  the  aforesaid  branches  of  business 
or  for  any  of  the  purposes  for  which  private  corporations  may  be  formed,  as 
set  forth  in  sec.  3808  of  the  Revised  Code  of  1907  of  Montana  and  Laws  of  1909, 
chap.  106.  As  a  matter  of  practice  the  Secretary  of  State  permits  the  insertion 
in  the  articles  of  incorporation  of  any  number  of  purposes  not  covered  by  special 
act. 

c.  Domiciliary  Office.  —  The  place  where  the  principal  business  is  to  be 
transacted  must  appear  (sec.  3817). 

d.  Duration.  —  Term  for  which  the  corporation  is  to  exist  not  to  exceed 
twenty  years.  In  case  of  mining,  manufacturing,  mechanical,  etc.,  corpora- 
tions, forty  years  (sec.  3817). 

e.  Board  of  Directors.  —  The  number,  which  shall  not  be  less  than  three 
nor  more  than  thirteen,  and  the  names  and  residences  of  those  who  are  to 
serve  for  the  first,  three  months  (sec.  3817). 

/.  Capital  Stock.  —  The  amount  of  its  capital  stock  and  the  number  of  shares 
into  which  it  is  divided,  and  if  there  be  more  than  one  class  of  stock  created  by 
the  articles  of  incorporation,  a  description  of  the  several  classes,  with  the  terms 
on  which  the  respective  classes  are  created.  The  capital  stock  and  par  value 
of  shares  may  be  any  amount  (sec.  3817). 

g.  Stock  Subscriptions.  —  Amount  actually  subscribed,  and  by  whom  (sec. 
3817). 

h.  Stock  Assessments. —  If  stock  is  assessable,  it  must  be  so  stated  (sec.  31S8). 

4.  Statutory  Powers.  —  The  Montana  statutes  enumerate  the  common 
law  powers  of  corporations,  and  also  confer  the  following  additional  powers : 
To  remove  directors ;  permitting  stockholders  to  vote  by  proxy ;  permitting 
mining  companies  to  consolidate ;  authorizing  forfeiture  of  stock  for  non- 
payment of  assessments ;  permitting  the  imposition  of  fines,  not  to  exceed 
$100,  for  violation  of  by-laws;  allowing  cumulative  voting  for  directors;  to 
hold  stock  and  bonds  in  other  corporations  (sees.  3889-3891,  3893,  3895,  3896, 
4405^407,  4408^412,  3835,  3897,  3841,  3847 ;    Laws  of  1909,  chap.  106,  sec. 

404 


DIGEST    OF    INCORPORATION    ACTS.  —  MONTANA. 

4;   Cons.,  Art.  XV.  sec.  4).    ( 'orporations  are  given  power  to  dispose  of  and  sell 
their  property  either  in  whole  or  in  part  under  certain  restrictions  as  therein 
provided.     Provision  is  made  for  the  protection  of  dissenting  stockholders. 
Macginness  v.  Company,  29  Mont.  478;   75  Pac.  89. 

5.  Procuring  the  Charter. — The  articles  must  be  signed  and  acknowl- 
edged by  each  of  the  incorporators.  They  must  then  be  filed  in  the  office  of 
the  county  clerk  of  the  county  in  which  the  principal  place  of  business  is  to  be 
located,  and  a  copy  thereof  certified  by  the  county  clerk  with  the  Secretary  of 
State.  Thereupon  the  latter  official  issues  a  certificate  that  a  copy  of  the  arti- 
cles containing  the  required  statement  of  facts  has  been  filed  in  his  office.  There- 
upon the  corporate  existence  commences  (sees.  3820,  3823,  3825;  Laws  of  1909, 
chap.  94 ;  Laws  of  1909,  chap.  106,  sec.  2).  Collateral  inquiry  as  to  the  legality 
of  corporate  existence  is  forbidden  (sec.  3S92). 

No  corporation  hereafter  formed  shall  purchase,  locate  or  hold  property  in 
any  county  in  this  State,  without  filing  a  copy  of  the  copy  of  its  articles  of  in- 
corporation filed  in  the  office  of  the  Secretary  of  State,  in  the  office  of  the  county 
clerk  of  the  county  in  which  such  property  is  situated,  within  sixty  days  after 
the  purchase  or  location  is  made.  Every  corporation  now  in  existence,  whether 
formed  under  the  provisions  of  this  code  or  not,  must,  within  ninety  days  after 
the  passage  of  this  code,  file  such  certified  copy  of  the  copy  of  its  articles  of  in- 
corporation in  the  office  of  the  county  clerk  of  every  county  in  this  State  in 
v/hich  it  holds  any  property,  except  the  county  where  the  original  articles  of 
incorporation  are  filed:  and  if  any  corporation  hereafter  acquire  any  property 
in  a  county  other  than  that  in  which  it  now  holds  property,  it  must,  within 
ninety  days  thereafter,  file  with  the  clerk  of  such  county  such  certified  copy  of 
the  copy  of  its  articles  of  incorporation.  The  copies  so  filed  with  the  several 
county  clerks  and  certified  copies  thereof  shall  have  the  same  force  and  effect 
in  evidence  as  would  the  originals.  Any  corporation  failing  to  comply  with 
the  provisions  of  this  section  shall  not  maintain  or  defend  any  action  or  pro- 
ceedings in  relation  to  such  property,  its  rents,  issues  or  profits,  until  such  articles 
of  incorporation  and  such  certified  copy  of  its  articles  of  incorporation  shall  be 
filed  at  the  places  directed  by  the  general  law  and  this  section:  provided,  that 
all  corporations  shall  be  liable  in  damages  for  any  and  all  loss  that  may  arise 
by  the  failure  of  such  corporation  to  perform  any  of  the  foregoing  duties  within 
the  time  mentioned  in  this  section ;  and  provided,  further,  thai  the  said  damages 
may  be  recovered  in  an  action  brought  in  any  court  of  this  State  of  competent 
jurisdiction,  by  any  party  or  parties  suffering  the  same  (Code,  sec.  .3823). 

6.  Organization  Tax.  —  For  recording  and  filing  each  certificate  of  incor- 
poration and  each  certificate  of  increase  of  capital  stock,  there  must  be  paid  to 
the  Secretary  of  State  an  organization  tax  in  the  following  amounts:  On  all 
capitalization  up  to  $100,000,  50  cents  per  thousand  dollars,  but  in  no  case 
less  than  $20;  additional  from  $100,000  to  $250,000,  40  cents  per  thousand 
dollars ;  additional  from  $250,000  to  $500,000,  30  cents  per  thousand  dollars ; 
additional  from  $500,000  to  $1,000,000,  20  cents  per  thousand  dollars;  addi- 
tional over  $1,000,000,  10  cents  per  thousand  dollars  (Political  Code,  see. 
410). 

For  recording  and  filing  the  certificate  of  continuance  of  corporate  exist- 
ence the  following  amounts  are  charged:  On  amount  of  capitalization  up  to 
$100,000,  25  cents  per  thousand  dollars;  additional  from  $100,000  to  $250,000, 
20  cents  per  thousand  dollars;    additional  from  $250,000  to  $500,000,  15  cents 

405 


DIGEST    OF   INCORPORATION   ACTS.  —  MONTANA. 

per  thousand  dollars;    additional  over  $500,000  to  $1,000,000,   10  cents  per 
thousand  dollars;    additional  over  $1,000,000,  5  cents  per  thousand  dollars. 

7.  Filing  and  Recording  Fees.  —  The  recording  and  filing  fees  to  the  Sec- 
retary of  State  are  included  in  the  organization  tax.  For  issuing  certificate  of 
incorporation,  the  charge  is  $3 ;  for  certified  copy  of  the  articles  of  incorpora- 
tion, 20  cents  per  folio  for  making  copy  and  for  affixing  seal,  $1.  For  issu- 
ing each  certificate  of  decrease  of  capital  stock,  $3;  for  recording  and  filing 
each  certificate  of  decrease  of  capital  stock,  $5 ;  for  issuing  certificate  of  con- 
tinuance of  corporate  existence,  $3 ;  for  recording  and  fifing  each  notice  of 
removal  of  place  of  business,  each  certificate  of  change  of  name,  or  each  cer- 
tificate making  capital  stock  assessable,  $3.  Recording  fees  in  local  county 
office,  15  cents  per  hundred  words ;  for  acknowledgment,  50  cents,  and  10  cents 
for  indexing.  Usually  $3  covers  this  entire  service  (Political  Code,  sec. 
165). 

8.  Corporate  Indebtedness.  —  Must  never  exceed  the  amount  of  capital 
stock  (sec.  3894). 

9.  Commencing  Business.  —  As  soon  as  the  certificate  of  incorporation 
has  been  recorded  in  the  office  of  the  county  clerk  and  a  copy  thereof  duly 
certified  with  the  Secretary  of  State,  and  the  latter  has  issued  a  certificate 
that  a  copy  of  the  articles,  properly  drawn,  has  been  filed  in  his  office,  the 
corporation  may  commence  business  (Laws  of  1909,  chap.  106,  sec.  2).  By-laws 
must  be  adopted  within  one  month  after  filing  articles  (sec.  3S29).  No  corpora- 
tion can  purchase,  locate,  or  hold  property  in  any  county  in  the  State,  without 
filing  a  certified  copy  of  its  articles  of  incorporation  in  the  office  of  the  county 
clerk  of  the  county  in  which  such  property  is  situated,  within  sixty  days  after 
such  purchase  or  location  is  made  (sec.  3823).  The  corporation  must  or- 
ganize and  commence  business  within  one  year  after  date  of  incorporation 
(sec.  3892). 

Morrison  v.  Clarke,  24  Mont.  515;  63  Pac.  98. 

10.  Organization  Meetings.  —  These  must  be  held  within  the  State,  in 
the  absence  of  any  statute  providing  otherwise. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  at  the  office  or  principal  place  of  business  of  the  corporation 
within  the  State.  Directors'  meeting  may  be  held  within  or  without  the  State 
if  the  by-laws  so  provide.  If  held  without  the  State,  either  the  original  or  a 
copy  of  all  proceedings  had  at  such  meeting,  certified  by  the  president  and  secre- 
tary under  the  corporate  seal,  shall  be  sent  to  and  kept  at  the  principal  office  of 
the  corporation  in  Montana,  and  shall  be  part  of  the  records  thereat  (sec.  3847). 

McConnell  v.  Company  (Mont.),  76  Pac.  194. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  not  less  than  three  nor  more  than  thirteen  directors,  who  must 
likewise  be  stockholders  to  the  amount  prescribed  in  the  by-laws.  The  only 
exception  is  that  the  directors  authorized  by  the  articles  of  incorporation  to 
act  as  such  for  the  first  three  months  need  not  be  stockholders  (sec.  3833). 

b.  Liabilities.  —  Directors  r.re  jointly  and  severally  liable  to  the  corporation 
and  the  creditors  in  the  event  of  its  dissolution,  to  the  full  amount  of  capital 
stock  illegally  withdrawn,  paid  out  or  reduced,  and  for  debts  contracted  beyond 
the  subscribed  capital  stock.  Dissenting  directors  may  protect  themselves 
by  causing  their  dissent  to  be  entered  at  large  in  the  minutes  of  the  directors' 
meetings  (sec.  3837).  Directors  are  also  liable  for  failure  to  file  annual  reports 
406 


DIGEST    OF    INCORPORATION    ACTS. — MONTANA. 

unless  they  make  an  affidavit  in  the  form  required  by  statute,  explaining  the 
reason  for  their  neglect  (sec.  3S50  as  amended  by  Act  of  March  11,  1909). 

The  Revised  Code  (sec.  3S52)  contains  somewhat  unique  provision  for  reliev- 
ing directors  of  personal  liability.  The  act  referred  to  provides  that  any  director, 
trustee,  or  other  officer  of  a  corporation  may  resign  his  office  by  delivering  to  the 
secretary  or  president  of  the  corporation,  or  depositing  in  the  post-office  in  an 
envelope  securely  sealed  with  the  necessary  amount  of  postage  prepaid  thereon 
and  addressed  to  the  corporation  at  its  principal  place  of  business,  his  written 
resignation,  and  filing  in  the  office  of  the  clerk  and  recorder  of  the  county  where 
the  principal  office  or  place  of  business  of  the  said  corporation  is  situated  a 
duplicate  of  such  resignation,  together  with  an  affidavit  of  the  delivery  or  mail- 
ing of  said  resignation  as  above  specified,  or  an  acknowledgment  of  service 
thereof,  and  by  publishing  in  two  consecutive  issues  of  the  official  newspaper  of 
the  county  where  said  company  may  be  doing  business,  a  notice  of  such  resigna- 
tion, and  the  director,  trustee,  or  other  officer  shall  upon  such  filing  and  publica- 
tion no  longer  be  responsible  for  any  act  or  default  of  the  corporation  or  of  the 
other  officers  thereof  occurring  after  the  date  of  such  filing,  provided,  however, 
that  any  director,  trustee,  or  other  officer  shall  also  comply  with  the  laws  of  the 
corporation  relating  to  resignations  of  directors  or  officers.  This  act  shall  apply 
to  resident  directors  of  foreign  corporations  having  a  place  or  places  of  business 
in  this  State,  as  well  as  to  directors  and  other  officers  of  domestic  corporations 
(sec.  3852;  see  also  Civ.  Code,  3834,  3S59;  P.  C,  sec.  8709,  8730  inclusive; 
Laws  of  1909,  chap.  96). 

Gans  v.  Switzer,  9  Mont.  408;  24  Pac.  18;  State  Sav.  Bank  v.  Johnson,  18  Mont.  440; 
45  Pac.  662. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable,  to  the  extent  of 
their  unpaid  stock  subscriptions,  for  all  acts  and  contracts  made  by  such  cor- 
poration until  the  whole  amount  of  capital  stock  subscribed  by  them  shall 
have  been  paid  in  (sec.  3853). 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate  of 
stock  signed  by  the  president  and  secretary  (sec.  3855).  Par  value  of  shares 
may  be  any  amount. 

15.  Preferred  Stock.  —  Corporations  may  create  two  or  more  kinds  of 
stock  of  such  classes  and  with  such  distinct  preferences  and  voting  powers  as 
shall  be  expressed  in  the  articles  of  incorporation.  The  amount  of  preferred 
stock  cannot  exceed  two-thirds  of  the  capital  stock  paid  in  in  cash  or  property. 
Preferred  stock  may  be  made  subject  to  redemption  at  not  less  than  par  at 
a  fixed  time  and  price  to  be  named  in  the  stock  certificate  thereof,  and  the 
holders  thereof  shall  be  entitled  to  receive,  and  the  corporation  shall  be  bound 
to  pay  thereon,  a  fixed  yearly  dividend  to  be  expressed  in  the  certificate,  not 
exceeding  eight  per  cent,  payable  quarterly,  semi-annually,  or  annually,  before 
any  dividend  shall  be  declared  by  said  board  or  paid  on  the  common  stock,  and 
such  dividend  may  be  made  cumulative.  Unless  the  original  or  amended 
articles  shall  so  provide,  no  corporation  may  create  preferred  stock  (sec.  3SS9). 

16.  Payment  of  Capital  Stock.  —  Corporations  can  issue  stock  or  bonds 
only  for  labor  done,  services  performed,  money  or  property  actually  received. 
All  fictitious  increase  of  stock  is  void  (sec.  3824,  Cons.,  Art.  XV.  sec.  10).  Tin- 
Code  provides  that  the  directors  may  purchase  mines,  manufactories,  and 
other  property  necessary  for  its  business,  and  issue  stock  in  the  amount  of  I  lie 
value  thereof  in  payment  thereof,  and  the  stock  so  issued  shall  be  declared  and 

407 


DIGEST    OF    INCORPORATION    ACTS.  —  MONTANA 

deemed  to  be  full-paid  stock  and  not  liable  to  any  further  call.  Neither  shall 
the  holders  thereof  be  liable  for  unpaid  stock  subscriptions  as  provided  in  sec. 
3S53  of  the  Code.  The  law  provides  that  any  arbitrary  value  may  be  fixed  on 
for  mines,  irrespective  of  actual  value.  Wherever  stock  has  been  issued  there- 
for, such  stock  shall  be  deemed  full-paid  stock,  regardless  of  the  actual  value 
of  the  mine  at  the  time  of  such  purchase  (sec.  3824). 

17.  Books.  —  Books  of  by-laws,  stock  register,  transfer  book,  and  record 
books  of  corporation  must  be  kept  at  principal  office  within  the  State.  Stock- 
holders have  the  right  of  inspection  at  any  time  during  business  hours  (sec. 
3832). 

18.  Office.  —  Every  domestic  corporation  is  required  to  keep  an  office 
witliin  the  State.  The  statute  provides  that  the  principal  place  of  business 
within  the  State  must  be  named  in  the  articles  of  incorporation  (sees.  3847, 
3849). 

19.  Reports.  —  All  corporations  must,  within  twenty  days  from  the  31st 
day  of  December  of  each  year,  file  in  the  office  of  the  clerk  of  the  county  in 
which  their  principal  place  of  business  is  situated,  a  report,  stating  the  amount 
of  the  capital  stock,  the  proportion  thereof  actually  paid  in,  and  the  amount 
thereof  actually  paid  in  in  cash  and  the  amount  issued  in  payment  of  properties 
purchased  and  the  amount  of  existing  debts,  and  also  the  names  and  addresses 
of  the  directors  or  trustees,  and  of  the  president,  vice-president,  general  manager, 
and  secretary  of  the  corporation.  Such  report  shall  be  signed  by  the  president 
and  a  majority  of  the  directors,  inclusive  of  the  president,  secretary,  or  treasurer 
of  such  corporation.  In  the  absence  or  inability  of  the  president  to  act,  the 
vice-president  may  sign  and  verify  the  said  report  (sec.  3850  as  amended  by 
Act  of  March  11,  1909). 

20.  Anti-Trust  Statute.  —  Certain  kinds  of  trusts  and  combinations  are 
declared  illegal  by  statute.  (See  Cons.,  Art.  XV.  sec.  20 ;  Penal  Code,  chap.  8, 
sees.  321,  325;   Laws  of  1909,  chap.  97,  106,  sec.  4.) 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  upon  direct  proceedings  taken  by  the  State  for  misuser  or  non- 
user  thereof.  Also  for  failure  to  organize  and  commence  business  within  one 
year  from  date  of  incorporation  (Code  Civ.  Pro.,  sec.  1411;  sec.  3892). 

22.  Extension  of  Corporate  Existence.  —  The  corporate  existence  may 
be  extended  by  compliance  with  the  statute  in  such  case  made  and  provided 
(sees.  3815,  3826). 

23.  Annual  Franchise  Tax.  —  There  is  no  annual  franchise  tax. 

24.  Amendments.  —  To  increase  or  decrease  capital  stock,  extend  or 
change  the  business,  it  is  the  duty  of  the  trustees  to  publish  a  notice  signed 
by  at  least  a  majority  of  them  in  a  newspaper  published  in  the  county  where 
the  corporation's  principal  place  of  business  is  located,  for  lA,  least  six  succes- 
sive weeks,  and  deposit  a  copy  thereof  in  the  post-office,  addressed  to  each 
stockholder,  at  his  usual  place  of  residence,  at  least  six  weeks  previous  to  the 
date  fixed  for  holding  such  meeting,  specifying  the  object  of  the  meeting,  the 
time  and  place  when  and  where  such  meeting  shall  be  held,  and  the  amount 
to  which  it  is  proposed  to  increase  or  decrease  the  capital,  and  the  business  to 
which  the  company  would  be  extended.  At  the  meeting  so  called,  the  vote  of 
at  least  two-thirds  of  all  the  shares  of  stock  must  be  cast  in  favor  of  the  pro- 
posed amendment.  A  certificate  of  the  proceedings  showing  compliance  with 
the  provisions  of  law,  the  amount  of  capital  paid  in,  the  business  to  which  it  is 
extended  or  changed,  the  whole  amount  of  debts  and  liabilities  of  the  company, 

408 


DIGEST    OF    INCORPORATION    ACTS.  —  MONTANA. 

and  the  amount  to  which  the  capital  stock  shall  be  increased  or  diminished, 
must  be  made  out,  signed,  and  verified  by  t he  affidavit  of  the  chairman  and 
countersigned  by  the  secretary,  and  such  certificate  shall  be  acknowledged  by 
the  chairman  and  filed  and  recorded  in  the  same  manner  as  is  required  in  the 
case  of  original  charters  (sees.  3826-3828  inclusive,  sec.  3). 

To  change  the  location  of  the  principal  place  of  business,  or  to  increase  or 
diminish  the  number  of  trustees,  it  is  necessary  to  obtain  the  consent  in  writ- 
ing of  the  holders  of  two-thirds  of  the  capital  stock.  After  such  consent  is 
obtained  and  filed  in  the  office  of  the  corporation,  notice  of  the  intended  change 
of  location  or  of  the  intended  increase  or  diminishment  of  the  number  of  trustees 
must  be  published  at  least  once  a  week  for  three  successive  weeks  in  a  news- 
paper published  in  the  county  wherein  such  principal  place  of  business  is  located 
(sec.  3849) . 

Porter  v.  Company,  29  Mont.  347;   74  Pac.  938. 

25.  Dissolution.  —  Dissolution  may  be  had  only  by  application  to  the 
courts  (Code  Civ.  Pro.,  sees.  6944,  6946,  6961,  6962,  7323-7329 ;  see  also  Code, 
sees.  3905,  3906). 

Gans  v.  Switzer,  9  Mont.  408;  24  Pac.  18. 

26.  Foreign  Corporations.  —  Foreign  corporations  desiring  to  do  business 
in  Montana  must  file  in  the  office  of  the  Secretary  of  State  and  in  the  office  of  the 
county  recorder  of  the  county  wherein  they  propose  to  carry  on  their  business, 
a  duly  authenticated  copy  of  their  charter  or  certificate  of  incorporation,  and  a 
verified  statement  made  by  the  president  and  secretary  and  attested  by  a 
majority  of  the  board  of  directors,  showing  name  of  corporation  and  location  of 
its  principal  place  of  business  witliin  and  without  the  State ;  amount  of  capital 
stock;  amount  of  capital  stock  paid  in  in  money,  or  in  any  other  way ;  amount 
of  assets  of  the  corporation,  of  what  they  consist  and  actual  value  thereof; 
statement  of  the  liabilities  of  the  corporation  secured  and  unsecured.  Such 
corporation  shall  also  file  at  the  same  time  and  in  the  same  offices  a  certificate 
under  the  seal  of  the  corporation  and  the  signature  of  its  president  or  vice- 
president  or  other  acting  head,  and  its  secretary,  certifying  that  said  corpora- 
tion has  consented  to  be  sued  in  the  courts  of  the  State  and  that  service  of  process 
may  be  made  upon  some  person  a  citizen  of  the  State  whose  name  and  place  of 
residence  shall  be  designated  in  such  certificate  (sec.  4413).  In  case  of  amend- 
ments to  its  charter  in  any  respect  it  must,  within  thirty  days  after  the  same  is 
adopted  by  the  corporation,  file  a  duly  authenticated  copy  of  such  amendment 
in  the  office  of  the  Secretary  of  State  and  in  the  office  of  the  county  clerk  of 
the  county  where  it  intends  to  carry  on  business.  In  case  the  corporation  in- 
creases its  capital  stock  or  extends  its  corporate  existence,  it  must  then  pay 
to  the  Secretary  of  State  at  the  time  of  fifing  in  his  office  a  duly  authenticated 
copy  of  the  certificate  thereof.  The  same  fee  is  required  that  is  required  by 
law  from  domestic  corporations  for  filing  certificates  of  increase  of  capital 
stock  or  certificates  of  extension  of  corporate  business  (sec.  4413).  Must  also 
file  annual  reports  (sec.  3850  as  amended  by  Act  of  March  11,  1909).  For 
filing  each  certified  copy  of  charter  of  any  foreign  corporation,  the  same  fees 
shall  be  charged  by  the  Secretary  of  State  as  is  provided  for  in  the  case  of 
domestic  corporations.  The  Secretary  of  State  is  also  entitled  to  collect  the 
following  fees  from  foreign  corporations :  For  filing  each  notice  of  appointment 
of  agent,  $5;  for  filing  annual  statements  of  foreign  corporations,  $5.  (As  to 
when  foreign  corporations  may  exercise  the  right  of  eminent  domain,  see  sec. 

400 


DIGEST    OF   INCORPORATION   ACTS. — MONTANA. 

4420.)  Under  Laws  of  1909,  House  Bill  No.  291,  approved  March  8,  1909,  all 
foreign  corporations  or  joint  stock  companies  and  corporations  otherwise  pro- 
vided for,  organized  under  the  laws  of  any  other  State  or  Territory  of  the  United 
States,  or  of  the  United  States,  or  of  any  foreign  government,  and  doing  business 
in  this  State,  or  which  may  hereafter  engage  in  business  in  this  State,  shall  be 
deemed  and  taken  to  be  corporations  of  this  State  for  the  purposes  of  jurisdic- 
tion and  shall  be  subject  to  the  jurisdiction  of  the  courts  of  this  State,  and  may 
sue  and  be  sued  therein  in  the  mode  and  manner  that  is,  or  may  be  by  law 
directed  in  the  case  of  corporations  created  or  organized  under  the  laws  of  this 
State.  The  stocks  or  shares  of  such  foreign  corporations  and  joint  stock 
companies  doing  business  in  this  State  shall  be  subject  to  attachment  in  the 
same  manner  as  now  provided  by  law  in  the  case  of  domestic  corporations. 

Powder  River  Cattle  Co.  v.  Commissioners,  9  Mont,  145;  23  Pac.  383 ;  Amer.  H  S.  Co. 
v  O'Rourke,  23  Mont.  630;  59  Pac.  910;  McNaughton  Co.  v.  McGirl,  20  Mont.  124;  49 
Pac.  651. 


410 


DIGEST   OF   INCORPORATION    ACTS.  —  NEBRASKA. 


NEBRASKA. 

(The  references  are  to  Cobbey's  Annotated  Statutes  of  Nebraska  for  1907,  unless  otherwise 
stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Nebraska  is  found  in  Cobbey's  Annotated 
Statutes  of  Nebraska  for  1907.  Special  acts  are  provided  for  banks,  building 
and  loan,  railway,  safe  deposit  and  trust,  street  railway,  fidelity,  and  guaranty 
companies.  Under  the  General  Act  parties  may  incorporate  for  any  lawful 
business,  including  the  construction  of  canals,  railways,  bridges,  and  other 
works  of  internal  improvement. 

2.  Incorporators. — Any  number  of  persons  may  incorporate.  There  are 
no  residential  requirements  (sec.  4116). 

3.  Contents  of  the  Articles  of  Incorporation.  —  It  is  customary  to  pro- 
vide in  the  articles  of  incorporation  for  the  following  matters : 

a.  Name.  —  The  name  of  the  corporation.  Similarity  of  names  is  not  for- 
bidden (sec.  4123). 

b.  Domiciliary  Office.  —  The  principal  place  within  the  State  for  the  trans- 
action of  business  (Id.). 

c.  Purposes.  —  The  general  nature  of  the  business  to  be  transacted.  This 
would  seem  to  permit  of  the  incorporation  of  a  company  for  more  than  one 
purpose.  The  Secretary  of  State  construes  the  act  to  permit  of  the  insertion 
of  any  number  of  purposes  (Id.). 

d.  Capital  Stock.  —  The  amount  of  capital  stock  authorized,  and  time  and 
conditions  upon  which  it  is  to  be  paid  in.  The  capital  stock  may  be  any  amount. 
The  par  value  of  shares  may  be  any  amount.  It  is  customary  to  insert  provision 
that  in  case  new  stock  is  issued  it  shall  be  distributed  pro  rata  among  the  exist- 
ing stockholders  (Id.). 

e.  Duration.  —  Time  of  the  commencement  and  termination  of  the  corpo- 
ration.   The  corporate  existence  may  be  perpetual  if  desired  (Id.). 

/.  Corporate  Indebtedness.  —  Highest  amount  of  indebtedness  or  liability  to 
which  the  corporation  is  at  any  time  to  subject  itself.  The  corporate  indebted- 
ness cannot  exceed  two-thirds  of  the  capital  stock  (sec.  4120). 

g.  Directors.  —  A  statement  must  be  made  to  the  effect  that  the  affairs  and 
business  of  the  corporation  shall  be  conducted  by  a  board  of  directors  of  a  cer- 
tain designated  number  and  by  the  officers  by  them  to  be  elected  as  hereinafter 
provided  (sec.  4123). 

h.  Organization  and  Annual  Meeting.  —  A  statement  to  the  effect  that  the 
first  meeting  of  the  corporation  shall  be  held  upon  the  day  of  the  organization 
of  the  corporation,  and  thereafter  the  annual  meeting  shall  be  held  at  the  office 
of  the  corporation  on  a  certain  designated  day.  This  should  be  followed  by 
a  statement  that  at  such  meeting  and  at  the  annual  meetings  thereafter  the 
board  of  directors  shall  be  elected  by  the  stockholders  from  their  own  number 
to  hold  office  until  the  annual  meeting  next  after  their  election  and  until  their 
successors  are  elected  and  qualify  (Id.). 

i.  Officers.  —  A  provision  to  the  following  effect  should  be  inserted.  The 
directors  shall  in  each  instance,  as  soon  as  convenient  after  their  election,  elect 
from  their  own  number  a  president,  vice-president,  secretary,  and  treasurer,  who 

411 


DIGEST    OF    INCORPORATION    ACTS.  —  NEBRASKA. 

shall  hold  office  until  the  annual  meeting  next  after  their  election  and  until  their 
successors  are  elected  and  qualify.  Any  two  of  said  offices  may  be  held  by  one 
and  the  same  person,  excepting  the  offices  of  president  and  vice-president  (Id.). 

j.  By-Laws.  —  The  board  of  directors  shall  have  full  power  and  authority 
to  make  all  rules  and  by-laws  for  the  proper  government  and  control  of  the 
business  affairs  of  the  corporation,  and  (if  desired)  they  may  alter  and  amend 
the  same  at  pleasure  (Id.). 

k.  Filling  of  Vacancies.  —  Vacancies  occurring  in  the  board  of  directors 
shall  be  filled  by  the  stockholders.  Offices  vacated  from  whatever  cause  shall 
be  filled  by  the  board  of  directors  (Id.). 

I.  Amendments.  —  Provisions  may  be  inserted  providing  as  follows :  These 
.articles  of  incorporation  may  be  amended  at  any  time.  Every  amendment 
shall  be  first  approved  by  a  two-thirds  vote  of  the  entire  board  of  directors, 
and  upon  being  so  approved,  it  shall  be  entered  at  large  upon  the  records  of 
the  board.  A  draft  of  the  proposed  amendment,  or  amendments  as  the  case 
may  be,  shall  then  be  submitted  to  each  stockholder,  with  the  notice  of  the 
meeting  called  for  the  purpose  of  voting  upon  the  same,  which  notice  shall  be 
given  at  least  ten  days  prior  to  the  date  fixed  for  the  meeting.  If  such  amend- 
ment or  amendments,  or  either  of  them,  shall  then  be  approved  by  the  holder 
or  holders  of  two-thirds  of  the  capital  stock  of  the  corporation,  each  and  every 
amendment  so  approved  shall  be  considered  adopted  and  be  made  a  part  of  the 
articles  of  incorporation,  and  the  board  of  directors  shall  thereafter  subscribe, 
acknowledge,  record,  and  publish  the  same,  as  by  law  required  (sec.  4125). 

4.  Statutory  Powers.  — The  statute  merely  enumerates  the  common  law 
powers  of  corporations  (sec.  4117;  also  sees.  4101,  4120,  4129,  4249).  By  con- 
stitutional provision  the  legislature  is  required  to  provide  by  law  for  cumula- 
tive voting  in  person  or  by  proxy  in  the  election  of  directors  (Cons.,  Art.  XIII. 
sec.  5). 

Williams  v.  Lowe,  4  Neb.  382;  Enterprise  Ditch  Co.  v.  Moffitt,  58  Neb.  642;  79  N.  W. 
560;  Fremont  Carriage  Co.  v.  Thomsen  (.Neb.),  91  N.  W.  376;  McLeod  v.  Lincoln  Medical 
College  (Neb.),  98  N.  W.  672. 

5.  Procuring  the  Charter.  —  The  articles  of  incorporation  must  be  signed 
and  acknowledged  by  each  of  the  incorporators  (sec.  4123).  After  the  articles 
have  been  thus  signed  and  acknowledged  they  must  be  filed  in  the  office  of 
the  Secretary  of  State.  Before  such  copy  can  be  filed  the  organization  tax 
must  be  paid,  together  with  the  fifing  fees.  Thereupon  the  corporation  be- 
comes a  body  corporate.  The  law  specifically  provides  that  no  body  of  men 
acting  as  a  corporation  under  the  provisions  of  the  Business  Corporation  Act 
shall  be  permitted  to  set  up  the  want  of  legal  organization  as  a  defence  to  any 
action  brought  against  them  as  a  corporation:  nor  shall  any  person  suing  on 
a  contract  made  with  such  corporation  or  for  an  injury  to  the  property  of  said 
corporation,  be  permitted  to  set  up  the  want  of  legal  organization  in  defence  of 
said  action.  The  articles  of  incorporation  must  also  be  filed  with  the  county 
clerk  in  the  county  where  the  corporation's  headquarters  are  to  be  located 
(sec.  4124). 

6.  Corporate  Indebtedness. — The  amount  of  corporate  indebtedness 
must  not  exceed  two-thirds  of  the  capital  stock  (sec.  4120). 

7.  Organization  Tax.  —  On  filing  articles  of  incorporation  there  shall  be 
paid  to  the  Secretary  of  State  the  following  fees :  Where  the  capital  stock  of  the 
proposed  corporation  is  $10,000  or  less,  the  filing  fee  is  $10;  where  such  capi- 
talization is  more  than  $10,00G  but  does  not  exceed  $25,000,  $20;   where  such 

412 


DIGEST    OF    INCORPORATION    ACTS.  —  NEBRASKA. 

capitalization  is  more  than  $25,000  and  does  not  exceed  S100,000,  $50;  where 
the  capitalization  is  more  than  $100,000,  the  filing  fee  is  50  cents  for  each  addi- 
tional $1,000  in  excess  of  $100,000  (sec.  9525). 

8.  Filing  and  Recording  Fees.  —  There  are  no  fees  payable  to  the  Secre- 
tary of  State  for  filing  articles  of  incorporation,  except  the  payment  of  the  organ- 
ization tax.  A  recording  fee,  however,  of  10  cents  per  folio  of  one  hundred  words 
is  charged.  For  issuing  a  certified  copy  of  the  articles  of  incorporation  the 
charge  is  10  cents  per  hundred  words  and  $1  for  certificate.  For  copies  of  ex- 
emplification of  records  with  seal  for  each  one  hundred  words,  10  cents ;  for  filing 
certificate  of  increase  of  capital  stock  of  any  corporation,  domestic  or  foreign, 
$5  ;  for  each  one  thousand  dollars  of  increase  capital  stock  so  certified,  50  cents ; 
for  filing  certificate  of  decrease  of  capital  stock,  $5 ;  for  filing  articles  of  decree 
of  court  changing  the  name  of  any  corporation,  $5;  for  filing  amendment  to 
articles  of  incorporation,  $5;  for  issuing  license,  $1.  The  fees  for  filing  in  the 
office  of  the  county  clerk  average  about  $3.  Publication  of  notice  of  intention 
to  incorporate  averages  from  $10  to  $15  (sec.  9525). 

9.  Commencing  Business.  —  Before  a  corporation  can  transact  any  busi- 
ness except  its  own  organization,  it  must,  in  addition  to  adopting  articles  of 
incorporation  and  filing  and  recording  them  in  the  office  of  the  Secretary  of 
State,  also,  file  said  articles  with  the  county  clerk  of  the  county  where  their 
headquarters  are  to  be  located  (sec.  4124;  Laws  of  1911,  chap.  28).  Within  four 
months  after  fifing  the  articles  a  notice  must  be  published  in  a  newspaper  near 
the  principal  place  of  business  for  four  weeks,  setting  forth  the  corporation's 
name,  principal  place  of  business,  general  nature  of  the  business,  amount  of 
capital  stock  authorized,  the  time  and  conditions  of  payment,  time  of  com- 
mencement and  termination,  highest  amount  of  indebtedness  or  liability  to 
which  the  corporation  is  at  any  time  to  subject  itself,  and  by  what  officers  its 
affairs  are  to  be  conducted.  It  is  not  necessary,  however,  for  the  corporation 
before  commencing  business  to  await  the  completion  of  the  publication  of  the 
notice  above  referred  to  (sec.  4123).  In  manufacturing  corporations  the  incor- 
porators are  ipso  facto  commissioners  to  open  the  books  for  stock  subscriptions. 
When  ten  per  cent  of  the  capital  stock  is  subscribed,  such  corporations  may 
commence  business  (sec.  4140).  The  corporation  must  organize  within  one  year 
after  its  incorporation  (sec.  4140). 

10.  Organization  Meeting.  —  Organization  meetings  must  be  held  within 
the  State.  In  the  case  of  manufacturing  corporations  the  law  provides  that 
the  incorporators  shall  be  commissioners  to  open  books  for  the  subscription 
to  the  capital  stock  of  said  company  before  the  corporation  is  organized  by  the 
adoption  of  articles  of  incorporation  as  set  forth  above.  Immediately  after 
these  articles  have  been  adopted  the  incorporators  should  meet  as  stockholders 
and  choose  a  board  of  directors  of  the  number  designated  in  the  articles.  The 
board  of  directors  shall  elect  at  this  meeting  the  officers  and  adopt  by-laws.  The 
corporation  must  organize  within  one  year  after  incorporation  (sec.  4119). 

11.  Meetings  of  Stockholders  and  Directors.  —  In  the  absence  of  any 
statute  authorizing  the  holding  of  stockholders'  meetings  outside  the  State, 
such  meetings  should  be  held  within  the  State.  Directors'  meetings  may  be 
held  without  the  State  if  the  by-laws  so  provide  (sec.  4139). 

Haskell  v.  Read  (Neb.),  93  N.  W.  997. 

12.  Directors' Qualifications  and  Liabilities. — a.  Qualifications.  The 
law  does  not  prescribe  the  number  of  directors.     There  are  no  residential  re- 

413 


DIGEST    OF    INCORPORATION    ACTS.  —  NEBRASKA. 

quirements.    The  directors  of  manufacturing  corporations  must  be  stockholders, 
and  they  must  elect  a  president  from  their  own  number.    (See  sec.  4139.) 

6.  Liabilities.  —  Directors  are  liable  for  the  illegal  payment  of  dividends 
(sees.  4133,  4139).  They  are  also  liable  if  they  are  guilty  of  any  deception  as 
to  assets  or  liabilities  (sec.  2098). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent 
of  their  unpaid  stock  subscriptions.  If  the  corporation  fails  to  publish  the 
annual  notice  of  existing  debts  hereafter  referred  to,  then  in  case  the  assets  of 
the  corporation  are  thereafter  exhausted,  leaving  debts  unpaid,  the  stockholders 
are  liable  to  the  amount  of  stock  owned  by  them  for  all  debts  contracted  before 
such  notice  was  given  (sec.  4128).  If  any  corporation  fails  to  comply  substan- 
tially with  the  provisions  of  law  relative  to  giving  notice  and  other  requisites  of 
organization,  then  in  such  case,  after  the  assets  of  the  corporation  are  first  ex- 
hausted, the  property  of  stockholders  shall  be  liable  for  corporate  debts  to  the 
amount  of  capital  stock  owned  by  them  (sec.  4131).  (See  also  Const.,  Art.  XL 
b,  sec.  4.) 

G.  &  A.  Co.  v.  Company,  46  Neb.  333;  64  N.  W.  978,  1097;  F.  L.  &  T.  Co.  13.  Funck,  49 
Neb.  353;  68  N.  W.  520;  Gorder  v.  Connor,  56  Neb.  781;  77  N.  W.  383;  Brown  v.  Brink, 
57  Neb.  606;  78  N.  W.  280. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  officers  as  the  by-laws  may  prescribe. 

15.  Payment  of  Capital  Stock.  —  Neither  the  Constitution  nor  the  statute 
prescribes  how  the  capital  stock  shall  be  paid  in.  In  the  absence  of  such  pro- 
vision it  is  implied  that  it  must  be  paid  in  in  money  or  money's  worth. 

G.  &  A.  Co.  v.  Company,  46  Neb.  333;  64  N.  W.  978,  1097;  Troup  v.  Horback,  63  Neb. 
795;    Penfield  v.  Company,  57  Neb.  231. 

16.  Books.  —  Stock  books  and  books  of  account  must  be  kept  at  the  princi- 
pal place  of  business  of  the  corporation  within  the  State,  and  be  open  to  the 
inspection  of  stockholders.  The  foregoing  provision  would  seem  to  apply  only 
to  manufacturing  companies  (sec.  4139). 

17.  Office. — Every  corporation  is  required  to  keep  an  office  within  the 
State  (sec.  4123).  A  copy  of  the  by-laws  must  be  posted  in  a  conspicuous 
place  in  the  office  of  the  corporation  and  be  open  to  public  inspection  (sec. 
4127). 

18.  Reports.  —  Every  corporation  must  give  notice  annually  by  publica- 
tion in  a  newspaper  published  in  the  county  where  its  principal  place  of  business 
is  located  of  the  amount  of  existing  debts.  This  statement  must  be  verified  by 
the  oath  of  the  secretary,  president,  and  clerk  (sec.  4128;  see  also  Laws  of  1909, 
chap.  111). 

19.  Anti-Trust  Statute.  —  Under  the  Act  of  1897,  chap.  79,  all  trusts  and 
conspiracies  against  trade  and  business  as  defined  in  the  statute  are  declared 
to  be  illegal  and  void.  See  also  Revised  Civil  Code,  12000  et  seq.,  12028  et  seq.> 
12012  et  seq. 

State  v.  Neb.  Dis.  Co.,  29  Neb.  700;  46  N.  W.  155. 

20.  Preferred  Stock.  —  There  is  no  express  provision  in  the  statute  au- 
thorizing the  issuance  of  preferred  stock. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter. — The  charter  may 
be  forfeited  through,  any  violation  of  the  provisions  of  the  General  Corporation 
Act,  such  as  the  payment  of  dividends  when  the  corporation  has  insufficient 
funds  to  meet  its  liabilities,  etc.  Repeated  acts  of  misuser  or  non-user  have 
been  held  to  constitute  grounds  for  forfeiture  of  franchise  (sec.  4134;    Civil 

414 


DIGEST    OF    INCORPORATION    ACTS. — NEBRASKA. 

Code,  sees.  704-727  inclusive).  The  charter  may  be  forfeited  if  the  corporation 
does  not  organize  within  one  year  after  its  incorporation. 

State  v  A.  &  N.  R.  R.  Co..  24  Neb.  143;  38  N.  W.  43;  State  v.  Nebraska  Dis.  Co.,  29 
Neb.  700;  46  N.  W.  155;  State  v.  Company,  4  Neb.  354. 

22.   Annual  Franchise  Tax.  —  No  corporation  heretofore  or  hereafter 

incorporated  under  the  laws  of  this  State,  or  of  any  other  State,  shall  do  or 
attempt  to  do  business  by  virtue  of  its  charter  or  certificate  of  incorporation, 
in  this  State  without  a  State  occupation  permit  therefor  (Laws  of  1909,  chap. 
25,  sec.  1). 

It  shall  be  the  duty  of  every  corporation  incorporated  under  the  laws  of 
the  State,  and  of  every  foreign  corporation  now  doing  business  or  which  shall 
hereafter  engage  in  business  in  this  State,  to  procure  annually  from  the  Secre- 
tary of  State  an  occupation  permit,  authorizing  the  transaction  of  business  in 
this  State,  and  it  shall  pay  therefor,  if  the  capital  stock  of  such  corporation  is 
$10,000  or  less,  $5;  over  $10,000,  but  not  exceeding  $25,000,  $10;  over  $25,000 
and  not  exceeding  $50,000,  $20;  over  $50,000  and  not  exceeding  $100,000, 
$30 ;  over  $100,000  and  not  exceeding  $250,000,  $50 ;  over  $250,000  and  not 
exceeding  $500,000,  $75 ;  over  $500,000  and  not  exceeding  $1,000,000,  $100; 
over   $1,000,000   and  not  exceeding  $2,000,000,  $150;   over   $2,000,000,  $200. 

Said  occupation  fee  shall  be  due  and  payable  on  the  1st  day  of  July  each 
and  every  year  to  the  Secretary  of  State,  who  shall  pay  the  same  into  the  State 
treasury  for  the  benefit  and  use  of  the  general  fund.  If  not  paid  on  or  before 
the  hour  of  four  o'clock  P.  M.,  on  the  20th  day  of  September,  next  thereafter, 
the  same  shall  become  delinquent  and  there  shall  be  added  to  the  occupation 
(license  fee),  as  a  penalty  for  such  delinquency,  the  sum  of  $10.  The  oc- 
cupation fee  hereby  provided  authorizes  the  corporation  to  transact  busi- 
ness during  the  year  or  for  any  fractional  part  of  such  year  in  which  such  occu- 
pation fee  is  paid.  "Year"  within  the  meaning  of  this  act  means  from  and 
including  the  1st  day  of  July  to  and  including  the  30th  day  of  June  next 
thereafter  (Laws  of  1909,  chap.  25,  sec.  2,  as  amended  by  Laws  of  1911,  chap. 
29). 

23.  Amendments.  — The  act  does  not  specify  just  what  amendments  to 
the  articles  of  incorporation  may  be  made.  It  simply  provides  that  every  change 
in  the  articles  shall  be  recorded  and  published  in  the  same  manner  as  original 
articles  are  required  to  be  filed  and  recorded  by  law  (sec.  4125).  Special  pro- 
vision, however,  is  made  in  the  case  of  reduction  of  capital  stock.  In  this  re- 
gard the  law  provides  that  the  board  of  directors  may,  with  the  written  con- 
sent of  the  persons  in  whose  name  a  majority  of  the  shares  of  the  capital  stock 
thereof  shall  stand,  reduce  the  amount  of  the  capital  stock  to  the  nominal  value 
of  the  shares  thereof,  and  issue  certificates  therefor  (sec.  4102). 

24.  Dissolution.  —  Corporations  may  be  dissolved  by  consent  of  two-thirds 
of  the  stockholders  (sec.  4126;   see  also  sees.  4106,  4107). 

Harrington  v.  Connor,  51  Neb.  214;  70  N.  W.  011. 

25.  Extension  of  Corporate  Existence.  —  Provision  is  made  for  the  ex- 
tension of  corporate  existence  for  companies  incorporated  for  the  purpose  of 
erecting  any  public  improvement  (sees.  1991,  1992). 

26.  Foreign  Corporations.  —  From  and  after  June  30,  1905,  all  foreign 
corporations  (except  transportation  companies),  before  they  may  engage  in 
business  within  the  State,  must  file  a  statement  in  the  office  of  the  Attorney- 
General  of  the  State,  signed  and  sworn  to  by  its  president,  treasurer,  or  gen- 

415 


DIGEST    OF    INCORPORATION    ACTS.  —  NEBRASKA. 

eral  manager,  and  a  majority  of  the  directors,  on  or  before  the  15th  day  of 
September  in  the  year  1906,  and  in  each  year  thereafter,  for  the  year  ending 
June  30  in  said  year,  showing  (a)  The  amount  of  its  capital  stock,  (b)  The 
market  value  of  the  same,  (c)  How  much  of  the  same  has  been  paid  in  full  in 
cash,  or  if  the  same  has  not  been  paid  in  full  in  cash,  what  has  been  received  by 
the  said  corporation,  joint-stock  company,  or  other  association  in  lieu  thereof, 
and  the  value  of  whatever  shall  have  been  so  received  by  it.  (d)  The  names 
of  the  officers  and  directors  of  such  corporation,  joint-stock  company,  or  other 
association,  and  all  agents  intrusted  with  the  general  management  of  its  affairs, 
(e)  The  amount  which  has  been  paid  in  dividends  during  said  year,  the  rate  of 
percentage  of  such  dividends,  and  times  of  paying  the  same.  (/)  A  statement 
of  all  the  stock  owned  by  it,  or  any  other  corporation,  joint-stock  company,  or 
other  association,  and  the  number  and  value  of  each  share  in  it ;  the  amount 
of  its  own  capital  stock  by  other  corporations,  joint-stock  companies,  or  other 
associations  held,  and  the  value  thereof,  and  the  amount  of  stock  in  other  cor- 
porations, joint-stock  companies,  or  other  associations  held  in  trust  for  it,  or 
in  which  it  is  interested,  directly  or  indirectly,  absolutely  or  conditionally,  legally 
or  equitably,  specifying  the  corporations,  joint-stock  companies,  or  other  associa- 
tions, (g)  It  shall  also,  on  or  before  the  30th  day  of  June  in  the  year  1906, 
file  in  the  office  of  the  Attorney-General  of  this  State  an  undertaking,  signed 
by  such  officers,  general  manager,  and  directors,  that  they  will  comply  with 
the  provisions  of  this  and  all  other  laws  of  this  State  in  the  management  of  the 
affairs  of  such  corporation,  joint-stock  companies,  or  associations,  and  that  they 
accept  the  provisions  and  liabilities  of  this  act,  and  the  obligations  by  it  imposed, 
so  long  as  they  shall  continue  to  hold  or  exercise  such  office,  and  shall  thereafter, 
within  ten  days  of  their  entering  upon  the  duties  of  such  offices,  file  a  like  under- 
taking, signed  by  every  officer,  general  manager,  or  director  thereof  elected  or 
appointed  to  such  office  or  employment  (sec.  12031). 

This  statement  shall  be  in  addition  to  all  statements  now  or  hereafter  re- 
quired by  law,  or  by  any  other  public  authority,  in  this  State.  In  addition  to 
the  foregoing  every  foreign  corporation  shall,  before  it  is  authorized  to  trans- 
act business  in  the  State,  make  and  file  a  certificate  signed  by  the  president  or 
secretary  of  such  corporation,  duly  acknowledged,  with  the  Secretary  of  State 
and  in  the  office  of  the  register  of  deeds  in  the  county  in  which  its  principal 
place  of  business  in  this  State  is  located,  designating  the  principal  place  where 
the  business  of  this  corporation  shall  be  carried  on  in  this  State,  and  therein 
naming  and  appointing  an  agent  or  agents  in  this  State,  one  of  whom  shall  be 
the  auditor  of  public  accounts  of  the  State,  who  shall  in  such  certificate  be 
designated  by  his  official  title,  and  one  of  whom  shall  reside  at  the  principal 
place  of  business  of  said  corporation,  upon  whom  service  of  process  in  behalf 
of  the  corporation  may  be  had  (Laws  of  1909,  chap.  28).  The  Secretary  of 
State  shall  keep  a  book  in  which  shall  be  recorded  all  such  certificates  and 
books  and  addresses  to  be  filed  with  him,  and  shall  charge  and  receive  from 
every  such  foreign  corporation  10  cents  per  folio  for  recording  and  transcribing 
the  same  (Laws  of  1907,  chap.  32).  Under  Laws  of  1905,  chap.  162,  sec.  7, 
foreign  corporations  are  not  permitted  to  control  domestic  corporations.  The 
license  and  annual  franchise  taxes  imposed  upon  foreign  corporations  are  the 
same  as  that  imposed  upon  domestic  corporations  of  like  capitalization.  (See 
ante,  sec.  7.) 

Schmitt  &  Bro.  Co.  v.  Mahoney,  60  Neb.  20;  82  N.  W.  99;  Pioneer  Savings  &  Loan 
Ass'n  v.  Eyer,  62  Neb.  810;  87  N.  W.  1058;  State  v.  Standard  Oil  Co.,  61  Neb.  28;  84  N.  W. 
413;  State  v.  Fleming  (Neb.),  97  N.  W.  1063. 

416 


DIGEST    OF    INCORPORATION    ACTS. NEVADA. 


NEVADA. 

(References  below  are  to  the  Laws  of  Nevada,  1903,  chap.  88,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Nevada  is  to  be  found  in  the  Laws  of  1903, 
chap.  88,  sees.  1-114.  Under  this  act  corporations  may  be  formed  for  the 
transaction  of  any  lawful  business,  within  or  without  the  State,  except  insur- 
ance, surety,  or  railway  companies.  These  last  may  be  incorporated  under 
the  act  if  formed  to  transact  business  exclusively  out  of  the  State. 

2.  Incorporators.  —  Three  or  more.    No  residential  requirements  (sec.  1). 

See  In  re  L.  B.  Co.,  1  San.  349. 

3.  Contents  of  the  Certificate  of  Incorporation.  — The  certificate  must 
set  forth : 

a.  Name.  —  Similarity  of  names  is  forbidden  (sec.  4,  sub.  1).  It  must  end 
with  "incorporated,"  or  contain  one  of  the  following  words:  "Association," 
f  company,"  "corporation,"  "club,"  "society,"  or  "syndicate"  (Id.). 

b.  Purposes.  —  Objects  for  which  the  company  is  formed.  Any  number  of 
purposes  may  be  inserted  (sec.  4,  sub.  3). 

c.  Capital  Stock.  —  Not  less  than  $2,000 ;  number  of  shares  and  par  value 
thereof,  which  may  be  any  amount.  Amount  of  subscribed  capital  stock  with 
which  it  will  begin  business  not  less  than  $1,000.  Amount  actually  subscribed 
and  amount  actually  paid  up,  if  any.  If  preferred  stock  is  to  be  issued,  a  descrip- 
tion thereof  and  terms  of  its  creation  must  be  set  forth  (sec.  4,  sub.  4). 

d.  Duration.  —  May  be  perpetual,  if  desired  (sec.  4,  sub.  6). 

e.  Original  Subscribers.  —  The  names  of  each  of  the  original  subscribers  to 
the  capital  stock  and  the  amount  subscribed  by  each  (Laws  of  1905,  p.  51). 

/.  Directors.  —  Whether  the  members  of  the  first  governing  board  shall  be 
styled  "directors"  or  "trustees,"  and  the  number  thereof,  which  shall  not  be 
less  than  three  (sec.  4,  sub.  7). 

g.  Domiciliary  Office.  —  The  location  of  the  principal  office  within  t ho  State, 
giving  the  street  and  number  if  practicable  (sec.  4,  sub.  2).  If  not  so  described 
as  to  be  easily  located,  the  Secretary  of  State  shall  refuse  to  issue  a  certificate 
until  such  location  is  made  and  established  (Laws  of  L905,  chap.  51). 

h.  Assessments.  —  Whether  the  stock  shall  be  subject  to  assessments  or  not 
after  the  subscribed  price  or  par  value  thereof  has  been  paid.  Unless  assess- 
ments are  provided  for,  paid  up  stock  and  stock  issued  as  fully  paid  up  is  non- 
assessable, and  articles  cannot  be  amended  in  this  respect. 

i.  Regulation  of  Internal  Affairs.  —  Any  provision  for  the  regulation  of  the 
internal  affairs  of  the  corporation  that  may  be  desired  may  be  inserted  (sec.  4, 
sub.  9). 

4.  Statutory  Powers. — The  act  enumerates  the  common  law  powers, 
and  also  confers  the  following  additional  powers:  To  vote  by  proxy,  to  forfeit 
stock  for  non-payment  of  assessments,  to  issue  preferred  stock,  to  transact 
business  outside  of  the  State,  to  hold  stockholders'  and  directors'  meetings  out- 
side of  the  State,  to  permit  cumulative  voting,  to  appoint  an  executive  com- 
mittee from  the  board  of  directors,  to  consolidate  with  other  corporations,  to 
issue  stock  for  labor  or  property,  to  issue  bonds,  to  remove  director-,  to  dele- 

27  417 


DIGEST    OF    INCORPORATION    ACTS. NEVADA. 

gate  the  power  to  directors  to  adopt  by-laws,  to  surrender  charter,  to  hold  stock 
in  other  corporations,  and  to  fix  number  of  directors  by  by-laws  (sees.  7-10, 
14,  17,  20,  23,  43-,  54,  78,  110). 

Sutro  v.  Company,  19  Nev.  121;  7  Pac.  271;  Bassett  v.  Company,  15  Nev.  293. 

5.  Procuring  the  Charter.  —  The  corporators  must  subscribe  and  acknowl- 
edge the  articles,  after  which  they  must  be  filed  and  recorded  in  the  office  of 
the  clerk  of  the  county  where  the  principal  place  of  business  is  to  be  located. 
Next,  a  copy  of  these  articles,  certified  under  the  seal  of  the  clerk  of  said  county, 
must  be  filed  and  recorded  with  the  Secretary  of  State.  This  official,  after 
payment  to  him  of  the  organization  tax  and  fifing  fees,  issues  a  certificate  that 
a  copy  of  the  articles  containing  the  required  statement  of  facts  has  been  filed 
in  his  office.  Thereupon  the  corporate  existence  commences  (sees.  3,  5,  6). 
Within  thirty  days  after  organization  there  must  be  filed  with  the  Secretary  of 
State  a  certificate  of  the  election  of  trustees,  together  with  certain  details 
required  by  sec.  85  of  the  Code.  A  certified  copy  of  the  articles  must  be 
filed  in  every  county  in  which  the  corporation  holds  property  or  transacts 
business  or  to  which  its  office  may  be  removed  (sees.  69,  70). 

6.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon 
corporate  indebtedness.  By  a  two-thirds  vote  of  the  stock,  corporate  bonds 
may  be  issued  and  the  board  of  directors  may  make  the  same  convertible  into 
common  stock  (sec.  36).  Bondholders  may  be  given  the  right  to  vote  and  to 
inspect  books  (sec.  11). 

7.  Organization  Tax.  —  Before  incorporation  there  must  be  paid  to  the 
Secretary  of  State  10  cents  for  each  thousand  dollars  of  capital  stock  author- 
ized, but  in  no  case  less  than  $10  (Laws  of  1905,  chap.  51). 

8.  Filing  and  Recording  Fees.  —  There  is  no  charge  for  filing  and  record- 
ing in  the  Secretary  of  State's  office  other  than  the  payment  of  the  organiza- 
tion tax.  Neither  is  any  charge  made  for  furnishing  certificates  of  incorporation.  . 
The  cost  of  certified  copy  of  charter  is  40  cents  per  folio  of  one  hundred  words, 
and  $5  for  certificate  and  seal  of  State.  The  charge  is  only  $2  when  copy  is 
furnished.  In  drafting  the  certificate  of  incorporation  it  is  always  best  to  have 
four  copies  prepared,  one  for  filing  in  the  county  clerk's  office,  one  for  filing  in 
the  Secretary  of  State's  office,  one  to  be  certified  by  law  and  returned  to  the 
incorporators,  and  one  to  be  filed  in  the  office  of  the  Nevada  agent.  The  charge 
for  filing  and  recording  amendments  to  articles  is  $10.  The  filing  and  recording 
fees  in  local  county  offices  vary  according  to  the  population  of  the  county.  The 
filing  fee  ranges  from  15  to  25  cents,  and  the  recording  fee  from  20  to  30  cents 
per  folio ;  the  cost  of  affixing  certificate  to  copy  ranges  from  75  cents  to  $1. 
The  cost  of  filing  certificate  of  election  of  directors,  etc.,  with  Secretary  of  State 
is$l  (sec.  102). 

9.  Commencing  Business.  —  Business  may  be  commenced  as  soon  as  the 
certified  copy  of  articles  is  filed  in  the  office  of  the  Secretary  of  State.  The 
time  limited  by  statute  within  which  business  must  be  commenced  is  two  years 
(sec.  5).  Corporate  existence  cannot  be  collaterally  attacked  (sec.  52).  A 
certified  copy  of  the  articles  must  be  filed  in  every  county  in  which  the  corpora- 
tion holds  property  or  transacts  business,  or  to  which  its  office  may  be  removed 
(sees.  69,  70). 

10.  Organization  Meeting.  —  May  be  held  within  or  without  the  State. 
Provision  for  calling  the  same  is  made  in  the  act  (sees.  12,  13,  and  38).  Sur- 
viving incorporators  are  given  the  right  to  appoint  persons  to  act  in  place  of 
deceased  incorporators  (sec.  38). 

418 


DIGEST    OF    INCORPORATION    ACTS.  —  NEVADA. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
may  be  held  within  or  without  the  State,  according  as  the  by-laws  provide. 
Voting  by  proxy  permitted.  Cumulative  voting  allowed.  Directors'  meet- 
ings may  be  held  wherever  the  by-laws  provide  (sees.  13,  14,  17,  20,  and  23). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — ■ 
There  must  be  at  least  three  directors.  They  need  not  be  stockholders.  They 
must  take  the  oath  of  office.  No  residential  requirements  (sec.  4,  sub.  7,  9). 
They  are  empowered  to  appoint  an  executive  committee  of  two  or  more  of  their 
number  (sec.  23).  The  power  to  adopt  by-laws  may  be  delegated  to  the  directors 
either  by  making  provision  therefor  in  the  original  articles,  or  by  vote  or  written 
assent  of  two-thirds  of  the  stockholders  (sec.  21).  Cumulative  voting  in  the 
election  of  directors  is  mandatory  unless  otherwise  prescribed  in  the  certificate 
of  incorporation  (sec.  20).  Bondholders  and  secured  creditors  may  be  allowed 
to  vote  at  the  election  of  directors  by  making  provision  to  that  effect  in  the 
certificate  of  incorporation  (sec.  11).  No  stock  may  be  voted  at  any  election 
for  directors  which  has  been  transferred  on  the  books  of  the  company  within 
twenty  days  before  such  election  (sec.  58).  Fractions  of  shares  cannot  be 
voted  (oec.  17). 

b.  Liabilities.  —  Jointly  and  severally  liable  where  they  give  out  fraudulent 
reports.  Also  liable  for  illegal  declaration  of  dividends  or  unlawful  withdrawal 
of  capital  stock,  where  they  consent  thereto  (sees.  68,  73,  77).  They  are  also 
liable  for  corporate  debts  contracted  before  filing  a  certificate  of  any  decrease 
of  capital  stock  (sec.  42).  As  to  penalty  for  filing  false  reports,  see  Laws  of 
1907,  chap.  60. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  only  liable  for  debts 
of  the  corporation  to  the  extent  of  their  unpaid  stock  subscriptions  (sees.  31, 
32).  The  statutory  liability  of  stockholders  or  directors  of  foreign  corpora- 
tions will  not  be  enforced  in  Nevada  (sec.  33).  By  provision  made  therefor  in 
the  articles  of  incorporation,  full  paid  stock  may  be  made  liable  for  corporate 
debts  (sec.  4).  For  non-compliance  with  law  in  respect  to  reduction  of  capital 
stock,  stockholders  are  liable  for  such  sums  as  they  receive  respectively  out  of 
the  amount  of  reduced  stock  (sec.  42). 

Thompson  v.  Bank,  19  Nev.  171;    7  Pac.  870. 

14.  Stock  Certificates. — Must  be  signed  by  president  or  vice-president 
and  secretary  or  treasurer. 

From  and  after  the  15th  day  of  April,  1909,  every  corporation  owning, 
leasing,  working,  or  developing  any  patented  or  unpatented  mining  claim  in 
this  State,  and  selling  or  offering  for  sale,  either  directly  or  indirectly,  or  au- 
thorizing or  causing  to  be  issued  or  sold,  any  of  its  stock  or  shares  for  the  pro- 
motion or  development  of  any  such  mining  claim,  shall  print  or  stamp  across 
the  face  of  each  certificate  of  its  treasury  stock  or  shares  (as  defined  by  this 
act)  the  words  "Treasury  Stock"  in  English  letters  or  characters  a1  least  one- 
half  of  an  inch  in  height,  and  not  less  than  one-eighth  of  an  inch  in  width,  said 
letters  or  characters  to  be  printed  or  stamped  as  aforesaid  in  ink  of  a  conspicu- 
ously different  color  than  the  ink  used  in  printing,  writing,  or  stamping  the 
body  or  other  matter  printed,  stamped,  or  written  thereon  (Laws  of  1909, 
p.  62,  sec.  3). 

From  and  after  the  15th  day  of  April,  A.  D.  1909,  every  corporation  own- 
ing leasing,  working,  or  developing  any  patented  or  unpatented  mining  claim 
in  this  State,  and  selling  or  offering  for  sale,  either  directly  or  indirectly,  or 

419 


DIGEST    OF    INCORPORATION    ACTS. — NEVADA. 

authorizing  or  causing  to  be  issued  or  sold,  any  stock  or  shares  therein 
that  have  not  been  specifically  set  aside  by  such  corporation  for  the  purposes 
of  raising  money  or  means  for  the  development  of  the  mineral  resources 
of  such  mining  claims  or  claim,  or  for  making  necessary  improvements 
thereon,  shall  print  or  stamp  across  the  face  of  each  certificate  so. issued  or 
authorized  to  be  issued,  sold,  or  offered  for  sale,  as  aforesaid,  the  words  "  Pro- 
motion Stock"  in  English  letters  or  characters  at  least  one-half  of  an  inch  in 
height  and  one-eighth  of  an  inch  in  width,  and  said  letters  or  characters  to  be 
printed  or  stamped  thereon,  as  aforesaid,  in  ink  of  a  conspicuously  different 
color  than  the  ink  used  in  printing,  writing,  or  stamping  the  body,  or  other 
matter  printed,  stamped,  or  written  thereon. 

All  stock,  or  shares  of  every  mining  corporation  doing  business  in  this 
State  that  have  been  or  shall  be  specifically  set  aside  to  sell  for  money,  or  other 
valuable  consideration,  and  the  proceeds  of  which  are  to  be  used  for  the  actual 
development  of  the  mineral  resources  of  any  mining  claim  or  for  the  purpose 
of  making  necessary  improvements  thereon,  is  hereby  deemed  and  declared 
to  be  treasury  stock,  and  all  other  stock  of  such  corporation  is  hereby  deemed 
and  declared  to  be  promotion  stock,  within  the  meaning  of  this  act. 

From  and  after  the  15th  day  of  April,  1909,  it  shall  be  unlawful  for  any 
corporation  or  any  officer,  agent,  or  director  thereof,  owning,  claiming,  leasing, 
or  working,  or  developing  any  mining  property  in  the  State  to  issue  any  written 
or  printed  certificate  representing  one  or  more  shares  of  its  stock,  or  to  sell  or 
offer  for  sale  any  certificate  thereafter  issued  by  any  such  corporation  upon 
which  certificate  is  not  stamped  or  printed  the  words  "Treasury  Stock"  or 
"Promotion  Stock"  as  defined  and  required  by  the  provisions  of  this  act,  and 
it  shall  be  unlawful  for  any  person,  or  any  officer,  agent,  or  director  of  any 
corporation  subject  to  this  act  to  so  stamp  or  print  any  such  certificate  as 
"Treasury"  stock  when  in  fact  the  same  represents  "promotion"  stock,  or  to 
bo  stamp  or  print  any  such  certificate  "  promotion  "  stock  when  in  fact  the  same 
represents  "treasury"  stock,  as  said  classes  of  stock  are  defined  by  section  5 
hereof. 

Each  and  every  provision  of  this  act  is  hereby  declared  to  be  mandatory, 
and  the  officer  or  agent  of  any  mining  corporation  subject  to  the  provisions 
hereof  who  shall  fail  or  neglect  to  execute  and  to  file  the  statement  or  affidavits 
required  by  sections  1  and  2  of  this  act,  or  to  otherwise  comply  with  all  other 
provisions  hereof,  or  who  shall  wilfully  do  or  perform  any  act  or  thing  herein 
declared  to  be  unlawful,  shall  be  deemed  guilty  of  a  misdemeanor,  and  shall 
upon  conviction  be  fined  in  any  sum  not  less  than  $100  nor  more  than  $500,  or 
shall  be  imprisoned  in  the  county  jail  for  a  period  of  not  less  than  fifty  days, 
nor  more  than  six  months,  or  be  punished  by  both  such  fine  and  imprisonment. 
Any  person  who  shall  act  as  agent  for  any  foreign  corporation,  subject  to 
the  provisions  of  this  act,  that  has  not  strictly  complied  with  sections  1  and  2 
hereof  shall  be  guilty  of  a  misdemeanor,  and  shall  be  filed  in  any  sum  not  less 
than  $100  nor  more  than  $500,  or  be  confined  in  the  county  jail  for  a  term 
of  not  less  than  fifty  days  nor  more  than  six  months,  or  by  both  such  fine  and 
imprisonment. 

Evei*y  corporation,  domestic  and  foreign,  violating  any  of  the  provisions 
or  requirements  of  this  act,  shall  forfeit  to  the  State  of  Nevada  the  sum  of  one 
thousand  ($1,000)  dollars  and  costs  of  suit,  to  be  recovered  in  an  action  in  the 
name  of  the  State  instituted  by  the  Attorney-General,  or  any  district  attorney 
at  the  request  of  the  Attorney-General,  nor  shall  any  such  corporation  failing 

420 


DIGEST    OF    INCORPORATION    ACTS.  —  NEVADA. 

to  comply  with  sections  1  and  2  of  this  act  maintain  or  defend  any  action  in  any 
court  of  this  State,  provided  that  upon  the  production  of  a  certificate  of  the 
county  recorder  that  the  statements  and  affidavits  required  by  said  sections 
have  been  duly  filed  (except  as  to  the  time  the  same  was  required  to  be  filed), 
any  such  action  may  be  maintained  or  defended ;  provided  that  the  provisions 
of  this  act  shall  not  apply  to  any  action  now  pending. 

In  corporations  already  formed,  or  which  may  hereafter  be  formed,  under 
this  act,  or  otherwise,  for  mining  purposes,  where  the  amount  of  the  capital 
stock  of  such  corporation  consists  of  the  aggregate  valuation  of  the  whole 
number  of  feet,  shares,  or  interest  in  any  mining  claim  in  this  State,  for  the 
working  and  development  of  which  such  corporation  shall  be  or  has  been  formed, 
no  actual  subscription  to  the  capital  stock  of  such  corporation  shall  be  neces- 
sary, but  each  owner  in  said  mining  claim  shall  be  deemed  to  have  subscribed 
such  an  amoimt  to  the  capital  stock  of  such  corporation  as  under  the  by-laws 
will  represent  the  value  of  so  much  of  his  or  her  interest  in  said  mining  claim, 
the  legal  title  to  which  he  or  she  may,  by  deed,  deed  of  trust,  or  other  instru- 
ment, vest,  or  have  vested  in  such  corporation,  for  mining  purposes,  such  sub- 
scription to  be  deemed  to  have  been  made  and  to  have  been  fully  paid  on  the 
execution  and  delivery  to  such  corporation  and  its  acceptance  by  such  cor- 
poration of  such  deed,  deed  of  trust,  or  other  instrument ;  nor  shall  the  validity 
of  any  assessment  levied  or  which  may  hereafter  be  levied,  by  the  board  of 
directors  or  trustees  of  such  corporation,  provided  such  corporation  has  the 
right  and  power  to  levy  assessments,  be  affected  by  reason  of  the  fact  that  the 
full  amount  of  the  capital  stock  of  such  corporation,  as  mentioned  in  its  cer- 
tificate of  incorporation,  shall  not  have  been  subscribed  as  provided  in  this 
section,  provided  that  the  greater  portion  of  said  amount  of  capital  stock  shall 
have  been  subscribed,  and  provided  further,  that  this  section  shall  not  be  so 
construed  as  to  prohibit  the  stockholders  of  any  corporation  formed,  or  which 
may  be  formed,  for  mining  purposes,  as  provided  in  this  section,  from  regulat- 
ing the  mode  of  making  subscriptions  to  its  capital  stock  and  calling  in  the  same 
by  by-laws  or  express  contract;  provided  further,  that  no  corporation  here- 
after formed  shall  ever  have  power  to  assess  paid  up  stock  unless  in  its  original 
articles  or  certificate  of  incorporation  such  power  is  reserved,  and  no  amend- 
ment of  such  original  in  this  respect,  or  to  give  such  power,  shall  ever  be 
made. 

15.  Preferred  Stock.  —  The  act  expressly  authorizes  corporations  organ- 
ized thereunder  to  create  two  or  more  kinds  of  stock,  of  such  classes  and  with 
such  designations,  preferences,  or  voting  powers  as  shall  be  expressed  in  the 
certificate  of  incorporation  or  in  any  amendment  thereof.  At  no  time,  how- 
ever, may  the  total  amount  of  preferred  stock  issued  and  outstanding  exceed 
two-thirds  of  the  capital  stock  paid  for  in  cash  or  property,  and  such  preferred 
6tock  may,  if  desired,  be  made  subject  to  redemption  at  any  time  after  three 
years  from  the  issue  thereof  at  a  price  not  less  than  par,  and  the  holders  thereof 
shall  be  entitled  to  receive  and  the  corporation  shall  be  bound  to  pay  thereon 
dividends  at  such  rates  and  on  such  conditions  as  shall  be  stated  in  the  original 
or  amended  certificate  of  incorporation  not  exceeding  ten  per  cent  per  annum, 
payable  quarterly,  half  yearly,  or  yearly,  and  such  dividends  may  be  payable 
before  any  dividend  shall  be  set  apart  or  paid  on  the  common  stock.  Such 
dividends  may  be  made  cumulative  provided  the  corporation  shall  set  apart 
or  pay  such  dividends  to  the  holders  of  non-cumulative  dividends  before  any 
dividends  shall  be  paid  on  the  common  stock,  but  in  no  event  shall  tho  holders 

421 


DIGEST    OF    INCORPORATION    ACTS.  —  NEVADA. 

of  any  class  of  stock  be  personally  liable  for  the  debts  of  the  corporation  nor 
for  the  payment  of  dividends  (sec.  4,  sub.  4,  sec.  10).  (See  as  to  conversion  of 
preferred  stock  into  bonds,  sec.  36.) 

16.  Payment  of  Capital  Stock.  —  May  be  paid  for  in  money,  labor,  or 
property  (sees.  28,  54,  55,  99). 

F.  A.  N.  Co.  v.  Tides,  26  Nev.  158;  65  Pac.  373. 

17.  Books.  — Original  or  duplicate  stock  ledger  must  be  kept  at  principal 
office  within  the  State  for  inspection  of  stockholders  (sec.  14).  There  must  also 
be  kept  at  the  principal  office  a  copy  of  the  articles  of  incorporation  and  of  the 
by-laws  (sees.  14,  22,  58,  71).  Stockholders  and  creditors  may  demand  sworn 
copies  of  the  stock  register  on  payment  of  expenses  (sec.  71).  Information 
must  be  furnished  to  creditors  relative  to  stockholdings  on  affidavit  made  to 
the  effect  that  they  are  such  creditors  (sec.  72). 

18.  Office  and  Agent.  —  Every  domestic  corporation  must  maintain  a 
principal  office  within  the  State  and  an  agent  in  charge  thereof  (sees.  14,  16). 
The  corporate  name  of  such  corporation  must  be  printed  in  a  conspicuous  place 
on  its  principal  office  in  letters  sufficiently  large  to  be  easily  read.  Every  cor- 
poration which  shall  fail  so  to  do  for  a  period  of  thirty  days,  or  fail  to  maintain 
such  office,  or  fail  to  have  a  competent  agent  in  charge  thereof,  on  all  business 
days  of  the  year,  shall  be  subject  to  a  fine  of  not  less  than  $100  nor  more  than 
$500.  Failure  to  comply  with  this  requirement  shall  render  the  certificate  issued 
by  the  Secretary  of  State  void  (Laws  of  1907,  chap.  117). 

19.  Reports.  —  Except  in  the  case  of  mining  companies,  the  only  report 
required  is  the  filing  of  a  certificate  of  election  or  changes  in  the  governing 
board  of  the  corporation.  This  must  be  filed  within  thirty  days  thereafter  in 
the  office  of  the  Secretary  of  State,  giving  details  required  by  section  85  of  the 
Code  (filing  fee  $1).  The  penalty  for  failure  to  file  the  same  is  a  fine  of  $100 
(Laws  of  1905,  chap.  51). 

Every  corporation  owning,  claiming,  holding,  leasing,  or  engaged  in  the 
business  of  working  or  developing  any  mining  claim  or  mining  property  or  in- 
terest therein,  in  this  State,  end  selling  or  offering  for  sale,  either  directly  or 
indirectly,  any  of  its  shares  or  capital  stock,  shall,  during  the  months  of  June 
and  November  of  each  calendar  year  hereafter,  file  in  the  office  of  the  county 
recorder  of  each  county  wherein  such  mining  property  is  situated,  and  in  the 
office  of  the  Attorney-General  of  this  State,  a  statement  duly  subscribed  and 
sworn  to  before  a  notary  public  (or  other  officer  authorized  by  law  to  admin- 
ister oaths)  by  its  president  (or  vice-president)  and  its  secretary  if  it  is  a  domestic 
corporation,  and  also  by  its  resident  agent,  if  a  foreign  corporation,  which  shall 
contain  the  following  facts  and  information : 

(a)  The  name  of  each  mining  claim  and  the  total  number  of  such  claims  or 
fractions  thereof  Owned  or  leased,  and  the  number  thereof  being  worked  and 
developed,  also  the  county  and  mining  district  (if  there  be  one)  wherein  said 
claims  are  located,  and  the  nearest  post-office  and  the  distance  therefrom,  as 
near  as  can  be  ascertained. 

(6)  The  nature  of  the  title  thereof,  or  interest  therein,  whether  leasehold 
or  otherwise,  also  the  date  each  claim  or  interest  therein  was  purchased,  leased, 
or  otherwise  acquired  by  such  corporation. 

(c)  The  character,  value,  and  a  general  description  of  all  buildings,  works, 
machinery,  and  other  improvements  on  each  unpatented  claim,  and  the  char- 
acter, value,  and  a  general  description  of  all  buildings,  works,  machinery,  and 
4-22 


DIGEST   OF   INCORPORATION   ACTS.  —  NEVADA. 

other  improvements  being  actually  used  or  operated  by  such  corporation  on 
its  patented  ground,  taken  as  a  whole. 

(d)  The  total  number  of  days'  labor  employed  and  expended  in  actual  de- 
veloping the  mineral  resources  of  each  unpatented  mining  claim,  if  any,  and 
of  the  entire  patented  property,  if  any,  during  the  six  months  next  preceding, 
and  the  total  sum  of  money  or  other  valuable  consideration  given  or  paid  out 
therefor. 

(e)  The  total  number  of  shares  such  corporation  is  by  law  authorized  to 
issue,  and  the  different  classes,  and  par  value  thereof. 

(J)  The  total  number  of  shares  of  stock  originally  set  aside  by  such  cor- 
poration, if  any,  in  its  treasury  or  otherwise,  to  sell  or  otherwise  dispose  of,  for 
the  purpose  of  working,  developing,  or  otherwise  improving  any  patented  or 
unpatented  mining  claim,  or  claim,  owmed  or  leased  or  being  worked  or  de- 
veloped by  such  corporation,  and  the  total  amount  of  money  realized  from 
the  sale  of  any  portion  thereof  during  the  six  months  next  preceding. 

(g)  The  total  number  of  shares  of  treasury  stock  sold,  the  price  thereof  per 
share,  and  the  total  sum  of  money  or  other  consideration  received  therefor  during 
the  six  months  next  preceding  the  date  of  filing  of  the  statement  herein  required, 
and  the  number  of  shares  of  treasury  stock  remaining  unsold  at  said  time. 

(h)  The  amount  of  money,  if  any,  actually  paid  by  such  corporation  to 
each  of  its  officers,  superintendents,  or  to  other  persons,  exclusive  of  persons 
included  in  subdivisions  of  this  section,  as  salary  or  compensation  for  services 
rendered  such  corporation,  stating  the  nature  of  such  services;  also  the  respec- 
tive amounts,  if  any,  expended  for  advertising  and  as  commissions  for  sales 
of  stock,  during  the  six  months  next  preceding. 

(i)  The  total  amount  of  bullion  tax  paid  during  the  six  months  next 
preceding. 

The  affidavit  shall  state  that  affiant  is  the  president  (or  other  officer  of 
such  corporation  or  other  person  required  to  make  such  affidavit)  and  has 
read  the  foregoing  statement  and  knows  the  contents  thereof;  that  the  same 
is  true  and  correct  to  the  best  of  his  knowledge  and  belief. 

At  the  same  time,  or  within  ten  days  after  the  sworn  statement  prescribed 
by  section  1  of  this  act  shall  have  been  filed  with  the  county  recorder  as  in 
this  act  provided,  the  secretary  or  resident  agent,  or  one  officer  of  such  cor- 
poration required  by  this  act  to  subscribe  to  the  same,  shall  duly  mail  or  cause 
to  be  mailed  to  each  person  appearing  at  said  time  on  the  books  of  such  corpora- 
tion as  a  stockholder  therein,  a  true  typewritten  or  printed  copy  of  such  state- 
ment, and  shall  in  addition  thereto  make  an  affidavit  before  some  officer  duly 
authorized  to  administer  oaths,  that  a  true  copy  of  such  statement  has  been 
duly  deposited  in  the  United  States  post-office  (giving  the  name  of  the  post- 
office)  addressed  to  each  stockholder  of  such  corporation,  as  appears  from  the 
books  thereof,  at  his  or  her  last  known  address,  or  place  of  residence,  and  that 
sufficient  postage  has  been  prepaid  thereon,  and  thereupon  such  secretary  or 
resident  agent,  or  other  person  making  such  affidavit,  shall  file  the  same  in 
the  office  of  such  county  recorder,  who  shall  attach  the  same  to  the  original 
statement  previously  filed,  pursuant  to  section  1  of  this  act,  and  to  which  such 
affidavit  pertains.  The  county  recorder  shall  charge  as  a  filing  fee  50  cents 
for  every  original  statement  required  by  the  preceding  section,  and  50  cents 
for  filing  and  attaching  the  affidavit  required  by  this  section,  unless  the  same 
is  attached  to  said  original  statemenl  (Laws  of  1909,  p.  02.  As  to  penalty 
for  filing  false  reports  see  Laws  of  1907,  chap.  00). 

423 


DIGEST   OF   INCORPORATION   ACTS.  —  NEVADA. 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  in  this  State. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited  for  failing  within  two  years  to  organize  and  commence  in  good  faith 
the  business  of  promoting  the  objects  or  purposes  for  which  the  corporation 
was  organized  (sec.  51).  Also  for  failure  to  keep  office  and  agent,  etc.,  in  the 
State  for  ninety  days  (Laws  of  1905,  chap.  51 ;  Laws  of  1907,  chap.  117) ;  also 
for  failure  to  keep  corporate  name  conspicuously  displayed  at  said  office  (sec.  16, 
as  amended  by  Laws  of  1905,  chap.  51).  Quo  warranto  may  be  brought  by  the 
district  attorney  cf  the  county,  for  ultra  vires  acts  (C.  L.  sec.  3873). 

22.  Annual  License  Tax.  —  There  is  no  annual  license  tax. 

23.  Amendments.  —  The  incorporators  before  the  payment  of  any  part  of 
its  capital  may  record  with  the  clerk  of  the  county  in  which  its  original  cer- 
tificate of  incorporation  is  recorded,  and  file  with  the  Secretary  of  State,  an 
amended  certificate  duly  signed  by  the  incorporators  named  in  the  original 
certificate  of  incorporation  duly  acknowledged,  amending  the  original  certificate 
of  incorporation  in  whole  or  in  part  (Laws  of  1903,  chap.  88,  sec.  3).  Corpora- 
tions may  also  correct  errors  and  omissions  in  the  certificate  of  incorporation 
in  the  manner  following: 

The  board  of  directors  shall  pass  a  resolution  declaring  that  such  error  exists 
and  that  such  corporation  desires  to  correct  the  same.  A  certificate  of  such 
case  shall  be  made,  signed,  and  acknowledged  by  the  president  and  secretary 
under  the  corporate  seal.  This  certificate,  together  with  the  written  assent  in 
person  or  by  proxy  of  two-thirds  in  interest  of  all  of  the  stockholders  of  the 
corporation,  shall  be  filed  in  the  office  of  the  Secretary  of  State  (Laws  of  1903, 
chap.  88,  sec.  391). 

Corporations  may  also  change  the  nature  of  their  business,  their  corporate 
name,  increase  their  capital  stock,  change  the  par  value  of  the  shares  of  their 
capital  stock,  change  the  location  of  their  principal  office  in  the  State,  change  the 
number  of  their  directors  or  trustees,  create  one  or  more  classes  of  stock,  and 
make  such  other  amendments  as  may  be  desired,  in  the  manner  following :  The 
board  of  directors  shall  pass  a  resolution  declaring  that  such  change  or  altera- 
tion is  advisable,  and  calling  a  meeting  of  the  stockholders  to  take  action  thereon. 
The  meeting  shall  also  be  held  on  such  notice  as  the  by-laws  provide,  and  in 
the  absence  of  such  provision  upon  ten  days'  notice  given  personally  or  by 
mail;  if  two-thirds  in  interest  in  each  class  of  the  stockholders  having  voting 
powers  and  all  other  persons  having  like  powers  shall  vote  in  favor  of  such 
amendment,  change,  or  alteration,  a  certificate  thereof  shall  be  signed  by  the 
president  and  secretary  under  the  corporate  seal,  acknowledged  or  proved  as 
in  the  case  of  deeds  of  real  estate,  and  such  certificate,  together  with  the  written 
assent  in  person  or  by  proxy  of  two-thirds  in  interest  of  each  class  of  said 
stockholders  and  creditors  having  voting  powers,  shall  be  filed  in  the  office 
of  the  Secretary  of  State,  and  upon  the  filing  of  the  same,  and  filing  a  certified 
copy  of  the  said  certificate  of  amendment  with  the  county  clerk  of  the  county 
where  the  corporation  has  its  principal  place  of  business,  the  certificate  or 
articles  of  incorporation  shall  be  deemed  to  be  amended  accordingly 
(sees.  40-41;  Laws  of  1909,  p.  198). 

The  decrease  of  capital  stock  may  be  effected  by  the  retiring  or  reducing 
of  any  class  of  stock,  or  by  drawing  the  necessary  number  of  shares  by  lot  for 
retirement,  or  by  the  surrender  of  each  shareholder  of  his  shares  and  the  issu- 
ing to  him  in  lieu  thereof  of  a  decreased  number  of  shares,  or  by  the  purchase 
at  not  above  par  of  certain  shares  for  retirement  or  by  retiring  shares  owned 

424 


DIGEST   OF   INCORPORATION'   ACTS.  —  NEVADA. 

by  the  corporation  or  by  reducing  the  par  value  of  shares ;  and  when  any  cor- 
poration shall  decrease  the  amount  of  its  capital  stock  hereinbefore  provided 
by  amendment  pursuant  to  this  or  the  two  preceding  sections,  the  certificate 
decreasing  the  same  shall  be  published  for  three  weeks  consecutively  at  least 
once  in  each  week  in  a  newspaper  published  in  the  county  in  which  the  prin- 
cipal office  of  the  corporation  is  located,  the  first  publication  to  be  made  within 
fifteen  days  after  the  fifing  of  said  certificate  (sec.  42.  See  as  to  removal  of 
place  of  business  without  amendment,  sec.  69). 

24.  Extension  of  Corporate  Existence.  —  Charters  may  be  renewed,  if 
desired  (sees.  107,  108). 

25.  Dissolution.  —  The  charter  may  be  surrendered  by  the  incorporators 
before  organization,  if  desired  (sec.  88).  By  resolution  of  a  board  of  directors 
a  meeting  of  the  stockholders  may  be  called  to  vote  upon  the  question  of  dis- 
solution. Two-tliirds  in  interest  of  the  stockholders  or  creditors  entitled  to 
vote  are  required  to  bring  about  a  voluntary  dissolution;  it  may  be  effected 
by  written  consent  of  nine-tenths  interest  of  secured  creditors  entitled  to  vote 
with  stockholders  without  a  meeting  (sec.  89).  Voluntary  dissolutions  or 
receiverships  are  provided  for  by  statute  (sees.  93-98). 

26.  Foreign  Corporations.  —  Every  foreign  corporation  must  file  in  the 
office  of  the  Secretary  of  State  a  certified  copy  of  its  articles  of  incorporation 
or  of  the  statute  or  statutes  or  other  instrument  of  authority  by  which  it  was 
created,  and  a  certified  copy  thereof  duly  certified  by  the  Secretary  of  State  in 
the  office  of  the  county  clerk  of  the  county  where  its  principal  place  of  busi- 
ness in  this  State  is  located,  and  shall  pay  to  the  Secretary  of  State  the  same 
fee  therefor  as  is  paid  by  corporation  under  the  laws  of  this  State  (Laws  of 
1907,  p.  190). 

Foreign  corporations  either  doing  business  or  owning  property  in  the  State 
shall  by  an  authenticated  certificate  filed  with  the  Secretary  of  State  appoint 
an  agent  in  the  State  upon  whom  legal  process  may  be  served  (sec.  899). 

Every  foreign  corporation  who  shall  fail  or  neglect  to  comply  with  the 
provisions  of  the  act  shall  be  subject  to  a  fine  of  not  less  than  $500  to  be  recov- 
ered in  a  court  of  competent  jurisdiction,  and  shall  not  be  allowed  to  com- 
mence, maintain,  or  defend  any  action  or  proceeding  in  any  court  of  this  State 
until  it  shall  have  fully  complied  with  the  provisions  of  this  act,  and  any  person 
or  persons  who  shall  act  as  agent  within  this  State  of  any  such  corporation  who 
shall  fail  for  a  period  of  ten  days  after  the  taking  effect  of  this  act  to  comply 
with  the  provisions  herein,  shall  be  personally  and  individually  liable  to  a  fine 
of  not  less  than  3500.  It  is  hereby  made  the  duty  of  the  Secretary  of  Stale, 
as  he  may  be  advised  that  such  corporation  is  doing  business  in  contravention 
of  this  act,  to  report  it  to  the  governor,  who  shall  instruct  the  district  attorney 
of  the  county  wherein  such  corporation  has  its  principal  office  or  place  of  busi- 
ness, or  the  Attorney-General  of  the  State,  or  both,  as  soon  as  practicable  to 
institute  proceedings  to  recover  the  fine  or  fines  provided  for  in  this  action 
(Laws  of  1907,  chap.  89). 


425 


DIGEST    OF    INCORPORATION    ACTS. NEW    HAMPSHIRE. 


NEW   HAMPSHIRE. 

(References  below  are  to  Public  Statutes  of  New  Hampshire,  1891,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  New  Hampshire  is  to  be  found  in  the  Public 
Statutes  of  New  Hampshire,  1891,  chap.  147,  and  Laws  of  1895,  chaps.  1  and  2. 
Under  this  act  corporations  may  be  formed  for  the  purpose  of  carrying  on  any 
lawful  business,  excepting  banking  and  life  insurance,  and  the  making  of  con- 
tracts for  the  payment  of  money  at  a  fixed  date  or  upon  the  happening  of 
some  contingency  and  the  construction  and  maintenance  of  railroads  and 
trading  stamp  corporations,  or  of  companies  engaged  in  the  business  of  issuing, 
selling,  or  redeeming  trading  stamps,  coupons,  tickets,  or  other  similar  devices 
(Laws  of  1905,  chap.  70). 

2.  Incorporators.  —  There  must  be  five  or  more  incorporators  of  lawful 
age.     There  are  no  residential  requirements  (chap.  147,  sec.  1). 

3.  Contents  of  Articles  of  Association. — The  articles  must  set  forth : 
a.   Name.  —  Similarity  of  names  is  forbidden  (chap.  147,  sees.  2,  3). 

o.  Purposes.  ; —  Object  for  which  the  corporation  is  formed.  State  officials 
construe  this  to  authorize  incorporation  for  any  number  of  purposes  not  pro- 
vided for  by  special  act  (chap.  147,  sec.  2  and  chap.  148,  sec.  2). 

c.  Domiciliary  Office.  —  Location  of  principal  place  of  business  (chap.  147, 
sec.  2). 

d.  Officers.  —  If  desired,  statement  may  be  made  as  to  what  officers  of  the 
corporation  are  to  be  provided  for  in  the  by-laws  (chap.  149,  sec.  4). 

e.  Capital  Stock.  —  Amount  thereof.  Capitalization  shall  not  be  less  than 
$1,000  or  more  than  $5,000,000.  Par  value  not  less  than  $25  nor  more  than  $500 
(Laws  of  1907,  chap.  129 ;  chap.  147,  sec.  6). 

/.  Meeting  of  Incorporators.  —  Date  and  place  of  organization  meeting  and 
waiver  of  notice  thereof  (chap.  148,  sec.  4). 

g.  Incorporators.  —  Names  and  post-office  addresses  of  the  incorporators 
(chap.  147,  sec.  2). 

The  duration  of  corporate  existence  is  unlimited,  unless  a  limited  term  is 
specially  used  (chap.  148,  sec.  3). 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of 
common  law  powers,  the  act  authorizes  stockholders  to  vote  by  proxy,  and 
provides  for  the  forfeiture  of  stock  to  the  corporation  of  enough  at  published 
sale  to  pay  up  on  whole  for  non-payment  of  assessments.  No  one  can  vote  on 
more  than  one-eighth  the  whole  capital ;  a  stockholder  can  hold  proxies  to  that 
extent  except  in  railroad  corporations  (chap.  148,  sees.  1-9  inclusive;  chap. 
149,  sees.  22,  23,  25,  26;  Laws  of  1901,  chap.  68;  Laws  of  1905,  chaps.  61, 
111). 

5.  Procuring  the  Charter.  —  Articles  must  be  recorded  in  the  office  of  the 
clerk  of  the  town  in  which  the  business  of  the  corporation  is  to  be  carried  on, 
and  also  in  the  office  of  the  Secretary  of  State.  The  charter  fee,  if  any,  must 
be  paid  to  the  State  Treasurer  at  the  time  articles  are  filed  (chap.  147,  sec.  4). 

6.  Corporate  Indebtedness.  —  Debts  cannot  be  contracted  exceeding 
one-half  of  the  value  of  the  corporate  property  (chap.  150,  sec.  4). 

C.  R.  S.  Bank  v.  Fiske,  62  N.  H.  78,  180. 
426 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    HAMPSHIRE. 

7.  Organization  Tax.  —  Corporations  formed  to  carry  on  business  without 
the  State  pay  the  State  Treasurer  the  following  fees:  If  capitalization  does  not 
exceed  $25,000,  $10 ;  from  S25,000  to  $100,000,  $25 ;  from  $100,000  to  $500,000, 
$50;  from  $500,000  to  $1,000,000,  S 100;  over  $1,000,000,  $200.  Corporations 
formed  by  special  act  of  the  legislature,  $50  (chap.  14,  sees.  5,  6 ;  Laws  of  1S95, 
chap.  18,  sec.  1).  Corporations  formed  to  carry  on  business  and  having  their 
principal  office  within  the  State,  when  incorporated  by  special  act  of  the  legis- 
lature, must  pay  to  the  State  Treasurer  a  fee  of  $50  (chap.  14,  sec.  6). 

8.  Filing  and  Recording  Fees. — The  Secretary  of  State  is  entitled  to 
fees  for  recording  articles  which  average  about  $1.50.  Usually  this  fee  does 
not  exceed  $1.50,  unless  the  articles  are  very  long.  For  certified  copy  of  articles 
the  charge  is  25  cents  per  page  for  typewriting  and  50  cents  for  the  certificate. 
The  charge  for  recording  articles  of  incorporation  in  city  or  town  clerk's  office 
does  not  exceed  $1.50,  and  is  often  much  less. 

9.  Commencing  Business. — Corporations  may  commence  business  as 
eoon  as  the  charter  is  filed  as  required  by  law  and  the  organization  perfected. 
Business  must  be  commenced  within  three  years  from  the  date  of  incorpora- 
tion (chap.  147,  sec.  4 ;  chap.  149,  sec.  2). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  State.  This  in  the  absence  of  any  statute  expressly  authorizing 
such  meeting  to  be  held  without  the  State.     (See  chap.  148,  sees.  4,  5.) 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  within  the  State.  Directors'  meetings  may  be  held  without  the 
State  if  the  by-laws  so  provide.  There  is  no  statute  authorizing  the  holding 
of  stockholders'  meetings  without  the  State,  and  at  stockholders'  meetings 
each  stockholder  may  give  one  vote  for  each  share  he  owns  or  has  proxies 
for  therein,  not  exceeding  one-eighth  part  of  the  whole  number  of  shares  (chap. 
149,  sec.  9 ;  Laws  of  1905,  chap.  68). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  at  least  three  directors,  one  of  whom  must  be  a  resident  of  the 
State,  provided  the  corporation  has  any  stockholders  within  the  State  (chap.  149, 
sec.  4). 

b.  Liabilities.  —  Directors  are  liable  for  improper  loans  to  the  stockholders, 
for  the  declaration  of  illegal  dividends,  or  for  permitting  contraction  of  cor- 
porate indebtedness  beyond  the  amount  limited  by  law.  The  directors  and 
treasurer  must,  within  tliirty  days  after  the  whole  amount  of  capital  stock 
has  been  paid  in,  make,  subscribe,  and  file  in  the  office  of  the  clerk  of  the  town 
where  the  corporation  has  its  principal  place  of  business  a  certificate  to  that 
effect,  under  penalty  of  being  liable  for  all  the  debts  of  the  company  contracted 
after  the  expiration  of  said  tliirty  days  and  before  said  certificate  shall  be  so 
made  and  filed ;  they  are  also  liable  for  all  debts  of  the  company  contracted 
while  they  are  in  office,  if  false  certificates,  returns,  or  notices  arc  made  by  them 
(chap.  150,  sees.  2-6,  14,  19).  Directors  are  also  individually  liable  for  all  debts 
of  the  corporation  until  the  annual  report  is  made  as  required  by  law  (chap.  150, 
sec.  16). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent 
of  their  unpaid  stock  subscriptions.  Stockholders  receiving  unlawful  refund 
from  the  capital  stock,  or  knowingly  receiving  illegal  dividends,  are  individ- 
ually liable  to  the  amount  of  such  loan,  for  debts  of  the  corporation  then  ex- 
isting or  afterwards  contracted,  until  the  same  is  refunded  or  paid  to  the  creditors 
of  the  corporation.    They  are  also  liable  as  partners  if  the  charter  is  void  (chap. 

427 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    HAMPSHIRE. 

150,  sec.  7 ;  chap.  14,  sec.  9).  Stockholders  are  liable  for  all  debts  and  contracts 
of  the  corporation  until  the  whole  amount  of  capital  shall  have  been  paid  in, 
and  a  certificate  thereof,  signed  by  the  treasurer  and  a  majority  of  the  directors, 
has  been  filed  and  recorded  with  the  clerk  of  the  city  or  town  where  such  corpora- 
tion has  its  principal  place  of  business.  No  note  or  obligation  given  by  a  stock- 
holder shall  be  considered  as  payment  of  any  part  of  the  capital  stock  (chap.  150, 
sees.  8,  9). 

Swan  v.  Burnham,  70  N.  H.  580;  49  Atl.  93;  March  v.  Eastern  R.  R.,  43  N.  H.  516; 
Smith  v  Bank  of  New  England,  69  N.  H.  254;  45  Atl.  1082;  Lancaster  Starch  Co.  v.  Moore, 
62  N.  H.  671. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  have  a  certificate 
issued  to  him,  signed  by  the  treasurer  or  cashier  and  such  other  officer  as  the 
by-laws  may  prescribe.  No  certificate  can  be  issued  until  the  par  value  of  the 
shares  mentioned  in  it  has  been  fully  paid  to  the  corporation.  The  par  value 
of  the  shares  must  not  be  less  than  $25  nor  more  than  $500  (chap.  149,  sees.  5,  10). 

15.  Preferred  Stock.  —  Preferred  stock  is  authorized  (chap.  149,  sec.  8). 

16.  Payment  of  Capital  Stock.  —  Stock  must  be  paid  for  in  money  or 
money's  worth.  The  statute  forbids  the  payment  of  capital  stock  by  promis- 
sory note.  The  statute  also  provides  that  no  shares  shall  be  sold  at  less  than 
par  (chap.  149,  sec.  9;  chap.  150,  sec.  9).  No  certificate  can  be  issued  until 
the  par  value  of  the  shares  mentioned  in  it  has  been  fully  paid  (chap.  149, 
sec.  10;  see  also  chap.  150,  sees.  10,  11). 

Libby  v.  Company,  68  N.  H.  444;  44  Atl.  602;  Lincott  et  al.  v.  Company,  68  N.  H.  260; 
44  Atl.  392;  Kimball  a  Company,  69  N.  H.  485;   45  Atl.  253. 

17.  Books.  —  Records  of  the  proceedings  of  stockholders  and  directors, 
and  all  papers,  must  be  recorded  in  the  office  of  the  clerk  of  the  corporation 
in  the  State  (chap.  148,  sees.  10,  11).  Books  of  account,  names  and  residences, 
number  of  shares  owned  by  each  stockholder,  shall  also  be  kept  with  the  officer 
authorized  to  issue  stock  certificates.  All  records,  accounts,  and  papers  are 
open  to  inspection  of  stockholders  (chap.  148,  sec.  12). 

18.  Office  and  Agent.  —  Every  corporation  must  maintain  an  office 
within  the  State,  and  a  clerk  therein  to  receive  process,  who  shall  keep  the 
records  of  the  company  (Pub.  Stat.,  chap.  148,  sees.  10-12). 

19.  Reports.  —  Corporations,  excepting  insurance,  railroad,  bank,  and 
loan  and  building  associations,  shall  annually  on  or  before  March  1st  make  a 
report  to  the  Secretary  of  State,  and  to  the  clerk  of  the  town  in  which  the  prin- 
cipal business  is  carried  on,  stating  amount  of  assessments  voted  and  paid  in; 
amount  of  debts  due  to  and  from  the  corporation,  and  value  of  all  property  and 
assets  of  the  corporation  on  the  1st  day  of  January.  Non-compliance  makes  the 
treasurer  and  directors  individually  liable  for  all  debts  and  contracts  (Laws  of 
1911,  chap.  159). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute.  But  see  Con- 
stitution, Art.  LXXXII.,  reading  as  follows:  "The  General  Court  is  author- 
ized and  directed  to  pass  such  laws  as  will  most  effectually  prevent  monopoly, 
the  stifling  of  competition,  the  artificial  raising  of  prices  and  unfair  methods 
of  trade;  to  control  and  regulate  the  acts  of  all  corporations  doing  business 
within  the  State,  and  to  prevent  their  encroachments  upon  the  liberties  of  the 
people." 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  declared  void  for  failure  to  pay  the  fees  required  by  law  or  for  falsely  pre- 
tending that  the  corporation  is  to  carry  on  its  business  and  have  its  principal 

428 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    HAMPSHIRE. 

office  within  the  State  for  the  purpose  of  avoiding  the  payment  of  the  charter 
fee  required  by  law.    (See  chap.  14,  sees.  8-10;   Laws  of  1S92,  p.  319.) 
State  v.  Baron,  58  N.  H.  370;    Parsons  v.  Eureka  Powder  Works,  48  N.  H.  66. 

22.  Amendments.  —  Corporations  may  change  their  name,  increase  or 
decrease  their  capital  stock,  or  amend  their  articles  of  association  in  any  other 
respect,  by  a  majority  vote  of  such  corporation,  at  a  meeting  duly  called  for 
that  purpose,  by  recording  a  certified  copy  of  such  vote  in  the  office  of  the 
Secretary  of  State,  and  in  the  office  of  the  clerk  of  the  town  or  city  wherein 
its  principal  place  of  business  is  located  (chap.  147,  sec.  4;  Laws  of  1S95, 
chap.  1,  sec.  2;  Laws  of  1897,  chap.  49). 

23.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for  the 
extension  of  corporate  existence. 

24.  Dissolution.  —  Stockholders  owning  one-fourth  of  the  stock  may 
petition  in  the  Superior  Court  for  dissolution.  (See  P.  B.,  chap.  147,  sees.  10- 
12;  see  also  chap.  148,  sec.  18.) 

School  District  v.  Greenfield,  64  N.  H.  84;  6  Atl.  484. 

25.  Annual  License  Fee.  —  There  is  no  annual  license  fee. 

26.  Foreign  Corporations.  —  No  special  requirements  exacted  to  carry 
on  business,  except  trading  stamp  companies  (Laws  of  1905,  chap.  83). 
They  need  not  declare  the  name  of  their  agent,  except  foreign  insurance  com- 
panies, who  must  appoint  an  insurance  commission  agent  to  receive  service 
(chap.  169,  sec.  4).  May  maintain  a  suit  in  the  State.  Foreign  corporations 
doing  business  in  the  State  must  file  with  the  State  Librarian  on  or  before 
January  1st  of  each  year  all  printed  reports  of  their  condition  issued  by  them 
during  the  twelve  months  preceding  (Laws  of  1895,  chap.  3 ;  chap.  148,  sec.  20 ; 
see  chap.  148,  sec.  21).  Foreign  manufacturing  companies  doing  business  in 
the  State  must  make  annual  May  returns,  same  as  domestic  corporations. 

Lumbard  v.  Aldrich,  8  N.  H.  31. 


429 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW   JERSEY. 


NEW   JERSEY. 

(The  references  cited  below  are  to  Laws  of  1896,  chap.  185,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  is  to  be  found  in  chap.  185,  Laws  of  1896,  and 
amendments  thereto  made  annually  since  that  time.  Special  acts  are  provided 
for  the  incorporation  of  savings  banks,  building  and  loan  associations,  surety, 
railway,  telegraph,  telephone,  canal,  turnpike,  banking,  safe  deposit,  and  trust 
companies.  The  statute,  however,  provides  that  corporations  may  incorporate 
under  the  General  Act  for  the  purpose  of  constructing,  maintaining,  and  operat- 
ing railroads,  telegraph  and  telephone  companies  outside  of  the  State  (Laws  of 
1907,  sec.  12). 

2.  Incorporators.  —  Three  or  more  persons.      There  are  no  residential 

requirements  (sec.  6). 

C.  R.  R.  v.  P.  R.  R.  Co.,  31  N.  J.  Eq.  475;  Coddington  v.  Exrs.  of  Havens,  8  N.  J.  Eq. 
590. 

3.  Contents  of  the  Certificate  of  Incorporation  (sec.  8).  —  The  certifi- 
cate must  set  forth: 

a.  Name.  —  No  name  can  be  used  already  in  use  by  any  existing  corpora- 
tion of  the  State,  or  so  nearly  similar  thereto  as  to  lead  to  uncertainty  or  con- 
fusion. It  must  be  in  the  English  language  (sec.  8 ;  Laws  of  1897,  chap.  274 ; 
Laws  of  1903,  chap.  149).  The  name  insurance,  safe  deposit,  trust  company, 
or  bank  cannot  form  part  of  the  name  (Laws  of  1897,  p.  274). 

G.  S.  R.  Co.  v.  Company,  22  N.  J.  L.  J.  (May,  1899),  p.  147;  Peck  Bros.  &  Co.  v.  Com- 
pany, 51  C.  C.  A.  251. 

b.  Domicile.  —  The  location  of  the  principal  office  in  the  State ;  street  and 
number  must  be  given  if  located  in  a  city  (sec.  8) ;  also  the  name  of  the  agent 
in  charge  thereof  and  upon  whom  process  may  be  served  (Laws  of  1898,  p.  410). 

Nicholson  v.  Company,  110  Fed.  705. 

c.  Purposes.  —  Any  number  of  objects  may  be  inserted,  provided  they  are 
not  covered  by  the  special  acts  above  referred  to  (sec.  8;  Laws  of  1907, 
chap.   12). 

Stewart  v.  Company,  12  N.  J.  L.  J.  110. 

d.  Capital  Stock.  —  Amount  of  total  authorized  capital  stock  (not  less  than 
$2,000),  the  number  of  shares  into  which  the  same  is  divided,  and  the  par 
value  of  each  share  (par  value  may  be  any  amount).  The  amount  of  capital 
with  which  the  corporation  will  begin  business,  which  cannot  be  less  than 
$1,000.  If  there  be  more  than  one  class  of  stock,  a  description  of  the  different 
classes,  with  the  terms  on  which  the  different  classes  are  created,  must  be  set 
forth  (sees.  8,  18). 

e.  Duration.  —  May  be  unlimited,  if  desired  (sec.  8). 

/.  Provisions  for  the  Regulation  of  the  Internal  Affairs  of  the  Corporation.  — 
If  desired,  provisions  may  be  inserted  for  the  regulation  of  the  business  and 
for  the  conduct  of  the  affairs  of  the  corporation  as  well  as  for  creating  and 
defining  and  limiting  or  regulating  the  powers  of  the  corporation,  the  directors, 
and  the  stockholders  or  any  class  of  stockholders  (sees.  8,  11,  12,  17,  34,  47) 

430 


DIGEST    OF   INCORPORATION   ACTS.  —  NEW   JERSEY. 

The  provisions  which  are  hereby  specifically  authorized  by  statute  are  the  fol- 
lowing :  Clauses  empowering  directors  to  make  and  alter  by-laws  (sec.  11); 
classifying  directors  (sec.  12) ;  giving  to  any  class  of  stock  the  sole  right  to 
choose  directors  of  some  specified  class  (sec.  12) ;  clause  regulating  the  manner 
of  calling  and  conducting  meetings  (sec.  17) ;  clauses  relating  to  the  voting 
power  of  stock,  such  as  providing  for  cumulative  voting  in  the  election  of  direc- 
tors, or  granting  or  taking  away  from  preferred  stockholders  the  right  to  vote  in 
the  election  of  directors  (Laws  of  1900,  chap.  172) ;  clause  fixing  the  number 
of  shares  or  amount  of  stock  in  interest  (not  more  than  a  majority)  necessary  to 
constitute  a  quorum  at  a  stockholders'  meeting;  clause  providing  that  any 
action  which  now  requires  the  consent  of  holders  of  two-thirds  of  the  entire 
stock  at  any  meeting  after  notice  to  them  given,  or  requires  their  consent  in 
writing  to  be  filed,  may  be  taken  upon  the  consent  of,  and  the  consent  given 
and  filed  by,  the  holders  of  two-thirds  of  the  stock  of  each  class  represented  at 
said  meeting  in  person  or  by  proxy  (sec.  170,  as  amended  by  Laws  of  1901, 
chap.  119);  clause  giving  power  to  directors  to  fix  the  amount  to  be  reserved 
from  profits  for  the  payment  of  dividends  (sec.  47);  clause  giving  power  to 
directors  to  meet  without  the  State  (sec.  44). 

g.  Incorporators.  —  Names  and  post-office  addresses  of  the  incorporators 
and  the  number  of  shares  subscribed  for  by  each.  The  aggregate  amount  of 
stock  subscriptions  must  be  equal  to  the  amount  of  stock  with  which  the  cor- 
poration will  commence  business,  which  renders  stock  subscriptions  necessary 
to  the  amount  of  $1,000  (sec.  8;  Laws  of  1898,  p.  410). 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of 
common  law  powers,  the  statute  confers  the  following  additional  powers :  To 
conduct  business  in  other  States  and  foreign  countries;  to  have  one  or  more 
offices  out  of  the  State ;  to  hold,  purchase,  mortgage,  and  convey  real  and  per- 
sonal property  out  of  the  State.  Corporations  for  the  construction  of  railroads, 
water,  gas,  or  electric  works,  canals,  tunnels,  bridges,  viaducts,  hotels,  wharves, 
piers,  etc.,  may  subscribe  for,  pay  for,  hold,  use,  and  dispose  of  stock  or  bonds 
in  any  corporation  for  the  purpose  of  constructing,  maintaining,  and  operating 
works  of  a  similar  character,  and  the  directors  of  such  corporations  may  accept 
in  payment  of  stock  subscriptions  real  or  personal  property  necessary  for  the 
purposes  of  such  corporation,  or  work,  labor,  and  services  performed  or  mate- 
rials furnished  to  or  for  such  corporation,  to  the  amount  of  the  value  thereof, 
and  issue  full-paid  stock  in  payment  thereof.  All  classes  of  corporations  which 
may  be  incorporated  under  the  General  Act  are  given  express  power  to  pur- 
chase, hold,  sell,  assign,  transfer,  mortgage,  pledge,  or  otherwise  dispose  of  the 
shares  of  the  capital  stock  or  any  bonds,  securities,  or  evidences  of  indebted- 
ness created  by  any  corporation  of  New  Jersey  or  any  other  State,  and  while 
the  owner  of  such  stock  to  exercise  all  the  rights,  powers,  and  privileges  of 
ownership,  including  the  right  to  vote  thereon.  Other  enumerated  powers  are 
the  right  to  vote  by  proxy,  to  issue  preferred  stock,  to  lease  its  property  and 
franchises  to  another  corporation,  to  extend  the  corporate  existence,  to  consoli- 
date with  other  corporations,  to  dissolve  itself,  to  enforce  a  lien  upon  the  stock 
of  its  members  for  debts  due  the  corporation,  to  sell  stock  subscribed  for  for 
non-payment  of  stock  subscriptions,  and  to  provide  for  cumulative  voting  in 
the  election  of  directors.  Power  to  adopt  by-laws  may  be  delegated  to  the 
directors  by  inserting  a  clause  to  that  effect  in  the  charter.  Directors  may 
also  be  given  power  to  fix  amount  of  prohts  to  be  reserved  as  working  capital. 
A  corporation  may  acquire  and  hold  its  own  shares  (sees.  1-3,  7,  11,  17,  18,  29, 

431 


DIGEST    OF    INCORPORATION   ACTS. — NEW   JERSEY. 

34,  36,  38,  48,  49,  51,  104,  105 ;    Laws  of  1899,  p.  334 ;   Laws  of  1900,  p.  418 ; 
Laws  of  1902,  p.  217;    Laws  of  1905,  chap.  263). 

Hilles  v.  Parrish,  14  N.  J.  Eq.  380;  M.  T.  &  T.  Co.  v.  D.  T.  &  T.  Co.,  44  N.  J.  Eq.  568; 
14  Atl.  907;  Berger  v.  U.  S.  Steel  Corporation,  63  N.  J.  Eq.  809;  53  Atl.  68;  State  v.  Mans- 
field, 23  N.  J.  L.  510;  Ellerman  v.  Company,  49  N.  J.  Eq.  217;  State  R.  R.  Co.  v.  Hancock, 
35  N.  J.  L.  537;  State  v.  Roklffs,  19  Atl.  Rep.  1099;  C.  S.  Co.  v.  Company  (N.  J.),  55  Atl. 
876. 

5.  Procuring  the  Charter. — The  certificate  of  incorporation  must  be 
proved  or  acknowledged  as  required  for  deeds  of  real  estate.  If  acknowledged 
without  the  State,  the  officer  taking  the  acknowledgment  must  procure  a 
county  clerk's  certificate  of  his  appointment.  The  certificate,  together  with 
two  copies  thereof,  should  be  taken  to  the  office  of  the  clerk  of  the  county 
wherein  the  principal  office  of  the  corporation  within  the  State  is  to  be  estab- 
lished. The  clerk  will  then  keep  one  of  the  copies  for  the  purpose  of  recording 
the  same,  and  will  endorse  upon  the  original  and  the  other  copy,  certificates 
that  they  have  been  filed  in  his  office.  Then  the  original  is  filed  in  the  office  of 
the  Secretary  of  State,  and  a  duplicate  copy  with  the  county  clerk's  certificate 
endorsed  thereon  can  be  used  by  the  Secretary  of  State  for  the  purpose  of  fur- 
nishing the  incorporators  with  a  certified  copy  of  the  certificate  of  incorporation 
(sees.  8,  9). 

E.  G.  L.  Co.  v.  Green,  49  N.  J.  Eq.  329;  24  Atl.  560;  Stockton  v.  Company,  55  N.  J. 
Eq.  352. 

6.  Corporate  Indebtedness.  — There  is  no  statutory  limitation  upon  the 
amount  of  indebtedness  which  a  corporation  may  incur. 

7.  Organization  Tax.  —  Twenty  cents  for  each  thousand  dollars  of  capital 
stock  authorized,  but  never  less  than  $25. 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State  for  recording 
the  certificate  of  incorporation,  10  cents  per  folio,  with  a  minimum  charge  of 
$1.  For  issuing  certified  copy  of  the  certificate  of  incorporation,  where  same 
is  furnished  for  that  purpose,  $1.  For  fifing  report  of  officers  and  directors, 
$1.  Fee  to  county  clerk  for  recording  certificate  of  incorporation,  25  cents  per 
folio  of  one  hundred  words  (Laws  of  1904,  chap.  148). 

9.  Commencing  Business.  —  Before  any  corporation  can  begin  business, 
at  least  $1,000  of  capital  stock  must  be  subscribed,  and  before  it  can  incur  debts 
the  said  $1,000  shall,  within  the  discretion  of  the  board  of  directors,  be  paid  in 
either  money  or  property.  The  law  requires  the  president  and  secretary  or 
treasurer,  upon  payment  of  each  instalment  of  capital  stock,  or  every  increase 
thereof,  to  file  in  the  Secretary  of  State's  office  within  ten  days  thereafter  a  cer- 
tificate stating  the  amount  paid  in  in  cash  or  in  property,  and  the  amount  pre- 
viously paid.  There  is  no  penalty  attached  for  failure  to  comply  with  this 
provision,  but  officers  neglecting  or  refusing  to  do  so,  for  a  period  of  thirty  days 
after  written  request  served  on  them  by  any  stockholder,  shall  be  jointly  and 
severally  liable  for  all  debts  contracted  before  said  filing  (sees.  25,  26).  The  act 
provides  that  a  certificate  of  election  of  directors  and  officers  must  be  filed  in 
the  office  of  the  Secretary  of  State  within  thirty  days  from  the  election  (sec.  43 ; 
see  post,  sec.  19). 

Stout  v.  Zulick,  48  N.  J.  L.  599. 

10.  Organization  Meeting.  —  Must  be  held  within  the  State.  The  law 
provides  that  where  one  or  more  of  the  incorporators  shall  die  before  the  cor- 
poration is  organized,  the  survivors  may  in  writing  designate  other  persons 
who  may  take  the  place  of  the  deceased  incorporators  in  the  organization  (sec. 

432 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    JERSEY. 

115).  The  first  meeting  of  every  corporation  shall  be  called  by  a  notice 
signed  by  a  majority  of  the  incorporators,  designating  the  time,  place,  and 
purpose  of  the  meeting,  which  notice  shall  be  published  at  least  two  weeks 
before  the  meeting  in  some  newspaper  of  the  county  where  the  corporation  is 
established ;  or  said  first  meeting  may  be  called  without  publication  if  two 
days'  notice  be  personally  served  on  all  the  incorporators;  or  if  all  the  in- 
corporators shall,  in  writing,  waive  notice  and  fix  a  time  and  place  of  meeting, 
no  notice  or  publication  shall  be  required. 
Babbitt  v.  Company,  1  Stew.  Dig.  p.  208,  §  13. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  within  the  State  at  the  registered  office.  Directors'  meetings  may 
be  held  without  the  State,  if  the  by-laws  so  provide  (sec.  44). 

Elkins  v.  Company,  36  N.  J.  Eq.  467;  In  re  Election  of  St.  L.  S.  Co.,  44  N.  J.  L.  529; 
Chapman  v.  Bates,  61  N.  J.  Eq.  658;  C.  &  A.  R.  R.  Co.  v.  Elkins,  37  N.  J.  Eq.  273;  Loewen- 
thal  v.  Company,  52  N.  J.  Eq.  440;  Schwarzwalder  v.  Tegen,  58  N.  J.  Eq.  319;  Kreissel  v. 
Distilling  Co.,  47  Atl.  Rep.  471. 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualifications. — The 
minimum  number  of  directors  in  New  Jersey  is  three,  one  of  whom  must  be  a 
resident  of  the  State.  All  directors  must  be  stockholders,  the  number  of  shares 
to  be  fixed  by  the  charter  or  by  the  by-laws.  They  may  be  classified,  if  desired. 
Cumulative  voting  may  be  provided  for  in  the  certificate  of  incorporation,  if 
desired  (sees.  12,  36,  39;  Laws  of  1900,  p.  418).  An  executive  committee  may 
be  provided  for  by  inserting  provision  therefor  in  the  certificate  of  incorpora- 
tion (sec.  3,  sub.  7).  The  power  to  make  by-laws  may  be  delegated  to  the 
board  of  directors  (sec.  11). 

Collier  v.  Company  (N.  J.),  57  Atl.  417. 

b.  Liabilities.  —  The  directors  are  jointly  and  severally  liable  for  paying 
dividends  out  of  capital  or  for  reducing  the  same.  They  are  also  liable  for  not 
making  and  publishing  notice  of  decrease  of  capital;  for  failing  to  display 
name  of  the  company  at  the  principal  office,  and  for  failure  to  allow  inspection 
of  books  or  to  furnish  a  list  of  stockholders  at  elections ;  also  for  failure  to  file 
certificate  of  payment  of  capital  stock  within  thirty  days  of  written  notice  so 
to  do.  They  are  also  liable  for  making  loans  to  stockholders  (sees.  25,  26,  32, 
33,  45,  48;  Laws  of  1898,  p.  410;  Laws  of  1903,  p.  362;  Laws  of  1904,  chap. 
143).  They  are  also  liable  for  making  false  reports,  and  for  other  breaches  of 
trust  (sees.  30,  33).  Absent  or  dissenting  directors  may  relieve  themselves  from 
liability  by  entering  their  dissent  in  the  corporate  minutes  at  the  time  or  when 
they  have  notice  of  any  such  unlawful  act  on  the  part  of  other  members  of  the 
board,  such  entry  to  be  followed  by  publication  of  a  true  copy  of  dissent  within 
two  weeks  thereafter  in  a  newspaper  of  the  county  in  which  the  principal  office 
of  the  corporation  is  located  (sec.  30).  They  are  jointly  and  severally  liable 
to  a  fine  of  $200  for  failure  to  display  the  name  of  the  corporation  at  the  princi- 
pal office  (sec.  45).  Officers  are  liable  for  making  certificates  or  publications 
materially  false  (sees.  32,  52).  (1)  Any  person  who  shall  knowingly  make  or 
cause  to  be  made,  either  directly  or  indirectly  or  through  any  agency  whatso- 
ever, any  false  statement  in  writing,  with  the  intent  that  it  shall  be  relied  upon, 
respecting  the  financial  condition,  or  means  or  ability  to  pay,  of  himself,  or  any 
other  person,  firm  or  corporation,  in  whom  he  is  interested,  or  for  whom  he  is 
acting,  for  the  purpose  of  procuring  in  any  form  whatsoever,  either  the  delivery 
of  personal  property,  the  payment  of  cash,  the  making  of  a  loan  or  credit,  the 

28  433 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    JERSEY. 

extension  of  a  credit,  the  discount  of  an  account  receivable,  or  the  making,  ac- 
ceptance, discount,  sale  or  endorsement  of  a  bill  of  exchange,  or  promissory 
note,  for  the  benefit  of  either  himself  or  of  such  person,  firm  or  corporation ;   or 

(2)  Who  knowing  that  a  false  statement  in  writing  has  been  made,  respecting 
the  financial  condition  or  means  or  ability  to  pay,  of  himself,  or  such  person,  firm 
or  corporation  in  which  he  is  interested,  or  for  whom  he  is  acting,  procures, 
upon  the  faith  thereof,  for  the  benefit  either  of  himself  or  of  such  person,  firm  or 
corporation,  either  or  any  of  the  things  of  benefit  mentioned  in  the  first  sub- 
division of  this  section;  or 

(3)  Who,  knowing  that  a  statement  in  writing  has  been  made,  respecting 
the  financial  condition  or  means  or  ability  to  pay,  of  himself,  or  such  person,  firm 
or  corporation  in  which  he  is  interested,  or  for  whom  he  is  acting,  represents  on 
a  later  day,  in  writing,  that  such  statement  theretofore  made,  if  then  again 
made  on  said  day  would  be  then  true,  when  knowing  in  fact  that  said  statement 
if  then  made  would  be  false,  and  procures  upon  the  faith  thereof,  for  the  benefit 
either  of  himself  or  such  person,  firm  or  corporation,  either  or  any  of  the  things 
of  benefit  mentioned  in  the  first  subdivision  of  this  statement  shall  be  guilty  of 
a  misdemeanor  (Laws  of  1912,  chap.  241,  sec.  1). 

Williams  v.  Boice,  38  N.  J.  Eq.  364;  Loewenthal  v.  Company,  52  N.  J.  Eq.  440;  P.  L. 
F.  Co.  v.  Buck,  52  N.  J.  Eq.  279;  Ellerman  v.  Company,  49  N.  J.  Eq.  217;  Titus  v.  Company,. 
37  N.  J.  L.  98;  Wells  v.  Company,  19  N.  J.  Eq.  402;  Fearing  v.  Glenn,  73  Fed.  Rep.  116; 
International  Bank  v.  Faber,  86  Fed.  Rep.  443;  M.  T.  Co.  v.  D.  T.  Co.,  44  N.  J.  Eq.  568; 
Weinburg  v.  Company,  55  N.  J.  Eq.  640;  In  re  A.  A.  Griffing  Iron  Co.,  63  N.  J.  L.  168;  Kear- 
ney v.  Andrews,  10  N.  J.  Eq.  70;    Matter  of  S.  L.  S.  Co.,  44  N.  J.  L.  529. 

13.  Stockholders'   Liabilities.  —  Stockholders  are  personally  liable  to 

creditors  to  the  amount  of  unpaid  stock  held  by  them  where  the  capital  stock 

is  insufficient  to  meet  the  corporate  debts  and  obligations. 

Nat.  Trust  Co.  v.  Miller,  33  N.  J.  Eq.  155;  Wetherbee  v.  Baker,  35  N.  J.  Eq.  501;  Bick- 
ley  v.  Schlag,  46  N.  J.  Eq.  533;  20  Atl.  250;  Hood  v.  McNaughton,  54  N.  J.  L.  425;  24  Atl. 
497;  Bank  v.  Hendrickson,  40  N.  J.  L.  52;  C.  L.  Company  v.  C.  H.  Co.,  57  N.  J.  Eq.  627; 
Hebberd  v.  S.  C.  Co.,  55  N.  J.  Eq.  18;    Williams  v.  Boice,  38  N.  J.  Eq.  364. 

14.  Stock  Certificates.  —  Stock  certificates  may  be  signed  by  the  presi- 
dent or  a  vice-president,  and  either  the  treasurer  or  an  assistant  treasurer,  or 
the  secretary  or  an  assistant  secretary  (sec.  19,  as  amended  by  Laws  of  1911, 
chap.  53). 

L.  G.  Co.  v.  Smith,  51  Atl.  Rep.  152. 

15.  Preferred  Stock.  —  The  right  to  create  preferred  stock  must  be  re- 
served either  in  the  original  charter  or  in  a  certificate  of  amendment  thereto. 
At  no  time  must  the  total  amount  of  preferred  stock  issued  and  outstanding 
exceed  two-thirds  of  the  capital  stock  paid  in  in  cash  or  property.  The  pre- 
ferred stock  may,  if  desired,  be  made  subject  to  redemption  at  any  time  after 
three  years  from  the  issue  thereof  at  not  less  than  par.  No  dividend  exceeding 
eight  per  cent  per  annum,  payable  yearly,  half  yearly,  or  quarterly,  can  be  paid 
thereon.  Dividends  may  be  made  cumulative  or  non-cumulative  as  desired 
(sec.  18;  see  also  Laws  of  1902,  p.  217,  sec.  2).  Preferred  stock  may  be  made 
convertible  into  bonds,  if  desired  (Laws  of  1902,  p.  217). 

Elkins  v.  Company,  36  N.  J.  Eq.  233;  McGregor  v.  Company,  33  N.  J.  Eq.  181 ;  Pronick 
v.  Company,  58  N.  J.  Eq.  97 ;  Smith  v.  Company,  58  N.  J.  Eq.  331 ;  Berger  v.  U.  S.  Steel  Corp., 
63  N.  J.  Eq.  809;  53  Atl.  68;  State  ex  rel.  Smith  v.  Company,  52  Atl.  Rep.  23;  Mayer  v. 
Atty.-Gen.,  32  N.  J.  Eq.  815. 

16.  Payment  of  Capital  Stock.  —  Nothing  but  money  shall  be  considered 
as  payment  of  any  part  of  the  capital  stock  of  any  corporation  except  in  the 
following  cases:  Any  corporation  formed  under  the  provisions  of  the  General 
Act  may  purchase  mines  and  manufactories  or  other  property  necessary  for  its 

434 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW   JERSEY. 

business,  or  the  stock  of  any  company  or  companies  owning  mines  or  manu- 
factories, or  purchase  materials  or  other  property  necessary  for  its  business,  and 
issue  stock  to  the  amount  of  the  value  thereof  in  payment  therefor,  and  stock 
so  issued  shall  be  fully  paid  and  non-assessable  and  not  liable  to  any  further 
call.  In  the  absence  of  actual  fraud  in  the  transaction  the  judgment  of  the 
directors  as  to  the  value  of  the  property  shall  be  conclusive  (sees.  48,  49).  Within 
ten  days  after  the  payment  of  the  capital  stock  a  certificate  of  such  payment, 
signed  and  verified  by  the  president  and  secretary  or  treasurer,  must  be  filed 
with  the  Secretary  of  State.  All  officers  neglecting  to  make  such  certificate, 
after  written  request  so  to  do  by  a  creditor  or  stockholder,  are  jointly  and  sever- 
ally liable  for  all  debts  contracted  before  the  filing  of  such  certificate  (sees.  25, 
26).  As  to  payment  of  capital  stock  in  public  service  corporations,  see  Laws 
of  1906,  chap.  331. 

G.  I.  U.  Co.  v.  L'Anson'a  Exrs.,  42  N.  J.  L.  10;  43  N.  J.  L.  442;  N.  J.  M.  Ry.  v.  Ptrait, 
35  N.  J.  L.  322;  Downing  v.  Potts,  23  N.  J.  L.  66;  Nassau  Bank  v.  Brown,  30  N.  J.  Eq. 
478;  Waters  v.  Quimby,  27  N.  J.  L.  296;  28  N.  J.  L.  533;  Donald  v.  Company,  48  Atl.  Rep. 
771;  P.  T.  F.  Co.  v.  Buck,  52  N.  J.  Eq.  219;  E.  N.  Bank  v.  Company  (N.  J.),  60  Atl.  54; 
Clevenger  v.  Moore  (N.  J.),  58  Atl.  88. 

17.  Books.  —  The  books  of  the  corporation,  except  the  stock  and  transfer 
books,  may  be  kept  outside  the  State,  if  the  by-laws  or  the  certificate  of  incor- 
poration so  provide  (sees.  33,  44).  The  two  books  mentioned  are  open  to  the 
inspection  of  stockholders. 

State  ex  rel.  O'Hara  v.  Nat.  Biscuit  Co.,  54  Atl.  241;  Downing  v.  Potts,  23  N.  J.  L.  66; 
Matter  of  S.  L.  S.  Co.,  44  N.  J.  L.  529;  Rosenfield  v.  Einstein,  46  N.  J.  L.  479;  Fuller  v. 
Company,  61  N.  J.  Eq.  648;  Mitchell  v.  Company,  24  Atl.  Rep.  407;  Huylar  v.  Company,  42 
N.  J.  Eq.  139. 

18.  Office  and  Agent.  —  Every  corporation  must  maintain  its  principal 
office  within  the  State,  and  have  an  agent  in  charge  thereof,  wherein  shall  be 
kept  the  stock  and  transfer  books  of  the  corporation.  The  name  of  the  corpo- 
ration must  be  at  all  times  conspicuously  displayed  at  the  entrance  of  such  office 
(sees.  44,  45;  Laws  of  1897,  p.  175;  Laws  of  1898,  p.  410). 

Hilles  v.  Parrish,  14  N.  J.  Eq.  380;   Coe  v.  Company,  31  N.  J.  Eq.  105. 

19.  Reports.  —  Within  thirty  days  after  the  first  election  of  officers,  and 
thereafter  within  thirty  days  after  the  annual  election,  a  report  must  be  filed  in 
the  office  of  the  Secretary  of  State,  signed  either  by  the  president  and  one  other 
officer,  or  by  two  directors,  setting  forth  the  name,  registered  office  within  the 
State,  and  agent  in  charge  thereof,  business  authorized,  capital  stock  and  amount 
actually  issued  and  outstanding,  names  and  addresses  of  officers,  terms  thereof, 
and  the  date  of  the  next  annual  election.  It  must  also  state  whether  the 
name  of  the  company  has  been  at  all  times  displayed  at  the  entrance  of  its 
registered  office,  and  whether  it  has  kept  at  its  registered  office  a  transfer  book 
and  stock  book  containing  the  names  and  addresses  of  the  stockholders  and 
the  number  of  shares  held  by  them.  In  addition  to  the  foregoing  the  corporation 
must  on  or  before  the  1st  day  of  May  make  a  report  as  of  January  1st  preced- 
ing, signed  by  the  president  or  treasurer,  showing  the  amount  of  stock  actually 
i  lied  and  outstanding  as  of  that  date  as  well  as  the  amount  of  authorized  stock, 
and  whether  payment  has  been  made  therefor  in  cash  or  property  (sees.  43,  43  a; 
Laws  of  1898,  p.  410;  Laws  of  1901,  chap.  9,  p.  31).  Every  report  must  Bel 
forth  the  location  of  the  principal  office  in  the  State,  and  the  name  of  the  agent 
in  charge  thereof  upon  whom  process  may  be  served  (sec.  43).  A  certificate  of 
payment  of  capital  stock  signed  by  the  president  and  secretary  or  treasurer 
must  be  filed  within  ten  days  after  such  payment  (sec.  25). 

435 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    JERSEY. 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  in  force  in  New 
Jersey.  (See  as  to  decision  of  courts  relative  to  what  agreements  are  valid  and 
what  not,  Trenton  Potteries  Co.  v.  Olyphant,  58  N.  J.  Eq.  507  (1897) ;  Meredith 
v.  Company,  55  N.  J.  Eq.  211  (1897)  ;  56  N.  J.  Eq.  454  (1897)  ;  Ellerman  v.  Com- 
pany, 49  N.  J.  Eq.  217  (1891).) 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited  in  New  Jersey  upon  the  following  grounds :  For  failure  to  comply  with 
a  court  order  requiring  corporate  books  to  be  brought  within  the  State  ;  for 
non-payment  of  the  annual  franchise  tax  (sec.  44;  Laws  of  1896,  p.  319;  Laws 
of  1904,  chap.  219;   Laws  of  1905,  chap.  259). 

22.  Amendments.  —  Before  the  payment  of  any  part  of  the  capital  stock 
incorporators  are  permitted  to  record  with  the  clerk  of  the  county  in  which  the 
original  certificate  of  incorporation  is  recorded  and  filed,  and  with  the  Secre- 
tary of  State,  an  amended  certificate  duly  signed  and  acknowledged  by  all  the 
incorporators  modifying,  changing,  or  altering  the  original  certificate  of  incorpo- 
ration in  whole  or  in  part.  The  charge  for  filing  and  recording  this  amendment 
is  $20  (sec.  26  a;  see  also  Laws  of  1899,  p.  174). 

To  change  the  nature  of  the  business,  the  corporate  name,  increase  or  de- 
crease the  capital  stock,  change  the  par  value  of  the  shares,  change  the  location 
of  the  principal  office  of  the  corporation  within  the  State,  to  extend  corporate 
existence,  or  to  create  one  or  more  classes  of  preferred  stock,  to  change  its 
common  stock  into  one  or  more  classes  of  preferred  stock,  the  following  method 
of  procedure  must  be  adopted:  First,  the  board  of  directors  must  pass  a  reso- 
lution declaring  that  such  amendment  is  advisable  and  calling  a  meeting  of 
the  stockholders  to  take  action  thereon.  The  meeting  must  be  held  upon  such 
notice  as  the  by-laws  provide,  and  in  the  absence  of  such  provision,  upon  ten 
days'  notice  given  personally  or  by  mail.  If  two-thirds  in  interest  of  each 
fclass  of  the  stockholders  having  voting  powers  shall  vote  in  favor  of  such  amend- 
ment, a  certificate  thereof  shall  be  signed  by  the  president  and  secretary  under 
the  corporate  seal,  acknowledged  or  proved  as  in  the  case  of  deeds  of  real  estate, 
and  such  certificate,  together  with  the  written  assent  in  person  or  by  proxy, 
of  two-thirds  in  interest  of  each  class  of  such  stockholders,  shall  be  filed  in  the 
office  of  the  Secretary  of  State,  and  upon  the  filing  of  the  same  the  certificate 
of  incorporation  shall  be  deemed  to  be  amended  accordingly  (sec.  27 ;  see  also 
sec.  134;  Laws  of  1908,  p.  84). 

Special  provision  is  made  in  the  case  of  change  of  location  of  office  or 
decrease  of  capital  stock.  The  law  provides  that  the  board  of  directors  may 
change  the  location  of  the  principal  office  by  resolution  adopted  at  a  regular 
or  special  meeting  of  said  board  by  the  vote  of  at  least  two-thirds  of  the  mem- 
bers of  such  board.  No  certificate,  however,  is  required  to  be  filed  in  the  case 
of  the  removal  of  any  office  from  one  point  to  another  in  the  same  town  or 
city  in  the  State.  The  foregoing  provision  generally  covers  cases  where  it  is 
desired  to  change  the  resident  agent  in  charge  of  the  office.  Upon  the  adoption 
of  a  resolution  as  aforesaid,  a  copy  thereof  must  be  filed  in  the  office  of  the 
Secretary  of  State  signed  by  the  president  and  secretary  of  the  corporation  and 
sealed  with  its  corporate  seal.  For  filing  this  certificate  the  Secretary  of  State 
charges  a  fee  of  $5  (sec.  28  a;    Laws  of  1897,  p.  175). 

Decrease  of  capital  stock  may  be  effected  by  the  retiring  or  reducing  any 

class  of  the  stock,  or  by  drawing  the  necessary  shares  by  lot  for  retirement,  or 

by  the  surrender  by  every  shareholder  of  his  shares  and  the  issuance  to  him  in 

lieu  thereof  of  a  decreased  number  of  shares,  or  by  the  purchase  at  not  above 

436 


DIGEST    OF   INCORPORATION    ACTS. NEW   JERSEY. 

par  of  certain  shares  for  retirement,  or  by  retiring  the  shares  owned  by  the 
corporation,  or  by  reducing  the  par  value  of  the  shares.  The  certificate  reduc- 
ing the  capital  stock  must  be  published  for  three  weeks  successively,  at  least 
once  in  each  week,  in  a  newspaper  published  in  the  county  in  which  the  princi- 
pal office  of  the  corporation  is  located,  the  first  publication  to  be  made  within 
fifteen  days  after  the  filing  of  such  certificate  (sec.  29). 

Meredith  v.  Company,  59  N.  J.  Eq.  257;  60  N.  J.  Eq.  445;  Pronick  v.  Companv,  58  N. 
J.  Eq.  97;    Donald  v.  Company,  48  Atl.  Rep.  771 ;    Way  v.  Company,  60  N.  J.  Eq.  263. 

23.  Extension  of  Corporate  Existence.  —  May  be  extended  by  compli- 
ance with  the  statute  for  any  period  desired  (sees.  27,  119;  Laws  of  1903, 
chap.  205). 

N.  L.  Lead  Co.  v.  Dickinson  (N.  J.),  57  Atl.  138. 

24.  Dissolution.  —  Voluntary  dissolution  of  the  corporation  requires  a 
majority  vote  of  directors  and  written  assent  of  two-thirds  in  interest  of  the 
stock.  If  the  written  assent  of  all  the  stockholders  is  obtained,  a  meeting  for 
the  purpose  of  voting  upon  the  question  of  dissolution  is  unnecessary  (sec.  31 ; 
Laws  of  1900,  p.  316).  The  incorporators  also  have  power  to  dissolve  the  cor- 
poration before  capital  is  paid  in  and  business  commenced  (sec.  32).  Whenever 
any  corporation  shall  become  insolvent  or  shall  suspend  its  ordinary  business 
for  want  of  funds  to  carry  on  the  same,  or  if  its  business  has  been  and  is  being 
conducted  at  a  great  loss  and  greatly  prejudicial  to  the  interest  of  its  creditors 
or  stockholders,  any  creditor  or  stockholder  may  by  petition  or  bill  of  com- 
plaint, setting  forth  the  facts  and  circumstances  of  the  case,  apply  to  the  Court 
of  Chancery  for  a  writ  of  injunction  and  the  appointment  of  a  receiver  or  re- 
ceivers or  trustee  or  trustees,  and  the  court  being  satisfied  by  affidavit  or 
otherwise  of  the  sufficiency  of  said  application,  and  of  the  truth  of  the  allega- 
tions contained  in  the  petition  or  bill,  and  upon  such  notice,  if  any,  as  the  court 
by  order  may  direct,  may  proceed  in  a  summary  way  to  hear  the  affidavits, 
proofs  and  allegations  which  may  be  offered  on  behalf  of  the  parties,  and  if 
upon  such  inquiry  it  shall  appear  to  the  court  that  the  corporation  has  become 
insolvent  and  is  not  about  to  resume  its  business  in  a  short  time  thereafter, 
or  that  its  business  has  been  and  is  being  conducted  at  a  great  loss  and  greatly 
prejudicial  to  the  interest  of  its  creditors  or  stockholders  so  that  its  business 
cannot  be  conducted  with  safety  to  the  public  and  advantage  to  the  stock- 
holders, it  may  issue  an  injunction  to  restrain  the  corporation  and  its  officers 
and  agents  from  exercising  any  of  its  privileges  or  franchises  and  from  collect- 
ing or  receiving  any  debts  or  paying  out,  selling,  assigning,  or  transferring  any 
of  its  estate,  moneys,  funds,  lands,  tenements  or  effects,  except  to  a  receiver 
appointed  by  the  court,  until  the  court  shall  otherwise  order  (Laws  of  1912, 
chap.  300). 

Benedict  v.  Company,  49  N.  J.  Eq.  23. 

2").  Annual  Franchise  Tax.  —  An  annual  franchise  tax  is  imposed  upon 
all  domestic  business  corporations  at  the  rate  of  one-tenth  of  one  per  cent  on 
all  amounts  of  capital  stock  issued  and  outstanding  up  to  and  including  the 
sum  of  $3,000,000.  On  all  sums  of  capital  stock  issued  and  outstanding  in 
excess  of  $3,000,000,  and  not  exceeding  $5,000,000,  the  tax  is  one-twentieth  of 
one  per  cent,  and  the  further  sum  of  $50  per  annum  per  $1,000,000  or  any  part 
thereof  on  all  amounts  of  capital  stock  issued  and  outstanding  in  excess  of 
$5,000,000.    Any  shares  of  stock  either  fully  paid  or  partly  paid  in  cash  or  by 

437 


DIGEST    OF    INCORPORATION    ACTS. NEW   JERSEY. 

property  purchased,  whether  issued  or  otherwise,  shall  be  deemed  to  be  shares 
of  stock  issued  and  outstanding  until  such  shares  or  any  substitute  therefor 
shall  have  been  retired  and  actually  cancelled  (Laws  of  1906,  chap.  19).  Manu- 
facturing or  mining  corporations  are  exempt  from  the  payment  of  the  annual 
franchise  tax  provided  at  least  fifty  per  cent  of  their  capital  stock  issued  and 
outstanding  is  invested  in  mining  or  manufacturing  carried  on  within  the  State, 
and  provided  also  that  they  shall  state  in  their  annual  returns  to  the  State 
Board  of  Assessors  the  location  of  such  mine  or  manufacturing  establishment, 
the  grade  of  the  ores  mined,  or  the  goods  manufactured,  the  total  amount  of 
the  capital  stock  embarked  in  such  business,  and  the  amount  of  capital  stock 
actually  employed  in  New  Jersey  in  carrying  on  such  business.  If  any  manu- 
facturing or  mining  company  carrying  on  business  in  the  State  shall  have  less 
than  fifty  per  cent  of  its  capital  stock  issued  and  outstanding  invested  in  busi- 
ness carried  on  within  the  State,  such  company  shall  pay  the  annual  license 
fee  or  franchise  tax  herein  provided  for  companies  not  carrying  on  business  in 
the  State,  and  shall  be  entitled  in  the  computation  of  such  tax  to  a  deduction 
from  the  amount  of  its  capital  stock  issued  and  outstanding  of  the  assessed 
value  of  its  real  and  personal  estate  so  used  in  manufacturing  or  mining  (Laws 
of  1906,  chap.  19). 

N.  C.  Co.  v.  Assessors,  53  N.  J.  L.  564;  E.  P.  Co.  v.  Assessors,  55  N.  J.  L.  55;  E.  P.  T. 
Company's  Case,  51  N.  J.  Eq.  71;  E.  U.  P.  Co.  v.  Assessors,  57  N.  J.  L.  520;  S.  B.  Co.  v. 
Assessors,  60  N.  J.  L.  66;  61  N.  J.  L.  289;  Printing  Co.  v.  Assessors,  51  N.  J.  L.  75;  E.  J. 
Ass'n  v.  Assessors,  47  N.  J.  L.  36. 

26.  Foreign  Corporations.  —  Must  file  copy  of  charter  with  the  Secretary 
of  State  attested  by  its  president  and  secretary  under  its  corporate  seal,  and  a 
statement  attested  in  like  manner  of  the  amount  of  its  capital  stock  authorized, 
and  the  amount  actually  issued,  the  character  of  the  business  wliich  it  is  to  trans- 
act in  the  State  and  designating  its  principal  office  in  the  State,  and  an  agent 
who  shall  be  a  domestic  corporation  or  a  natural  person  of  full  age,  actually 
resident  in  the  State,  together  with  his  place  of  abode,  upon  whom  process  may 
be  served.  For  filing  copy  of  charter  and  statement  in  the  Secretary  of  State's 
office,  the  fee  is  $10  (sec.  114).  The  fee  for  recording  certificate  of  incorporation 
of  foreign  corporations  is  10  cents  per  folio  of  one  hundred  words.  They  must 
also  file  the  same  reports  required  of  them  in  their  domiciliary  State,  if  any, 
before  they  are  allowed  to  transact  business  therein.  They  must  pay  the  same 
license  tax  as  is  required  by  the  laws  of  such  domiciliary  State,  of  New  Jersey 
corporations.  Annual  reports  are  also  required  (Laws  of  1897,  p.  124 ;  Laws 
of  1904,  chap.  221 ;  Laws  of  1896,  sees.  43,  97-99,  100).  Foreign  corporations 
are  expressly  exempt  from  the  provisions  of  law  as  to  keeping  stock  and  trans- 
fer books  within  the  State  (sec.  43;  Laws  of  1908,  chap.  113). 

D.  &  H.  Canal  Co.  v.  Mahenbrock,  63  N.  J.  L.  281 ;  43  Atl.  978;  Del.,  etc.  Co.  v.  Pensau- 
ken,  116  Fed.  910;  Faxon  Co.  v.  Lovett,  60  N.  J.  L.  128;  A.  N.  &  T.  Co.  v.  Gintlens,  et  al.,  21 
N.  J.  L.  190;  Man,  etc.  Loan  Ass'n  v.  Massareli,  42  Atl.  Rep.  284;  Benton  v.  City  of  Eliza- 
beth, 61  N.  J.  L.  411;    61  N.  J.  L.  693. 


438 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    MEXICO. 


NEW   MEXICO. 

(Unless  otherwise  stated,  references  below  are  to  the  Territorial  Assembly  Laws  of  1905, 
chap.  79.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  New  Mexico  is  to  be  found  in  chap.  79  of 
the  Territorial  Laws  of  1905,  approved  March  15,  1905.  Under  it  corpora- 
tions may  be  formed  for  any  lawful  purpose  or  purposes  whatsoever,  except 
for  the  construction  and  operation  of  railroads,  telegraph  lines,  express  com- 
panies, savings  banks,  banks,  building  and  loan  associations,  insurance,  surety, 
and  irrigation  companies.  Corporations  may,  however,  be  incorporated  for 
the  purpose  of  constructing,  maintaining,  and  operating  railroads,  telegraph 
lines,  express  companies,  or  any  of  the  other  excepted  purposes  above  enu- 
merated, for  the  purpose  of  transacting  business  outside  of  the  Territory 
(sec.  5;    see  also  Laws  of  1909,  C.  H.  B.  No.  27,  approved  March  18,  1909). 

2.  Incorporators.  —  Any  number  not  less  than  three.  There  are  no  resi- 
dential requirements  (sec.  5).  If  before  incorporation  one  of  the  incorporators 
dies,  the  survivors  may  in  writing  designate  another  person  or  persons  to  take 
the  place  or  places  of  the  deceased  incorporator  (sec.  121). 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate  must 
set  forth : 

a.  Nome.  —  There  cannot  be  more  than  one  corporation  of  the  same  name 
(sec.  7). 

b.  Domiciliary  Office.  —  The  location  (town  or  city  and  street  number,  if 
name  of  the  agent  therein  and  in  charge  thereof,  upon  whom  process  against 
number  there  be)  of  its  principal  office  within  the  Territory  (sec.  7),  and  the 
the  corporation  may  be  served. 

c.  Purposes.  —  Any  number  of  purposes  not  covered  by  special  act  are 
permitted  (sec.  7). 

d.  Capital  Stock.  —  The  amount  of  the  total  authorized  capital  stock  of  the 
corporation,  which  cannot  be  less  than  $3,000 ;  the  number  of  shares  into  which 
the  same  is  divided,  and  the  par  value  of  each  share ;  the  amount  of  the  capital 
stock  with  which  it  will  commence  business,  which  cannot  be  less  than  $2,000, 
and  if  there  be  more  than  one  class  of  stock  created  by  the  certificate  of  incor- 
poration a  description  of  the  different  classes  with  the  terms  on  which  they  are 
created  (sec.  7). 

e.  Incorporators.  —  The  names  and  post-office  addresses  of  the  incorporators 
and  the  number  of  shares  subscribed  for  by  each.  The  aggregate  of  said  sub- 
scriptions shall  be  the  amount  with  which  the  company  will  begin  business, 
and  must  be  at  least  $2,000. 

/.  Duration.  —  The  number  of  years,  if  any,  limited  for  the  duration  of  the 
company.     The  maximum  duration  is  fifty  years  (sec.  7). 

g.  Directors.  —  The  number  of  directors,  not  less  than  three,  and  the  names 
of  those  who  are  to  act  as  such  for  the  first  three  months  (sec.  16). 

h.  Regulation  of  Internal  Affairs.  —  The  certificate  of  incorporation  may 
also  contain  any  provision  which  the  incorporators  may  choose  to  insert  for 
the  regulation  of  the  business  and  for  the  conduct  of  the  affairs  of  the  corpora- 
tion, and  any  provision  creating,  defining,  limiting,  and  regulating  the  powers 

439 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    MEXICO. 

of  the  corporation,  the  directors,  and  the  stockholders,  or  any  class  or  classes 
of  stockholders  (sec.  7). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers,  the  following  additional  powers  are  granted :  To  conduct 
business  in  other  States  and  foreign  countries ;  to  confer  upon  directors  power 
to  alter  by-laws ;  to  classify  directors ;  to  authorize  voting  by  proxy ;  to  issue 
preferred  stock;  to  convert  preferred  stock  into  bonds;  to  issue  bonds  con- 
vertible into  common  stock ;  provide  for  cumulative  voting ;  to  hold  stock  in 
other  corporations;  to  consolidate  with  other  corporations;  to  appoint  an 
executive  committee;  to  lease  its  property  to  other  corporations;  to  forfeit 
stock  for  non-payment  of  assessments;  to  hold  stock  and  bonds  in  other  cor- 
porations (sees.  1,  2,  11,  24-26  inclusive,  40,  57,  58,  112,  114,  124;  Laws  of 
1909,  C.  H.  B.  No.  49,  approved  Feb.  26,  1909). 

5.  Procuring  the  Charter. — The  certificate  of  incorporation  must  be 
signed  in  person  or  by  attorney  in  fact,  by  all  of  the  subscribers  to  the  capital 
stock  named  therein.  It  must  be  acknowledged  in  the  same  manner  as  is  re- 
quired for  deeds  of  real  estate,  and  must  be  filed  in  the  office  of  the  Secretary 
of  the  Territory.  A  copy  thereof  duly  certified  by  the  Secretary  of  the  Terri- 
tory must  be  recorded  in  a  book  to  be  kept  for  that  purpose  in  the  office  of 
the  recorder  of  the  county,  where  the  principal  office  of  said  company  shall 
be  established,  and  thereupon  corporate  existence  commences  (sees.  5,  7,  8,  9). 
Within  twenty  days  after  the  filing  of  the  same,  a  certified  copy  of  the  cer- 
tificate of  incorporation  (and  certificate  of  stockholders'  non-liability,  if  any) 
shall  be  published  in  some  newspaper  of  general  circulation  in  the  county  where 
the  principal  office  of  the  corporation  is  located.  Proof  of  such  publication 
shall  be  filed  with  the  Secretary  of  the  Territory. 

Within  thirty  days  after  filing  of  the  same  a  certified  copy  of  the  certificate 
of  incorporation  and  all  amendments  or  supplements  thereto,  and  all  amended 
certificates  of  incorporation  and  certificates  thereto,  and  all  amended  certifi- 
cates of  incorporation  and  certificates  of  stockholders'  non-liability,  shall  be 
published  three  times  in  three  successive  issues  of  some  newspaper  of  general 
circulation  in  the  county  where  the  general  place  of  business  of  such  corpora- 
tion is  designated,  and  in  the  case  of  foreign  corporations  in  the  county  wherein 
resides  the  agent  of  such  corporation  on  wKom  process  may  be  served,  and  proof 
of  such  publication  shall  be  filed  with  the  Secretary  of  the  Territory  within 
twenty  days  after  the  date  of  the  last  publication.  And  upon  failure  to  comply 
with  this  provision  for  a  period  of  twenty  days  thereafter,  such  corporation, 
whether  domestic  or  foreign,  shall  forfeit  the  right  to  do  business  in  this  Terri- 
tory and  be  fined  in  a  sum  not  less  than  $100  for  such  failure,  to  be  recovered 
by  suit  in  the  name  of  the  Territory. 

For  such  publications  and  all  other  publications  required  under  this  act, 
the  publisher  shall  receive  not  to  exceed  the  fees  allowed  for  publication  of 
notice  of  pendency  of  suits,  as  prescribed  by  the  laws  of  the  Territory.  Any  less 
rate  may  be  contracted  between  the  parties  as  they  may  see  fit  (sec.  135). 

6.  Corporate  Indebtedness.  — There  is  no  limitation  upon  the  amount 
of  indebtedness  which  corporations  may  incur. 

7.  Organization  Tax. — Ten  cents  for  each  thousand  dollars  of  total 
authorized  capital,  but  in  no  case  less  than  $25  (sec.  119). 

8.  Filing  and  Recording  Fees.  —  The  Secretary  of  the  Territory  is  en- 
titled to  no  fees  for  filing  and  recording  the  certificate  of  incorporation  other  than 
the  payment  of  the  organization  tax.     The  payment  of  this  fee  also  entitles 

440 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    MEXICO. 

the  corporators  to  a  certificate  of  incorporation.  The  charge  for  certified  copy 
of  certificate  of  incorporation  is  ten  cents  per  hundred  words  for  making  copy 
and  SI  for  the  certificate.  For  fifing  increase  of  capital  stock,  10  cents  for 
each  thousand  dollars  of  the  total  increase  authorized,  but  in  no  case  less  than 
$20 ;  consolidation  and  merger  of  corporations,  10  cents  for  each  thousand 
dollars  of  capital  stock  authorized,  beyond  the  total  authorized  capital  of  the 
corporation  consolidated,  but  in  no  case  less  than  $20.  For  filing  change  of 
name,  change  of  nature  of  business,  amended  certificates  of  organization,  decrease 
of  capital  stock,  increase  or  decrease  of  par  value  or  number  of  shares,  S20 ;  for 
filing  certificate  of  change  of  location  of  principal  office,  $5 ;  for  filing  list  of 
officers  and  directors,  $1  ;  recording  fees  in  recorder  of  deeds'  office,  10  cents 
a  folio  for  the  first  ten  folios  of  one  hundred  words,  and  10  cents  a  folio  for  all 
over  (sec.  119) ;  for  filing  certificate  in  same  office,  50  cents.  Cost  of  publication 
averages  about  SI 2. 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  the  certificate  of  incorporation  is  filed,  as  required  by  law.  The  law 
provides  that  the  president  and  secretary  or  treasurer  upon  payment  of  the 
capital  stock,  and  of  every  increase  thereof,  shall  make  a  certificate  stating 
the  amount  of  capital  so  paid,  whether  paid  in  cash  or  by  the  purchase  of  prop- 
erty, and  stating  also  the  total  amount  of  capital  stock,  if  any,  previously  paid 
and  reported.  This  certificate  after  being  signed  and  sworn  to  by  the  president 
and  secretary  or  treasurer  is  within  ten  days  after  such  payment  to  be  filed 
in  the  office  of  the  Secretary  of  the  Territory  (sec.  27).  There  is  no  absolute 
penalty  for  failure  to  comply  with  this  provision,  but  officers  neglecting  or 
refusing  to  do  so  for  a  period  of  thirty  days  after  written  request  served  on 
them  by  any  stockholder,  are  jointly  and  severally  liable  for  all  debts  con- 
tracted before  such  filing. 

10.  Organization  Meeting. — The  organization  meeting  must  be  held 
within  the  Territory.  If  all  of  the  incorporators  shall  in  writing  waive  notice 
and  fix  a  time  and  place  for  the  meeting,  no  notice  or  publication  shall  be 
required  (sec.  15).  At  the  organization  meeting  the  president  must  be  elected 
(who  must  also  be  a  member  of  the  board  of  directors),  and  a  secretary  and 
treasurer.  The  secretary  must  be  sworn  and  the  treasurer  must  give  such 
bond  as  may  be  provided  for  by  the  by-laws  (sec.  12).  The  officers  must  be 
elected  either  by  the  stockholders  or  directors  as  the  by-laws  provide. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  within  the  Territory  (sees.  16,  37-46  inclusive,  and  sec.  50). 
Directors'  meetings  may  be  held  within  or  without  the  Territory  as  the  by-laws 
may  provide  (sec.  50). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  at  least  three  directors  who  must  be  stockholders.  One  director 
must  be  a  resident  of  the  Territory,  and  directors  may  be  classified  into  not 
more  than  five  classes,  according  to  the  length  of  their  term.  The  directors 
may  by  authority  conferred  in  the  by-laws,  or  by  the  certificate  of  incorporation, 
appoint  an  executive  committee  to  act  for  and  m  the  name  of  the  board  of 
directors  (sees.  11,  44).  Cumulative  voting  for  directors  may  be  provided  for 
in  the  certificate  of  incorporation  (sec.  40). 

6.  Liabilities.  —  Directors  are  liable  for  the  illegal  declaration  of  dividends, 
and  for  the  unlawful  reduction  of  capital,  unless  they  enter  their  dissent  from 
such  action  at  length  upon  the  minutes  of  the  meetings  of  the  board  of  directors, 
and  causing  a  true  copy  of  such  dissent  to  be  published  within  two  weekB 

441 


DIGEST    OF   INCORPORATION    ACTS.  —  NEW   MEXICO. 

after  the  same  shall  have  been  so  entered,  in  a  newspaper  published  in  the 
county  where  the  corporation  has  its  principal  place  of  business  (sees.  33,  34). 
Directors  are  also  forbidden  to  make  loans  to  stockholders  or  officers  of  the 
corporation,  and  are  liable  for  making  false  certificates  (sees.  54,  59).  Any 
officer  neglecting  or  refusing  to  file  the  certificate  required  by  law  relative 
to  the  payment  of  capital  stock  within  thirty  days  after  written  request  so  to 
do  by  a  creditor  or  stockholder  of  the  corporation,  is  jointly  and  severally 
liable  for  all  debts  contracted  before  the  filing  of  such  certificate.  Directors 
are  liable  for  failure  to  publish  certificates  of  decrease  of  capital  stock  (sec.  33). 
Any  officer  who  refuses  to  exhibit  books  or  list  of  stockholders  forfeits  $200 
for  each  offence,  and  directors  by  such  refusal  render  themselves  ineligible  to 
office  at  next  election  (sec.  37).  Directors  are  also  ineligible  to  re-election  by 
reason  of  failure  to  file  annual  report  within  thirty  days  after  demand  by  the 
Territorial  Secretary  (sec.  48). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  personally  liable  to 
creditors  to  the  amount  of  unpaid  stock  held  by  them  where  the  capital  stock 
is  insufficient  to  meet  the  corporate  debts  and  obligations  (sec.  22).  Even 
this  liability  may  be  avoided  by  filing  with  the  certificate  of  incorporation  a 
separate  certificate  signed  and  executed  in  the  same  manner  as  in  the  case 
of  the  original  certificate  of  incorporation,  declaring  that  there  shall  be  no 
stockholders'  liability  on  account  of  any  stock  issued.  Tins  certificate  must 
be  filed  in  the  office  of  the  Secretary  of  the  Territory  at  the  same  time  as  the 
certificate  of  incorporation,  and  must  be  likewise  certified  and  recorded  in  the 
office  of  the  county  recorder.  To  obtain  the  benefit  of  such  a  certificate,  how- 
ever, both  the  certificate  of  incorporation  together  with  the  declaration  of  non- 
liability of  stockholders  must  be  published  in  the  manner  provided  by  law  (sec. 
23).  After  this  is  done,  stockholders  in  any  corporation  are  only  liable  for  the 
amount  of  the  capital  certified  to  have  been  actually  paid  in  property  or  cash 
at  the  time  of  the  commencement  of  business.     (See  also  sees.  96-98.) 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
showing  the  number  of  shares  owned  by  him  and  signed  by  the  president  and 
secretary  (sec.  20). 

15.  Preferred  Stock.  —  Corporations  may  issue  two  or  more  kinds  of 
stock  of  such  classes  and  with  such  distinctions  and  preferences  and  voting 
powers  as  shall  be  stated  and  expressed  in  the  certificate  of  incorporation,  or 
any  certificate  of  amendment  thereof.  At  no  time,  however,  can  the  total 
amount  of  the  preferred  stock  issued  and  outstanding  exceed  two-thirds  of  the 
capital  stock  paid  in  in  cash  or  property.  The  preferred  stock  may  if  desired 
be  subject  to  redemption  at  any  fixed  time  after  the  issue  thereof  at  a  price 
not  less  than  par,  and  the  holders  thereof  shall  be  entitled  to  receive  and  the 
corporation  shall  be  bound  to  pay  thereon  dividends  at  such  rates  and  on  such 
conditions  as  shall  be  stated  in  the  original  or  amended  certificate  of  incorpora- 
tion, not  exceeding  ten  per  cent  per  annum,  payable  quarterly,  half  yearly,  or 
yearly.  Such  dividends  may  be  made  cumulative  if  desired.  Preferred  stock- 
holders are  expressly  exempted  from  liability  for  debts  of  the  corporation,  and 
in  case  of  insolvency  the  corporation's  debts  or  other  liabilities  must  be  paid 
in  preference  to  the  preferred  stock  (sec.  18).  Preferred  stock  may  be  made 
convertible  into  bonds  if  desired  (sec.  19). 

16.  Payment  of  Capital  Stock.  —  The  law  provides  that  nothing  but 
money  shall  be  considered  as  payment  of  any  part  of  the  capital  stock  except 
in  the  case  of  the  purchase  of  property  (sec.  54).    The  law,  however,  specifically 

442 


DIGEST    OF    INCORPORATION    ACTS. NEW    MEXICO. 

provides  that  any  corporation  formed  under  the  act  may  purchase  mine, 
manufactories,  or  other  property  necessary  or  proper  for  its  business,  or  the 
stock  of  any  company  or  companies  owning  mines  and  manufacturing  or  pro- 
ducing materials  or  other  property  necessary  or  proper  for  its  business,  and 
issue  stock  to  the  amount  of  the  value  thereof  in  payment  therefor,  and  the 
stock  so  issued  shall  be  full  paid  stock  and  not  liable  to  any  further  call,  neither 
shall  the  holders  thereof  be  liable  for  any  further  payment  under  any  of  the 
provisions  of  this  act,  and  in  the  absence  of  fraud  in  the  transaction  the  judg- 
ment of  the  directors  as  to  the  value  of  the  property  purchased  shall  be  con- 
clusive ;  and  in  all  statements  and  reports  of  the  corporation  to  be  published  or 
filed  this  stock  shall  not  be  stated  or  reported  as  being  issued  for  cash  paid  to 
the  corporation,  but  shall  be  reported  in  this  respect  according  to  the  fact 
(sees.  55,  57).  The  law  provides  that  the  president  and  secretary  or  treasurer, 
upon  payment  of  the  capital  stock  and  of  every  increase  thereof,  shall  make  a 
certificate  stating  the  amount  of  the  capital  stock  so  paid,  whether  paid  in  cash 
or  by  the  purchase  of  property,  and  stating  also  the  total  amount  of  capital 
stock,  if  any,  previously  paid  and  reported.  Tliis  certificate,  after  being  signed 
by  the  president  and  secretary  or  treasurer,  and  sworn  to  by  the  above  officers, 
is  within  ten  days  after  such  payment  to  be  filed  in  the  office  of  the  Secretary  of 
the  Territory  (sec.  27). 

17.  Books.  —  Stock  and  transfer  books  must  be  kept  at  the  principal  and 
registered  office  of  the  corporation  in  the  Territory  (sec.  37).  These  books 
must  be  open  to  the  examination  of  any  stockholder  during  business  hours. 
Any  officer  having  charge  of  such  books  and  refusing  or  neglecting  to  exhibit 
the  same  to  a  stockholder  during  the  usual  hours  for  business,  shall  for  such 
offence  forfeit  the  sum  of  $200.  The  law  provides,  however,  that  no  stock- 
holder or  other  person  shall  have  the  right  to  inspect  such  books  for  any  im- 
proper purpose  or  any  purpose  not  connected  with  the  business  of  the  corporation 
(sec.  37).  All  other  books  excepting  the  stock  and  transfer  books  may  be  kept 
outside  of  the  Territory  if  desired  (sec.  50). 

18.  Office  and  Agent.  —  The  corporation  must  set  forth  in  its  certif- 
icate of  incorporation  the  name  of  its  agent  therein,  the  one  in  charge  of  its 
registered  office  within  the  State  and  upon  whom  process  against  the  cor- 
poration may  be  served.  The  office  designated  in  the  certificate  shall  be 
deemed  the  office  and  post-office  address  of  the  corporation  (sees.  49  and 
50).  The  maintenance  of  this  office  is  made  obligatory  upon  the  corpora- 
tion. (See  sec.  50.)  The  law  also  requires  the  name  of  every  corporation 
at  all  times  to  be  conspicuously  displayed  at  the  office  of  the  corporation 
in  the  Territory  (sec.  51). 

19.  Reports.  —  All  corporations,  both  foreign  and  domestic,  must  file  in 
the  office  of  the  Secretary  of  the  Territory  within  thirty  days  after  the  first 
election  of  officers  and  directors,  and  annually  thereafter,  within  thirty  days 
after  the  time  appointed  for  holding  the  annual  election  of  directors,  a  report, 
authenticated  by  the  signatures  of  the  president  and  one  other  officer,  or  by 
any  two  directors  of  the  company,  stating:  (1)  Name  of  the  corporation.  (2) 
The  specific  location  of  its  registered  office  in  the  Territory  and  the  name  of 
the  agent  upon  whom  process  against  the  corporation  may  be  served.  (3) 
The  character  of  its  business.  (4)  The  amount  of  its  authorized  capital  stock, 
if  any,  and  the  amount  actually  issued  and  outstanding.  (5)  The  names  and 
addresses  of  all  the  directors  and  officers  of  the  company  and  when  the  term 
of  office  of  each  expires.     (G)  The  date  appointed  for  the  next  annual  tneel 

443 


DIGEST    OF    INCORPORATION   ACTS. — NEW   MEXICO. 

ing  of  the  stockholders  for  the  election  of  directors.  If  such  report  is  not  made 
and  filed,  the  Secretary  of  the  Territory  is  entitled  to  a  fee  of  $1  for  notifying 
the  corporation  of  such  delinquency,  and  if  the  report  is  not  made  and  filed 
within  thirty  days  after  such  notice,  the  corporation  shall  forfeit  to  the  Terri- 
tory $25  (sec.  48,  as  amended  by  Laws  of  1907,  chap.  41).  The  law  further 
provides  that  if  the  report  is  not  so  made  and  filed,  all  directors  of  any  domestic 
corporation  wilfully  refusing  to  comply  with  the  law  and  who  are  in  office 
during  the  default  shall  at  the  time  appointed  for  the  next  election,  and  for  a 
period  of  one  year  thereafter,  be  rendered  ineligible  for  the  election  or  appoint- 
ment to  any  office  in  the  corporation  (sec.  48,  also  sec.  49).  The  law  provides 
that  the  president  and  secretary  or  treasurer,  upon  payment  of  the  capital 
stock  and  of  every  increase  thereof,  shall  make  a  certificate  stating  the  amount 
so  paid,  whether  paid  in  cash  or  in  the  purchase  of  property,  and  stating  also 
the  total  amount  of  capital  stock,  if  any,  previously  paid  and  reported.  This 
certificate,  after  having  been  signed  and  sworn  to  by  the  above  officers,  is 
within  ten  days  after  such  payment  required  to  be  filed  in  the  office  of  the 
Secretary  of  the  Territory. 

20.  Anti-Trust  Statute.  —  Trusts,  pools,  combinations  having  for  their 
object  the  restriction  of  trade  or  commerce  or  the  control  of  the  quantity  and 
price  of  any  article  of  manufacture  or  product  of  the  soil  or  mine,  is  declared  to 
be  illegal.  (Compiled  Laws  of  New  Mexico,  1897,  sees.  1292-1294  a,  as  amended 
by  Laws  of  1907,  chap.  18.) 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  All  charters  are 
subject  to  repeal  by  the  legislatures  (sec.  3).  Also  in  case  the  corporation 
fails  to  comply  with  the  order  of  any  court  calling  for  the  producing  of  stock 
and  transfer  books  for  the  inspection  of  those  authorized  to  see  the  same,  the 
charter  of  such  corporation  may  be  declared  forfeited  by  the  court  making  such 
order  (sec.  50).  The  right  to  do  business  within  the  territory  may  be  forfeited 
for  failure  to  comply  with  the  provisions  as  to  publication  of  certificate  of 
incorporation  and  filing  proof  thereof  (sec.  135). 

22.  Amendments.  —  The  incorporators  before  the  payment  of  any  part  of 
its  capital  stock  may  file  with  the  Secretary  of  the  Territory  and  record  a  cer- 
tified copy  thereof  in  the  office  of  the  recorder  of  the  county  in  which  its  principal 
place  of  business  is  located,  an  amended  certificate  duly  signed  by  all  the 
incorporators  named  in  the  original  certificate  of  incorporation  modifying  or 
changing  the  original  certificate  in  whole  or  in  part  (sec.  29). 

Corporations  may  also  change  the  nature  of  their  business,  change  their 
name,  increase  or  decrease  their  capital  stock,  change  the  location  of  their 
principal  office,  and  make  such  other  amendment  as  may  be  desired  in  manner 
following : 

The  board  of  directors  shall  pass  a  resolution  declaring  that  such  change  or 
alteration  is  advisable  and  calling  a  meeting  of  the  stockholders  to  take  action 
thereon.  The  meeting  may  be  held  upon  such  notice  as  the  by-laws  provide, 
and  in  the  absence  of  such  provision  upon  twenty  days'  notice  either  personally 
or  by  mail.  If  two-thirds  in  interest  of  each  class  of  the  stockholders  having 
voting  powers  shall  vote  in  favor  of  such  amendment,  a  certificate  thereof  shall 
be  signed  and  acknowledged  by  the  president  and  secretary  under  the  corporate 
seal,  and  such  certificate,  together  with  the  written  assent  in  person  or  by 
proxy  of  two-thirds  in  interest  of  each  class  of  the  stockholders,  or  the  affidavit 
of  the  president  and  secretary  that  the  assent  of  two-thirds  in  interest  of  each 
class  of  stockholders  is  given  to  such  amendment,  shall  be  filed  in  the  office 

444 


DIGEST    OF   INCORPORATION    ACTS.  —  NEW   MEXICO. 

of  the  recorder  of  the  county  in  which  the  principal  place  of  business  of  such 
corporation  is  located,  and  in  the  office  of  the  Secretary  of  the  Territory  (sec.  30). 
The  board  of  directors  may  change  the  location  of  the  principal  office  of  such 
corporation  within  the  Territory  to  any  other  place  within  the  Territory  by 
resolution  adopted  at  a  regular  or  special  meeting  of  such  board  by  the  vote  of 
at  least  two-thirds  of  the  members  thereof.  No  certificate,  however,  is  neces- 
sary in  case  of  removal  of  the  office  from  one  point  to  another  in  the  same  town 
or  city.  Upon  the  adoption  of  the  resolution  as  aforesaid,  a  copy  thereof  shall 
be  filed  in  the  office  of  the  Secretary  of  the  Territory,  signed  by  the  president  and 
secretary  under  the  seal  of  the  corporation,  and  a  certified  cop}'  thereof  shall 
be  recorded  in  the  office  of  the  recorder  of  the  county  in  which  its  principal 
place  of  business  is  located  as  changed  (sec.  32). 

Special  provision  is  made  in  case  it  is  desired  to  decrease  capital.  This 
may  be  effected  by  retiring  or  reducing  any  class  of  the  stock,  or  by  drawing 
the  necessary  shares  by  lot  for  retirement,  or  by  the  surrender  by  every  share- 
holder of  his  shares  and  the  issue  to  him  in  lieu  thereof  of  a  decreased  number 
of  shares,  or  by  the  purchase  at  not  above  par  of  certain  shares  for  retirement, 
or  by  retiring  the  shares  owned  by  the  corporation,  or  by  reducing  the  par  value 
of  shares.  The  certificate  relative  to  the  decrease  of  capital  stock  must  be 
published  for  three  weeks  successively  at  least  once  in  each  week  in  a  news- 
paper published  in  the  county  in  which  the  principal  office  of  the  corporation  is 
located,  the  first  publication  to  be  made  within  fifteen  days  after  the  filing  of 
such  certificate,  and  in  default  thereof  the  directors  of  the  corporation  shall 
be  jointly  and  severally  liable  for  such  sums  as  they  shall  respectively  receive 
of  the  amount  so  reduced  (sec.  33). 

23.  Extension  of  Corporate  Existence.  —  Corporate  existence  may  be 
extended  to  any  period  of  time  desired  by  complying  with  the  statute  in  such 
case  made  and  provided.     (See  sec.  30.) 

24.  Dissolution.  —  Corporations  may  be  dissolved  by  any  corporation  be- 
fore the  paying  in  of  capital  stock  either  in  whole  or  in  part  (sec.  36).  Dissolu- 
tion after  organization  and  the  paying  in  of  all  the  capital  stock  may  only  be 
had  by  application  to.  the  courts  (sees.  60  to  67  inclusive).  Corporations  may 
surrender  the  charter  before  payment  of  any  part  of  the  capital  stock  (sec.  36). 
Corporations  may  be  voluntarily  dissolved  by  unanimous  written  consent  of 
the  stockholders  or  by  vote  of  two-thirds  of  the  stock  at  any  special  meeting 
called  for  that  purpose.  Such  action  or  consent  must  be  duly  certified  to  the 
Territorial  Secretary  and  the  certificate  of  dissolution  be  duly  published. 

2.5.    Annual  License  Tax.  —  There  is  no  annual  license  tax  imposed. 

26.  Foreign  Corporations.  —  Every  foreign  corporation  before  transact- 
ing business  in  the  Territory  must  file  in  the  office  of  the  Secretary  thereof  a 
certificate  of  its  charter  certified  by  the  proper  authority  of  the  foreign  State 
or  country  and  a  statement  of  the  amount  of  its  capital  stock  authorized,  and 
the  amount  actually  issued,  the  character  of  the  business  which  is  to  be  trans- 
acted in  the  Territory,  and  the  agent  therein,  who  must  be  a  domestic  corpora- 
tion or  a  natural  person  of  full  age  actual  resident  in  the  Territory,  together 
with  the  last  place  of  abode,  upon  which  agent  process  against  said  corporation 
may  be  served.  Upon  the  filing  of  such  copy  and  statement  the  Secretary  of 
the  Territory  shall  issue  to  such  corporation  a  certificate  that  it  is  authorized 
to  transact  business  in  the  Territory  (sec  102).  Within  thirty  days  after  the 
filing  of  the  above,  the  charter  must  be  published  in  some  newspaper  of  general 
circulation  in  the  county  wherein  resides  the  agent  of  the  foreign  corporation 

445 


DIGEST   OF   INCORPORATION   ACTS.  —  NEW   MEXICO. 

upon  whom  process  may  be  served.  Proof  of  such  publication  must  be  filed 
with  the  Secretary  of  the  Territory  within  twenty  days  after  the  date  of  the 
last  publication  (sec.  135).  Penalties  are  provided  to  the  extent  of  $200  for 
each  offence  (sees.  103  and  105;  see  also  sees.  99,  100,  101,  104,  and  106). 
Foreign  corporations  must  file  annual  reports  as  are  required  of  domestic  cor- 
porations. The  Secretary  of  the  Territory  charges  foreign  corporation  for  filing 
articles,  10  cents  per  thousand  dollars  of  its  authorized  capital  with  a  minimum 
charge  of  $25 ;  for  filing  statement  naming  agent,  $5 ;  for  making  certified  copy 
of  statement  naming  agent,  $1.50 ;  for  filing  proof  of  publication,  $5 ;  for  filing 
annual  report  after  the  first  year,  $1. 


446 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    YORK. 


NEW   YORK. 

(The  reference  below,  B.  C.  L.,  refers  to  the  Business  Corporations  Law,  chap.  4,  Consolidated 
Laws  of  1909.  The  reference  G.  C.  L.  refers  to  the  General  Corporation  Law,  chap.  23  of  Con- 
solidated Laws  of  1909.  The  reference  S.  C.  L.  refers  to  the  Stock  Corporation  Law,  chap. 
59,  Consolidated  Laws  of  1909.  The  reference  T.  L.  refers  to  the  Tax  Law,  chap.  60,  Con- 
solidated Laws  of  1909.     The  reference  C.  C.  P.  refers  to  the  Code  of  Civil  Procedure.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 

All  business  corporations,  excepting  public  service  corporations,  money  institu- 
tions, insurance  companies,  and  transportation  corporations,  are  formed  under 
the  Business  Corporations  Law  (chap.  4  of  the  Consolidated  Laws  of  1909). 
The  organization  of  such  corporations  is  further  regulated  and  governed  by  the 
General  Corporation  Law  (chap.  23  of  the  Consolidated  Laws  of  1909),  and  the 
Stock  Corporation  Law  (chap.  59  of  the  Consolidated  Laws  of  1909).  Special 
acts  are  provided  for  railway,  banking,  navigation,  stage-coach,  tramway,  pipe- 
line, gas,  electric  light,  water  works,  telegraph,  telephone,  turnpike,  plank  road 
and  bridge  companies,  banks,  insurance,  savings  and  loan  associations,  mortgage, 
loan,  safe  deposit  and  investment  companies.  (See  Laws  of  1890,  chap.  565, 
as  amended  by  Laws  of  1S92,  chap.  676;  Laws  of  1892,  chap.  6S9;  Laws  of 
1S90,  chap.  566;  Laws  of  1892,  chap.  690;  Laws  of  1907,  chap.  177,  310,  and 
975.)  Chapter  646  of  the  Laws  of  1907  provides  that  three  or  more  persons 
may  become  a  stock  corporation  for  any  lawful  business  purposes  or  purpose, 
other  than  a  moneyed  corporation  or  a  corporation  provided  for  by  the  banking, 
insurance,  and  transportation  laws  or  a  technical  institution  or  corporation 
which  may  be  incorporated  as  provided  in  the  university  law. 

2.  Incorporators. — Three  or  more  adult  persons.  Two-thirds  must  be 
citizens  of  the  United  States  and  at  least  one  a  resident  of  the  State  of  New 
York.  Each  incorporator  must  be  a  subscriber  for  one  or  more  shares  of  stock 
(B.  C.  L.,  sec.  2;   G.  C.  L.,  sec.  4). 

In  re  N.  Y.  L.  E.  &  W.  R.  R.  Co.,  35  Hun,  220;  99  N.  Y.  12;  King  v.  Barnes,  109  N.  Y. 
267. 

3.  Contents  of  Certificate  of  Incorporation  (Laws  of  1903,  chap.  525). 
—  The  certificate  must  set  forth : 

a.  Name.  —  The  name  must  not  conflict  with  that  of  any  existing  domestic 
corporation  or  of  any  foreign  corporation  authorized  to  do  business  in  the  State. 
The  words  "trust,"  "bank,"  "banking,"  "insurance,"  "assurance,"  "title," 
"indemnity,"  "guaranty,"  "guarantee,"  "savings,"  "investment,"  "loan,"  or 
"benefit,"  cannot  be  used  (G.  C.  L.,  sec.  6;   B.  C.  L.,  sec.  2). 

No  business  corporation  shall  be  authorized  to  do  business  in  this  State 
unless  its  name  has  such  words  affixed  or  prefixed  therein  or  thereto  as  will 
clearly  indicate  that  it  is  a  corporation  as  distinguished  from  a  natural  person, 
firm,  or  co-partnership.      (Laws  of  1911,  eh.  638.) 

b.  Purposes.  —  Any  number  of  objects  may  be  inserted  provided  they  are 
not  covered  by  the  special  acts  above  referred  to  (B.  C.  L.,  sec.  2). 

Wilson  v.  Tennent,  61  App.  Div.  100;  People  ex  rcl.  Fairchild  v.  Preston,  140  N.  Y.  549; 
U.  S.  Vinegar  Co.  v.  Foehrenbach,  148  N.  V.  58;    Chapman  v.  Lynch,  156  N.  V.  551. 

c.  Capital  Stock.  —  Amount  of  total  authorized  capital  stock  not  less  than 
$500.     If  any  proportion  be  preferred  stock,  the  preference  thereof  must  be  set 

447 


DIGEST    OF    INCORPORATION    ACTS. — NEW   YORK. 

forth  (B.  C.  L.,  sec.  2 ;  S.  C.  L.,  sec.  61).  A  provision  may  be  inserted  authoriz- 
ing the  issue  of  the  whole  or  any  part  of  the  capital  stock  as  partly  paid  stock, 
subject  to  calls  thereon  until  the  whole  thereof  shall  have  been  paid  in.  In  such 
case,  by  inserting  upon  the  stock  certificate  the  amount  paid  thereon,  the  holder 
is  exempt  from  any  liability  thereon,  except  for  the  payment  to  the  corporation 
of  the  amount  remaining  unpaid  upon  such  stock  and  for  the  statutory  liability 
to  employees  (S.  C.  L.,  sec.  60). 

d.  Shares.  —  Number  of  shares  with  the  par  value,  which  must  not  be  less 
than  $5  nor  more  than  $100  (B.  C.  L.,  sec.  2). 

e.  Amount  of  Capital  with  which  the  Corporation  will  begin  Business.  —  This 
must  not  be  less  than  $500  (B.  C.  L.,  sec.  2). 

/.    Domicile.  —  State  the  village  or  town  in  which  the  principal  business 

office  is  to  be  located.    If  in  New  York  City,  state  the  borough  (B.  C.  L., 

sec.  2). 

People  ex  rel.  Knickerbocker  Press  v.  Barker,  87  Hun,  341;  147  N.  Y.  715;  People  ex  rel. 
Edison  Electric  Light  Co.  v.  Barker,  91  Hun,  594. 

g.  Duration.  —  May  be  perpetual  if  desired  (B.  C.  L.,  sec.  2). 

h.    Directors.  —  Number  and  names  of  directors.     There  must  be  not  less 

than  three  directors,  and  the  names  and  post-office  addresses  of  the  directors 

for  the  first  year  must  be  set  forth  (B.  C.  L.,  sec.  2;  G.  C.  L.,  sec.  34;  B.  C.  L., 

sec.  25). 

Hamilton  Trust  Co.  v.  Clemes,  163  N.  Y.  423;  McDowell  v.  Sheehan,  129  N.  Y.  200; 
Davidson  v.  Westchester  Gas  Light  Co.,  99  N.  Y.  558. 

i.  Stock  Subscriptions  by  Incorporators.  —  Names  and  post-office  addresses 
of  the  incorporators,  and  a  statement  of  the  numbers  of  shares  of  stock  sub- 
scribed for  by  each  (B.  C.  L.,  sec.  2). 

Buffalo  &  Jamestown  R.  R.  Co.  v.  Gifford,  87  N.  Y.  294;  Yonkers  Gazette  Co.  v.  Taylor, 
30  App.  Div.  334. 

/.  Provisions  for  the  Regulation  of  the  Internal  Affairs  of  the  Corporation.  — 
The  certificate  may  contain  any  other  provision  for  the  regulation  of  the  busi- 
ness and  the  conduct  of  the  affairs  of  the  corporation  and  any  limitation  upon 
its  powers  or  upon  the  powers  of  its  directors  and  stockholders  which  does 
not  exempt  them  from  any  obligation  or  from  the  performance  of  any  duty 
imposed  by  law  (G.  C.  L.,  sec.  10).  The  provisions  which  are  hereby  specifi- 
cally authorized  by  statute  are  the  following:  clauses  permitting  the  corpora- 
tion to  cumulate  votes  in  the  election  of  directors  (G.  C.  L.,  24) ;  clause  permit- 
ting corporations  to  hold  and  dispose  of  stocks  and  bonds  of  other  corporations 
(S.  C.  L.,  sec.  52);  clause  allowing  the  issuance  of  partly  paid  stock  (S.  C.  L., 
sec.  60) ;  clauses  for  the  classification  of  directors  (S.  C.  L.,  sec.  25) ;  clause 
permitting  directors'  meetings  to  be  held  within  or  without  the  State  (B.  C.  L., 
sec.  2);  clauses  requiring  the  consent  of  more  than  two-thirds  in  interest  of 
the  stockholders  to  extend  corporate  existence  (G.  C.  L.,  sec.  37) ;  clause  dele- 
gating to  .directors  the  right  to  adopt  by-laws  (B.  C.  L.,  sec.  2;  G.  C.  L.,  sec. 
34);  clause  permitting  the  corporation  to  transact  business  in  other  States 
and  Territories  (G.  C.  L.,  sec.  14) ;  clause  permitting  directors  to  fix  a  quorum 
at  less  than  a  majority  of  the  board  (G.  C.  L.,  sec.  34).  The  Secretary  of  State 
permits  the  insertion  of  the  following  clause  relative  to  the  appointment  of 
an  executive  committee,  to  wit:  "The  board  of  directors  may,  by  means  of  a 
resolution  adopted  by  a  majority  of  the  whole  board  at  a  meeting  duly  called 

for  that  purpose,  designate directors  to  constitute  an  executive  committee, 

which  committee  shall  have  and  exercise  all  the  powers  and  rights  of  the  full 

448 


DIGEST    OF   INCORPORATION    ACTS.  —  NEW    YORK. 

board  of  directors  in  the  management  of  the  business  and  affairs  of  the  corpora- 
tion which  may  tx'  lawfully  delegated." 

Under  the  authority  of  Sheridan  E.  L.  Company  v.  Bank,  127  N.  Y.  517, 
and  Alcott  v.  Company,  27  N.  Y.  546,  there  can  be  no  doubt  that  the  board 
may  delegate  its  authority  to  such  a  committee. 

k.  Corporations  issuing  Stock  without  Pur  Value.  —  Issuance  of  shares  of 
stock  without  nominal  or  par  value.  Upon  the  formation  or  reorganization 
of  any  stock  corporation,  other  than  a  moneyed  corporation,  and  other  than  a  cor- 
poration under  the  jurisdiction  of  any  public  service  commission,  the  certificate 
of  incorporation  may  provide  for  the  issuance  of  the  shares  of  stock  of  such  cor- 
poration, other  than  preferred  stock  having  a  preference  as  to  principal,  without 
any  nominal  or  par  value,  by  stating  in  such  certificate: 

(1)  The  number  of  shares  that  may  be  issued  by  the  corporation,  and  if 
any  of  such  shares  be  preferred  stock,  the  preferences  thereof.  If  such  preferred 
stock  or  any  part  thereof  shall  have  a  preference  as  to  principal,  the  certificate 
shall  state  the  amount  of  such  preferred  stock,  having  such  preferences,  and 
the  amount  of  each  share  thereof,  which  shall  be  five  dollars  or  some  multiple 
of  five  dollars,  but  not  more  than  one  hundred  dollars. 

(2)  The  amount  of  capital  with  which  the  corporation  will  carry  on  business, 
which  amount  shall  not  be  less  than  the  amount  of  preferred  stock  (if  any) 
authorized  to  be  issued  with  a  preference  as  to  principal  and  in  addition  thereto 
a  sum  equivalent  to  five  dollars  or  to  some  multiple  of  five  dollars,  for  every  share 
authorized  to  be  issued  other  than  such  preferred  stock ;  but  in  no  event  shall  the 
amount  of  such  capital  be  less  than  five  hundred  dollars. 

Such  statements  in  the  certificate  shall  be  in  lieu  of  any  statements  pre- 
scribed by  the  law  under  which  the  corporation  shall  have  been  formed  or  re- 
organized as  to  the  amount  or  the  maximum  amount  of  its  capital  stock  or  the 
number  of  shares  into  which  the  same  shall  be  divided,  or  of  the  amount  or  the 
par  value  of  such  shares. 

Each  share  of  such  stock  without  nominal  or  par  value  shall  be  equal  to 
every  other  share  of  such  stock,  subject  to  the  preferences  given  to  the  preferred 
stock  if  any  authorized  to  be  issued.  Every  certificate  for  such  shares  without 
nominal  or  par  value  shall  have  plainly  written  or  printed  on  its  face  the 
number  of  such  shares  which  it  represents  and  the  number  of  such  shares  which 
the  corporation  is  authorized  to  issue,  and  no  such  certificate  shall  express  any 
nominal  or  par  value  of  such  shares.  The  certificates  for  preferred  shares  hav- 
ing a  preference  as  to  principal  shall  state  briefly  the  amount-  which  the  holders 
of  each  of  such  preferred  shares  shall  be  entitled  to  receive  on  account  of  prin- 
cipal from  the  surplus  assets  of  the  corporation  in  preference  to  the  holders  of 
other  shares,  and  shall  state  briefly  any  other  rights  or  preferences  given  to  the 
holders  of  such  shares. 

Such  corporation  may  issue  and  may  sell  its  authorized  shares,  from  time  to 
time,  for  such  consider.) lion  as  may  be  prescribed  in  the  certificate  of  incorpora- 
tion, or  as  from  time  to  time  may  be  fixed  by  t  he  Board  of  Directors  pursuant  to 
authority  conferred  in  such  certificate,  or  if  such  certificate  shall  not  so  pro- 
vide, then  by  the  consent  of  the  holders  of  two-thirds  of  each  class  of  shares 
then  outstanding  given  at  a  meeting  called  for  that  purpose  in  such  manner  as 
shall  be  prescribed  in  the  by-laws.  Any  and  all  shares  issued  as  permitted  by  this 
section  shall  be  deemed  fully  paid  and  non-assessable  and  the  holder  of  such 
shares  shall  not  be  liable  to  the  corporation  or  to  its  creditors  in  respect  thereof 
(Laws  of  1912,  chap.  351,  sec.  19). 

29  449 


DIGEST    OF   INCORPORATION   ACTS. — NEW   YORK. 

Commencement  of  Business.  —  No  corporation  formed,  pursuant  to 
section  nine  hereof,  shall  begin  to  carry  on  business  or  shall  incur  any  debts 
until  the  amount  of  capital  stated  in  its  certificate  of  incorporation  shall  have 
been  fully  paid  in  money,  or  in  property  taken  at  its  actual  value.  In  case  the 
amount  of  capital  stated  in  its  certificate  of  incorporation  shall  be  increased  as 
herein  provided,  such  corporation  shall  not  increase  the  amount  of  its  indebted- 
ness then  existing  until  it  shall  have  received  in  money  or  property  the  amount 
of  such  increase  of  its  stated  capital.  The  directors  of  the  corporation  assenting 
to  the  creation  of  any  debt  in  violation  of  this  section  shall  be  brought  under 
the  foregoing  provision  of  this  section  unless  within  one  year  after  the  debt  shall 
have  been  incurred  the  creditor  shall  have  served  upon  the  director  written 
notice  of  intention  to  hold  him  personally  liable  for  such  debt.  Any  director 
who,  because  of  any  such  liability  under  this  section,  shall  pay  any  debt  of  the 
corporation,  shall  be  subrogated  to  all  rights  of  the  creditor  in  respect  thereof 
against  this  corporation,  and  its  property,  and  also  shall  be  entitled  to  contribu- 
tion from  all  other  directors  of  the  corporation  similarly  liable  for  the  same  debt 
and  the  personal  representative  of  any  such  director  who  shall  have  died  before 
making  such  contribution. 

No  such  corporation  shall  declare  any  dividend  which  shall  reduce  the 
amount  of  its  capital  below  the  amount  stated  in  the  certificate  as  the  amount  of 
capital  with  which  the  corporation  will  begin  business.  In  case  any  such  divi- 
dend shall  be  declared,  the  directors  in  whose  administration  the  same  shall 
have  been  declared,  except  those  who  may  have  caused  their  dissent  therefrom 
to  be  entered  upon  the  minutes  of  such  directors  at  the  time  or  who  were  not 
present  when  such  action  was  taken,  shallj  be  liable  jointly  and  severally  to 
such  corporation  and  to  the  creditors  thereof  to  the  full  amount  of  any  loss  sus- 
tained by  such  corporation  or  by  its  creditors  respectively  by  reason  of  such 
dividend  (Laws  of  1912,  chap.  351,  sec.  20). 

Taxation.  —  The  organization  tax  payable  under  section  one  hundred  and 
eighty  of  the  tax  law  by  any  corporation  issuing  such  shares  without  designated 
monetary  value  shall  be  at  the  rate  of  five  cents  on  each  such  share  which  the 
corporation  is  authorized  to  issue,  and  a  like  tax  upon  any  subsequent  increase 
thereof.  The  tax  payable  under  section  two  hundred  and  seventy  of  the  tax  law 
in  respect  of  any  sale  or  agreement  of  sale  or  any  memorandum  of  sale  or  deliv- 
ery or  transfers  of  shares  or  certificates  of  any  share  without  designated  mone- 
tary value  hereafter  issued  by  any  such  corporation  issuing  such  shares  shall 
be  at  the  rate  of  two  cents  for  each  and  every  share  of  such  stock  so  transferred. 
The  franchise  tax  upon  any  corporation  issuing  such  shares  of  stock  payable 
under  section  one  hundred  and  eighty-two  of  the  tax  law  shall  be  determined 
by  the  amount  of  the  gross  assets  of  such  corporation  employed  in  any  business 
within  this  State,  less  .such  proportion  of  its  liabilities  as  shall  represent  the 
ratio  of  its  gross  assets  wherever  employed  in  business,  and  the  rate  of  such 
franchise  tax  shall  be  fixed  in  the  manner  provided  in  said  section  one  hundred 
and  eighty-two  of  the  tax  law.  For  this  purpose  the  rate  of  dividends  shall  be 
computed  by  dividing  the  total  amount  of  dividends  which  have  been  paid  during 
the  year  by  the  amount  of  assets  of  the  corporation  upon  the  first  day  of  such 
year  (Laws  of  1912,  chap.  351,  sec.  21). 

Increase  or  Reduction  of  Shares  or  Capital.  —  Any  corporation  formed 
or  reorganized  pursuant  to  section  nineteen  may  amend  its  certificate  of  incor- 
poration so  as  to  increase  or  to  reduce  the  number  of  shares  which  it  may  issue 
or  so  as  to  increase  or  to  reduce  the  amount  of  its  stated  capital,  by  filing,  in  the 
450 


DIGEST    OF   INCORPORATION    ACTS.  —  NEW   YORK. 

manner  provided  for  the  original  certificate  of  incorporation,  a  certificate  of  amend- 
ment under  seal  executed  by  its  president  or  vice-president  and  by  its  secretary  or 
its  treasurer,  stating  the  amendment  proposed  and  that  the  same  has  been  duly 
authorized  by  a  vote  of  a  majority  of  the  directors  and  also  by  the  vote  of  the 
holders  of  at  least  three-fifths  of  the  outstanding  shares  of  each  class  issued  by 
the  corporation,  at  a  meeting  of  the  stockholders  called  for  the  purpose  in  the 
manner  provided  in  section  sixty-three  hereof,  and  by  filing  with  such  certificate 
of  amendment  a  copy  of  the  proceedings  of  such  meeting,  made,  signed,  verified 
and  acknowledged  by  the  president  or  a  vice-president  and  by  the  secretary  or 
the  treasurer  of  the  corporation;  but  an  amendment  cannot  be  made  under  this 
section  unless  as  so  amended  the  certificate  of  incorporation  could  lawfully 
have  been  filed  under  section  nineteen  of  this  chapter.  In  case  of  a  reduction  of 
the  amount  of  capital  of  a  corporation,  a  certificate  setting  forth  the  whole 
amount  of  the  ascertained  debts  and  liabilities  of  the  corporation  shall  be  made, 
signed,  verified,  and  acknowledged  by  the  president  or  a  vice-president  and  by  the 
secretary  or  the  treasurer  of  the  corporation,  and  shall  be  filed  with  the  certifi- 
cate of  amendment;  and  such  certificate  of  amendment  shall  have  endorsed 
thereon  the  approval  of  the  comptroller  to  the  effect  that  as  so  stated  the  reduced 
amount  of  capital  is  sufficient  for  the  proper  puposes  of  the  corporation  and 
is  in  excess  of  its  ascertained  debts  and  liabilities  (Laws  of  1912,  chap.  351, 
sec.  19). 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of 
common  law  powers  (G.  C.  L  .  sec.  11),  the  statute  confers  the  following  addi- 
tional powers : 

To  purchase,  hold,  and  dispose  of  the  stock  and  bonds  and  other  evidences 
of  indebtedness  of  any  other  corporation  (S.  C.  L.,  sec.  52). 

Also  to  issue  in  exchange  therefor  its  own  stock  and  bonds  if  authorized 
so  to  do  by  a  provision  in  the  certificate  of  incorporation ;  or,  without  such 
provision  in  the  certificate,  if  the  corporation  whose  stock  is  so  purchased 
is  engaged  in  a  business  similar  to  that  of  the  holding  corporation,  or 
engaged  in  the  manufacture,  use,  or  sale  of  the  property,  or  in  the  construc- 
tion or  operation  of  works  necessary  or  useful  in  the  business  of  such  hold- 
ing corporation  or  in  which  or  in  connection  with  which  the  manufactured 
article,  produce,  or  property  of  the  holding  corporation  may  be  used,  or  is 
a  corporation  with  which  the  latter  is  authorized  to  consolidate  (S.  C.  L.,  sec. 
52). 

To  vote  by  proxy  (G.  C.  L.,  sec.  26). 
To  issue  preferred  stock  (S.  C.  L.,  sec.  61). 

To  enforce  a  lien  upon  the  stock  of  its  members  for  debts  due  the  corpora- 
tion (S.  C.  L.,  sec.  50). 

To  sell  stock  subscribed  for  non-payment  of  stock  subscriptions  (S.  C.  L., 
sec.  54). 

To  acquire  or  dispose  of  property  in  other  States  or  foreign  countries  (G.  C.  L., 
6ec.  14). 

To  consolidate  with  other  corporations  organized  to  carry  on  any  kind  of 
business  of  the  same  or  a  similar  nature  which  a  corporation  organized  under 
the  General  Act  might  carry  on  (S.  C.  L.,  sec.  9 ;  S.  C.  L.,  sec.  15 ;  B.  C.  L.,  sees. 
4.  8,  9,  10,  11,  12). 

To  provide  for  cumulative  voting  (G.  C.  L.,  sec.  24). 

To  delegate  the  right  to  directors  to  adopt  by-laws  (B.  C.  L.,  sec.  2 ;  G.  C.  L., 
:*4). 

451 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    YORK. 

To  fix  a  quorum  of  directors  less  than  a  majority  of  the  board  (G.  C.  L., 
sec.  34). 

To  classify  directors  (S.  C.  L.,  sec.  25). 

To  issue  stock  in  exchange  for  property  (S.  C.  L.,  sec.  55). 

To  sell  all  the  corporate  assets  (S.  C.  L.,  sec.  15;  S.  C.  L.,  sees.  16,  17). 

To  guarantee  bonds  of  other  domestic  corporations  engaged  in  the  same 
line  of  business  (S.  C.  L.,  sec.  8). 

Voting  trusts  limited  to  five  years  are  permitted  (G.  C.  L.,  sec.  25). 

To  borrow  money  and  mortgage  and  pledge  the  corporate  assets  (S.  C.  L., 
sec.  6). 

5.  Procuring  the  Charter.  —  The  certificate  of  incorporation  must  be 
acknowledged  by  each  of  the  incorporators  before  some  officer  authorized  to 
administer  oaths.  It  must  then  be  filed  and  recorded  in  the  office  of  the  Secre- 
tary of  State.  A  certified  copy  of  the  certificate  or  a  duplicate  original,  together 
with  the  receipt  of  the  State  Treasurer  for  payment  of  the  organization  tax, 
must  be  filed  and  recorded  in  the  office  of  the  county  clerk  of  the  county  where 
the  principal  place  of  business  of  the  corporation  is  to  be  located  (B.  C.  L.,  sec. 
2;  G.  C.  L.,  sec.  4,  5). 

People  ex  rel.  Blossom  v.  Nelson,  46  N.  Y.  477;  Raisbeok  v.  Oesterricher,  4  Abb.  New 
Cases,  434;  People  ex  rel.  v.  Rice,  128  N.  Y.  591;  28  N.  E.  251;  Lamming  v.  Galusha,  81 
Hun,  247;  30  N.  Y.  S.  767;  aff'd  151  N.  Y.  648;  45  N.  E.  1032;  Union  S.  Co.  v.  City  of 
Buffalo,  82  N.  Y.  351;  N.  Y.  Car  Oil  Co.  v.  Richmond,  6  Bosw.  213;  Western  Transportation 
Co.  v.  Schen,  19  N.  Y.  408;  Oswego  Starch  Factory  v.  Olloway,  21  N.  Y.  449;  Jessup  v,  Car- 
negie, 80  N.  Y.  441;  Eaton  v.  Aspinwall,  19  N.  Y.  121;  Card  v.  Moore,  68  App.  Div.  327; 
People  v.  O'Brien,  101  App.  Div.  296;    91  N.  Y.  Sup.  649. 

6.  Corporate  Indebtedness.  —  There  is  no  limitation  upon  the  amount 
of  indebtedness  which  a  corporation  may  incur.  The  capital  stock  cannot, 
however,  be  reduced  below  the  amount  of  the  corporation's  debts  and  liabilities 
(S.  C.  L.,  sec.  62).  All  corporate  mortgages  except  purchase-money  mortgages 
must  be  consented  to  by  the  holders  of  not  less  than  two-thirds  of  the  capital 
stock  of  the  corporation,  which  consent  shall  be  given  either  in  writing  or  by 
vote  at  a  special  meeting  of  the  stockholders  called  for  that  purpose  upon  the 
same  notice  as  is  required  for  the  annual  meeting  of  the  corporation,  and  a 
certificate  under  the  seal  of  the  corporation  that  such  consent  was  given  by  the 
stockholders  in  writing  or  that  it  was  given  by  a  vote  at  a  meeting  as  aforesaid, 
shall  be  subscribed  and  acknowledged  by  the  president  or  vice-president  and  by 
the  secretary  or  assistant  secretary  of  the  corporation,  and  shall  be  filed  and 
recorded  in  the  office  of  the  clerk  or  register  of  the  county  wherein  the  corpora- 
tion has  its  principal  place  of  business.  When  authorized  by  such  consent,  the 
directors  may  confer  on  the  holders  of  any  debt  secured  by  such  mortgage  the 
right  to  convert  the  principal  thereof  after  two,  and  not  more  than  twelve  years 
after  the  date  of  the  mortgage  into  stock  of  the  corporation  (S.  C.  L.,  sec.  6). 

Strong  v.  R.  R.  Co.,  93  N.  Y.  426. 

7.  Organization  Tax.  —  One-twentieth  of  one  per  cent  upon  the  amount 
of  capital  stock  which  the  corporation  is  authorized  to  have,  and  a  like  tax 
upon  any  subsequent  increase  provided  that  in  no  case  shall  the  tax  be  less 
than  $5.  This  tax  is  due  and  payable  upon  the  incorporation  of  such  corpora- 
tion. Neither  the  Secretary  of  State  nor  the  county  clerk  where  the  certifi- 
cate of  incorporation  is  filed  is  permitted  to  file  the  same  until  they  have  been 
furnished  a  receipt  showing  the  payment  of  the  organization  tax  from  the  State 
Treasurer,  and  no  such  corporation  shall  have  or  exercise  any  corporate  fran- 
chises or  powers,  nor  carry  on  business  in  the  State  until  such  tax  shall  have 

452 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    YORK. 

been  paid.  In  ease  of  a  decrease  of  capital  stock  upon  which  the  tax  required 
by  law  has  been  paid,  and  the  subsequent  increase  thereof,  a  tax  shall  be  paid 
only  upon  so  much  of  such  increase  as  exceeds  the  amount  of  capital  stock 
upon  winch  the  tax  has  been  before  paid.  In  case  of  the  consolidation  of  ex- 
isting corporations  into  a  corporation,  such  new  corporation  shall  be  required 
to  pay  the  tax  herein  provided  for  only  upon  the  amount  of  its  capital  slock 
in  excess  of  the  aggregate  amount  of  capital  stock  of  such  corporations  (Laws 
of  1910,  chap.  472). 

People  ex  rel.  Eickemeyer  Field  Co.  v.  Rice,  138  N.  Y.  614;  People  v.  R.  R.  Co  L29 
N.  V.  474;    People  v.  R.  R.  Co.,  129  N.  Y.  654;  In  re  C.  K.  C.  S.  &  R.  Co.,  13  App.  Div.  50. 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State  for  filing 
certificate  of  incorporation,  $10;  for  recording,  15  cents  per  folio;  for  certified 
copy  of  articles,  15  cents  per  folio,  and  $1  additional  for  certificate,  under  the 
Great  Seal  of  the  State;  for  recording  certificate  of  payment  of  capital  stock, 
15  cents  per  folio ;  to  the  County  Clerk  for  filing  certificate,  6  cents,  and  for 
recording,  10  cents  per  folio.  For  recording  certificate  of  consolidation,  $10 
(Laws  of  1907,  chap.  213;   Laws  of  1909,  chap.  23,  sec.  26). 

9.  Commencing  Business.  —  At  least  $500  of  stock  must  be  subscribed 
before  the  corporation  may  begin  business.  Before  any  corporation  can  incur 
debts  the  amount  of  capital  specified  in  the  certificate  of  incorporation  as  the 
amount  of  capital  with  which  the  corporation  will  begin  business  must  have 
been  paid  in,  either  in  money  or  in  property.  One-half  of  the  stock  must  be 
paid  in,  either  in  money  or  property,  within  one  year.  Within  thirty  days  after 
such  payment  a  certificate  duly  signed  and  verified  by  a  majority  of  the  direct- 
ors and  the  president  or  vice-president  and  the  secretary  or  treasurer  must  be 
filed  with  the  Secretary  of  State  and  with  the  clerk  of  the  county  in  which  the 
principal  office  is  located.  If  one-half  the  capital  is  not  paid  in  within  one 
year,  the  charter  is  subject  to  forfeiture  (B.  C.  L.,  sec.  5).  The  charter  is  sub- 
ject to  forfeiture  if  use  is  not  made  of  the  corporate  franc hises  within  two 
years  after  incorporation  (B.  C.  L.,  sees.  2,  3;  S.  C.  L.,  sec.  55;  G.  C.  L., 
sec.  36). 

People  v.  B.  S.  &  C.  Co.,  131  N.  Y.  140;  People  v.  U.  &  D.  R.  R.  Co.,  128  N.  Y.  240;  Denike 
v.  N.  Y..  etc.  Lime  Co.,  80  N.  Y.  599;  Matter  Brooklyn  El.  R.  H.  Co.,  125  N.  Y.  434;  Hard- 
man  v.  Sage,  124  N.  Y.  25;  Vedder  v.  Mudgett,  95  N.  Y.  295;  Brown  v.  Smith,  13  Hun,  408; 
80  N.  Y.  650. 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  State,  and  within  two  years  after  the  date  of  incorporation  (G.  C.  L., 
sec.  ,36).  At  this  meeting  all  the  incorporators  and  stockholders  should  sign 
written  waivers  of  notice  of  the  meeting  and  consent  to  the  holding  of  the 
same.  If  such  waivers  cannot  be  obtained,  notices  of  the  organization  meet- 
ing will  have  to  be  given  in  the  same  manner  as  is  provided  by  statute 
relative  to  calling  annual  meeting  of  stockholders  (G.  C.  L.,  sec.  43;  S.  C.  L., 
sec.  25).  At  the  organization  meeting  of  the  directors  the  inspectors  of  the 
first  election  of  directors  and  of  all  previous  meetings  of  the  stockholders  prior 
to  the  annual  meeting,  shall  be  appointed  by  the  board  of  directors  named  in 
the  certificate  of  incorporation  (S.  C.  L.,  sec.  31). 

11.  Meetings  of  Stockholders  and  Directors.  —  While  there  are  no 
statutory  requirements  as  to  holding  either  stockholders'  or  directors'  meetings 
within  the  State,  it  is  the  general  practice  as  well  as  unquestionably  the  only 
safe  practice  to  hold  all  stockholders'  meetings  within  the  State.  (See  Ormsby 
v.   Company,    56  N.  Y.  62)5.)     If  meetings  of  the  board  of  directors  are  to  be 

45-3 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW   YORK. 

held  only  in  New  York,  the  certificate  or  by-laws  must  so  provide  (B.  C.  L., 
sec.  2,  sub.  9). 

The  corporation  may  by  its  by-laws  fix  the  amount  of  stock  which  must  be 
represented  at  meetings  of  the  stockholders  in  order  to  constitute  a  quorum 
(G.  C.  L.,  sec.  11).  Unless  otherwise  provided  in  the  certificate  of  incorpora- 
tion, every  stockholder  of  record  of  a  stock  corporation  shall  be  entitled  at 
every  meeting  of  the  corporation  to  one  vote  for  every  share  of  stock  standing 
in  his  name  on  the  books  of  the  corporation ;  and  at  every  meeting  of  a  non- 
stock corporation,  every  member,  unless  disqualified  by  the  by-laws,  shall  be 
entitled  to  one  vote.  The  stockholders  of  a  stock  corporation,  by  a  by-law 
adopted  by  vote  at  any  annual  meeting,  or  at  any  special  meeting  duly  called 
for  such  purpose,  may  prescribe  a  period  not  exceeding  forty  days  prior  to  meet- 
ings of  the  stockholders,  during  which  no  transfer  of  stock  on  the  books  of  the 
corporation  may  be  made.  Except  in  cases  of  express  trust  or  in  which  other 
provision  shall  have  been  made  by  written  agreement  between  the  parties, 
the  record  holder  of  stock  which  shall  be  held  by  him  as  security,  or  which 
shall  actually  belong  to  another  upon  demand  therefor  and  payment  of  neces- 
sary expenses  thereof,  shall  issue  to  such  pledgor  or  to  such  actual  owner  of 
such  stock  a  proxy  to  vote  thereon.  The  certificate  of  incorporation  cf  any 
stock  corporation  may  provide  that  at  all  elections  of  directors  of  such  corpora- 
tion, each  stockholder  shall  be  entitled  to  as  many  votes  as  shall  equal  the 
number  of  his  shares  of  stock  multiplied  by  the  number  of  directors  to  be  elected, 
and  that  he  may  cast  all  of  such  votes  for  a  single  director  or  may  distribute 
them  among  the  number  to  be  voted  for,  or  any  two  of  them  as  he  may  see 
fit,  which  right,  when  exercised,  shall  be  termed  cumulative  voting.  The  stock- 
holders of  a  corporation  heretofore  formed,  who,  by  the  provisions  of  laws 
existing  on  April  30,  1891,  were  entitled  to  the  exercise  of  such  right,  may  here- 
after exercise  such  right  according  to  the  provisions  of  this  section.  A  stock- 
holder may,  by  agreement  in  writing,  transfer  his  stock  to  any  person  or 
persons  for  the  purpose  of  vesting  in  him  or  them  the  right  to  vote  thereon 
for  a  time  not  exceeding  five  years  upon  terms  and  conditions  stated,  pursuant 
to  which  said  person  or  persons  shall  act;  every  other  stockholder,  upon  his 
request  therefor,  may  by  a  like  agreement  in  writing  also  transfer  his  stock  to 
the  same  person  or  persons,  and  thereupon  may  participate  in  the  terms,  con- 
ditions, and  privileges  of  such  agreement ;  the  certificates  of  stock  so  trans- 
ferred shall  be  surrendered  and  cancelled,  and  certificates  therefor  issued  to 
Buch  transferee  or  transferees  in  which  it  shall  appear  that  they  are  issued  pur- 
suant to  such  agreement ;  and  in  the  entry  of  such  transferee  or  transferees  as 
owners  of  such  stock  in  the  proper  books  of  said  corporation  that  fact  shall 
also  be  noted,  and  thereupon  he  or  they  may  vote  upon  the  stock  so  transferred 
during  the  time  in  such  agreement  specified;  a  duplicate  of  every  such  agree- 
ment shall  be  filed  in  the  office  of  the  corporation  where  its  business  is  trans- 
acted and  be  open  to  the  inspection  of  any  stockholder  daily,  during  business 
hours.  No  member  of  a  corporation  shall  sell  his  vote  or  issue  a  proxy  to 
vote  to  any  person  for  any  sum  of  money  or  anything  of  value.  The  books 
and  papers  containing  the  record  of  membership  of  the  corporation  shall  be 
produced  at  any  meeting  of  its  members,  upon  the  request  of  any  member. 
If  the  right  to  vote  at  any  such  meeting  shall  be  challenged,  the  inspectors  of 
election  or  other  persons  presiding  thereat  shall  require  such  books,  if  they  can 
be  had,  to  be  produced  as  evidence  of  the  right  of  the  person  challenged  to 
vote  at  such  meeting,  and  all  persons  who  may  appear  from  such  books  to  be 

454 


DIGEST    OF    INCORPORATION   ACTS.  —  NEW    YORK. 

members  of  the  corporation  may  vote  at  such  meeting,  in  person  or  by  proxy, 
subject  to  the  provisions  of  this  chapter  (G.  C.  L.,  sec.  23). 

Every  member  of  a  corporation,  except  a  religious  corporation,  entitled  to 
vote  at  any  meeting  thereof  may  so  vote  by  proxy.  No  officer,  clerk,  teller,  or 
bookkeeper  of  a  corporation  formed  under  or  subject  to  the  banking  law  shall 
act  as  proxy  for  any  stockholder  at  any  meeting  of  any  such  corporation.  Every 
proxy  must  be  executed  in  writing  by  the  member  himself  or  by  his  duly  author- 
ized attorney.  No  proxy  hereafter  made  shall  be  valid  after  the  expiration  of 
eleven  months  from  the  date  of  its  execution  unless  the  member  executing  it 
shall  have  specified  therein  the  length  of  time  it  is  to  continue  in  force,  which 
shall  be  for  some  limited  period.  Every  proxy  shall  be  revocable  at  the  pleas- 
ure of  the  person  executing  it ;  but  a  corporation  having  no  capital  stock 
may  prescribe  in  its  by-laws  the  persons  who  may  act  as  proxies  for  mem- 
bers, and  the  length  of  time  for  which  proxies  may  be  executed  (G.  C.  L., 
sec.  26). 

If  the  directors  shall  not  be  elected  on  the  day  designated  in  the  by-laws  or 
by-law,  the  corporation  shall  not  for  that  reason  be  dissolved,  but  every  di- 
rector shall  continue  to  hold  office  and  discharge  his  duties  until  his  successor 
has  been  elected  (G.  C.  L.,  sec.  28). 

The  directors  of  every  stock  corporation  shall  be  chosen  at  the  time  and 
place  fixed  by  the  by-laws  of  the  corporation  by  a  plurality  of  the  votes  at  such 
election.  Each  director  shall  be  a  stockholder  unless  otherwise  provided  in  the 
certificate,  or  in  a  by-law  adopted  by  a  stockholders'  meeting.  Vacancies  in 
the  board  of  directors  shall  be  filled  in  the  manner  prescribed  in  the  by-laws. 
Notice  of  the  time  and  place  of  holding  any  election  of  directors  shall  be  given 
by  publication  thereof  at  least  once  in  each  week  for  two  successive  weeks 
immediately  preceding  such  election,  in  a  newspaper  published  in  the  county 
where  such  election  is  to  be  held,  and  in  such  other  manner  as  may  be  pre- 
scribed in  the  by-laws.  Policy  holders  of  an  insurance  corporation  shall  be 
eligible  to  election  as  directors.  At  least  one-fourth  in  number  of  the  directors 
of  every  stock  corporation  shall  be  elected  annually  (S.  C.  L.,  sec.  25).  Inspectors 
of  election  shall  be  appointed  in  the  manner  prescribed  in  the  by-laws.  No 
director  or  officer  of  a  moneyed  corporation  shall  be  eligible  or  act  as  an  inspector. 
Each  inspector  shall  be  entitled  to  receive  a  reasonable  compensation  for  his 
services,  to  be  paid  by  the  corporation,  and  if  any  inspector  shall  refuse  to 
i'  or  neglect  to  attend  at  the  election,  or  his  office  become  vacant,  the  stock- 
holders may  appoint  an  inspector  in  his  place  unless  the  by-law  otherwise  pro- 
vide.  The  inspectors  appointed  to  act  at  the  meeting  of  the  stockholders  shall, 
before  entering  upon  the  discharge  of  their  duty,  be  sworn  to  faithfully  execute 
all  the  duties  of  inspectors  at  said  meeting  with  strict  impartiality  and  accord- 
ing to  the  best  of  their  ability,  and  the  oath  so  taken  shall  be  subscribed  by 
them,  and  immediately  filed  in  the  office  of  the  clerk  of  the  county  in  which 
such  election  shall  be  held  with  the  certificate  of  the  result  of  the  vote  taken 
thereat  (S.  C.  L.,  sec.  31). 

Ormsby  v.  V.  C.  M.  Co.,  26  N.  Y.  623. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  —  Min- 
imum number  of  directors  under  the  statute  are  three.  At  least  one-fourth  of 
them  must  be  elected  annually.  They  must  all  be  stockholders  unless  otherwise 
provided  in  the  certificate  of  incorporation  or  in  the  by-laws.  At.  least  one  of 
them  must  be  a  resident  of  New  York  (B.  C.  L.,  sec.  2 ;  G.  C.  L.,  sec.  34  ;  S.  C  L., 

455 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    YORK. 

sec.  25).  They  may  be  classified  if  desired.  Inspectors  of  elections  are  provided 
for  (S.  C.  L.,  sec.  31).  Cumulative  voting  is  permitted  if  authorized  by  the 
certificate  of  incorporation  (G.  C.  L.,  sec.  24).  Directors  have  power  to  adopt 
by-laws  for  their  own  government  subject  to  the  provisions  of  the  by-laws 
adopted  by  the  stockholders ;  this  too,  in  the  absence  of  express  power  to  that 
effect  conferred  in  the  certificate  of  incorporation  (G.  C.  L.,  sees.  11,  34).  In 
the  certificate  of  incorporation  power  may  be  given  to  the  directors  to  adopt 
all  by-laws  for  the  government  of  the  corporation  (B.  C.  L.,  sec.  2;  G.  C.  L., 
sec.  10).  Unless  otherwise  provided  by  law,  a  majority  of  the  board  of  directors 
of  a  corporation  at  a  meeting  duly  assembled  shall  be  necessary  to  constitute  a 
quorum  for  the  transaction  of  business,  and  the  act  of  a  majority  of  the  directors 
at  a  meeting  at  which  a  quorum  shall  be  present  shall  be  the  act  of  the  board 
of  directors.  The  stockholders  may  in  the  by-laws  fix  the  number  of  directors 
necessary  to  constitute  a  quorum  at  a  number  less  than  a  majority  of  the  board, 
but  at  least  equal  to  one-third  of  such  board  (G.  C.  L.,  sec.  34).  The  act  pro- 
vides that  no  by-law  adopted  by  the  board  of  directors  regulating  the  election 
of  directors  or  officers  shall  be  valid  unless  published  for  at  least  once  a  week 
for  two  successive  weeks  in  a  newspaper  in  the  county  where  the  election  is  to 
be  held  and  at  least  thirty  days  before  such  election  (G.  C.  L.,  sec.  11;  see 
Wood  v.  Knapp,  100  N.  Y.  10). 

Marshall  v.  Ind.  Federation,  84  N.  Y.  Sup.  866;  Joseph  v.  Raff,  176  N.  Y.  611;  68  N.  E. 
1118. 

b.  Liabilities.  —  Directors  are  jointly  and  individually  liable  to  the  corpo- 
ration and  its  creditors  for  making  unauthorized  dividends  or  for  withdrawing 
or  in  any  way  paying  to  the  stockholders  or  any  of  them  any  part  of  the  capital 
or  for  reducing  the  capital  stock  in  any  unauthorized  way,  the  loss  sustained 
by  any  such  unlawful  action  being  the  measure  of  their  liability  (S.  C.  L.,  sec. 
28;  such  action  is  also  a  misdemeanor  under  the  Penal  Law,  sec.  664).  But 
any  director  absent  from  the  meeting  where  such  unlawful  action  was  taken, 
or  if  present,  causing  his  dissent  from  such  action  to  be  entered  en  the  minutes 
at  large,  is  not  liable  therefor  (S.  C.  L.,  sec.  28). 

Directors  and  officers  are  jointly  and  severally  personally  liable  for  making 
loans  to  stockholders,  for  discounting  any  note  or  other  evidence  of  debt  for 
stockholders,  or  for  receiving  the  same  in  payment  in  whole  or  in  part  due  or 
to  become  due  on  any  stock  in  the  corporation,  or  for  receiving  or  discounting 
any  note  or  other  evidence  of  debt  to  enable  any  stockholder  to  withdraw  any 
part  of  the  money  paid  in  by  him  on  his  stock  (S.  C.  L.,  sec.  29).  The  directors 
and  officers  involved  shall  jointly  and  severally  be  personally  liable  to  the  ex- 
tent of  such  loan  and  interest  for  all  debts  of  the  corporation  contracted  before 
payment  of  the  said  loan,  and  to  the  full  amount  of  the  notes  and  other  evi- 
dences of  debt  so  received  or  discounted  with  interest  from  the  time  such  liability 
accrued  (S.  C.  L.,  sec.  29).  Such  unlawful  action  is  also  a  misdeameanor  under 
Penal  Law,  sec.  664. 

Directors  and  officers  making  transfers  of  the  corporate  property  to  officers, 
directors,  or  stockholders  for  the  payment  of  debt  or  in  inducement  of  insolvency, 
or  in  event  of  insolvency,  with  intent  to  prefer  or  defraud  creditors,  shall  be  per- 
sonally liable  to  the  stockholders  and  creditors  of  the  corporation  to  the  full 
extent  of  any  loss  sustained  (S.  C.  L.,  sec.  66). 

Directors  and  officers  are  also  jointly  and  severally  personally  liable  for  any 
reports  or  published  notice  made  by  them  which  shall  be  false  in  any  material 
respect,  to  the  amount  of  damage  sustained  by  the  stockholders  or  creditors 

456 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    YORK. 

acting  upon  the  faith  thereof.  Action  must  be  brought  within  two  years  from 
the  time  any  such  report  was  so  made  (S.  C.  L.,  sec.  35).  Directors  and  officers 
making  or  concurring  in  such  false  reports  are  guilty  of  a  misdemeanor  (Penal 
Law,  sec.  665).  Any  officers  or  directors  having  custody  or  control  of  the  stock- 
books  of  the  corporation  wilfully  neglecting  or  refusing  to  make  any  proper 
entry  as  required  by  law  or  refusing  an  inspection  thereof  to  any  person  en- 
titled by  law  to  inspect  the  same,  are  guilty  of  a  misdemeanor  (Penal  Law  . 
sec.  665). 

A  director  is  deemed  to  have  such  knowledge  of  the  corporate  affairs  as  to 
enable  him  to  determine  whether  any  act,  proceeding,  or  omission  of  the  board 
to  which  he  belongs  is  in  violation  of  the  Penal  Law  relating  to  directors,  and 
if  in  violation  thereof  he  must,  to  prevent  or  escape  liability  therefor,  cause  or 
in  writing  require  his  dissent  to  be  entered  on  the  minutes  of  the  directors.  Or, 
if  absent  from  the  particular  meeting,  he  will  nevertheless  be  held  liable  for  any 
violations  of  the  Penal  Law  occurring  thereat  —  if  they  appear  upon  the  minutes 
—  unless  he  ceases  being  a  stockholder  within  six  months  thereafter  or  other- 
wise causes  or  requires  his  dissent  to  be  entered  on  the  minute  within  that  period 
(Penal  Law,  sec.  667).  Officers  neglecting  or  refusing  to  make  annual  report 
within  ten  days  after  written  request  by  a  stockholder  or  creditor  shall  forfeit 
to  the  people  the  sum  of  $50  for  every  day  they  shall  neglect  or  refuse  (S.  C.  L., 
sec.  34).  Under  section  90  of  the  General  Corporation  Law,  actions  may  be 
maintained  against  the  directors  of  a  business  corporation  (1)  compelling  them 
to  account  for  their  official  conduct  including  any  neglect  or  failure  to  perform 
their  duties  in  the  management  and  disposition  of  the  funds  and  property  com- 
mitted to  their  charge;  (2)  compelling  them  to  pay  to  the  corporation  which 
they  represent  or  to  its  creditors  any  money  and  the  value  of  any  property 
which  they  have  acquired  to  themselves  or  transferred  to  others,  or  lost  or 
wasted  by  or  through  any  neglect  or  failure  to  perform,  or  by  other  violation 
of  their  duties. 

United  Growers'  Co.  v.  Eisner,  22  App.  Div.  1;  Chem.  Nat.  Bank  v.  Colwell,  132  N.  Y. 
250;  Beardsley  v.  Johnson,  121  N.  Y.  224;  In  re  Newcomb,  42  St.  Rep.  442;  Matter  of 
Elias,  17  Misc.  718;    Sinclair  v.  Fuller,  158  N.  Y.  607. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  personally  liable  to 
creditors  to  an  amount  equal  to  the  amount  of  unpaid  stock  held  by  them  for 
debts  of  the  corporation  contracted  while  such  stock  was  held  by  them,  and 
are  jointly  and  severally  liable  for  all  debts  due  or  owing  to  laborers  or  servants 
or  employees  other  than  contractors,  provided  written  notice  of  intention  to 
enforce  such  liability  is  given  within  thirty  days  after  termination  of  the  services 
rendered  (S.  C.  L.,  sees.  56,  59).  Every  corporation  formed  under  this  chapter 
may  be  or  become  a  full  liability  corporation  by  inserting  a  statement  in  the 
certificate  of  incorporation  that  the  corporation  thereby  formed  is  intended  to 
be  a  full  liability  corporation;  and  in  case  of  an  existing  corporation,  which  is 
not  a  full  liability  corporation,  it  may  become  such  by  filing  in  the  office  where 
certificates  of  incorporation  are  required  to  be  filed  a  supplemental  certificate 
stating  thai  thereafter  the  corporation  intends  to  be  a  full  liability  corporation, 
which  certificate  shall  be  executed  and  acknowledged  by  the  president  and  treas- 
urer of  the  corporation  or  by  the  board  of  directors,  and  shall  have  annexed 
thereto  a  copy  of  a  resolution,  adopted  by  a  two-thirds  vote  of  the  board  of 
directors,  and  the  written  consent  of  all  the  stockholders  of  the  corporation 
authorizing  and  consenting  to  the  change  of  the  corporation  to  a  full  liability 
corporation.     If  the  corporation  is  formed  as  or  becomes  a  full  liability  corpo- 

457 


DIGEST    OF    INCORPORATION    ACTS. NEW    YORK. 

ration,  all  the  stockholders  of  the  corporation  shall  be  severally  individually 
liable  to  its  creditors  for  all  its  debts  and  liabilities  and  may  be  joined  as  defend- 
ants in  any  action  against  it.  No  execution  shall  issue  against  any  stockholder 
individually  until  execution  has  issued  against  the  corporation  and  returned 
unsatisfied,  and  all  the  stockholders  shall  contribute  a  proportionate  share,  ac- 
cording to  the  number  of  shares  of  stock  owned  by  each  of  the  amount  paid  by 
any  stockholder  on  a  judgment  recovered  against  him  individually  for  a  debt 
of  the  corporation,  and  he  may  recover  from  the  other  stockholders  in  the 
corporation  in  a  joint  or  several  action  the  proper  portion  due  by  them  and 
each  of  them  of  the  amount  paid  by  him  on  any  such  judgment  (B.  C.  L., 
sec.  6). 

Billings  v.  Robinson,  94  N.  Y.  415;  Weeks  v.  Love,  50  N.  Y.  568;  Tucker  v.  Gilman, 
121  N.  Y.  189;  24  N.  E.  302;  Close  v.  Potter,  155  N.  Y.  145;  Herbert  v.  Duryea,  34  App. 
Div.  478;  Bristor  v.  Smith,  158  N.  Y.  157;  White,  Corbin,  &  Co.  v.  Jones,  45  App.  Div.  241; 
Natl.  Tube  Works  v.  Gillan,  124  N.  Y.  302;  Sinclair  v.  Fuller,  158  N.  Y.  607;  Moosburger 
v.  Walsh,  89  Hun,  564;  Walton  v.  Coe,  110  N.  Y.  109;  Cochran  v.  Wiechers,  119  N.  Y. 
399. 

14.  Stock  Certificates.  —  Stock  certificates  must  be  signed  by  the  presi- 
dent or  vice-president,  and  by  the  secretary  or  treasurer  (S.  C.  L.,  sec.  50). 
Stock  certificates  are  not  transferable  without  the  consent  of  the  corporation, 
until  all  indebtedness  to  the  corporation  has  been  paid  (S.  C.  L.,  sec.  51).  The 
par  value  of  shares  may  be  any  amount  not  less  than  $5  nor  more  than  SI 00 
(B.  C.  L.,  sec.  2,  sub.  4).  There  is  hereby  imposed  and  shall  immediately  accrue 
and  be  collected  a  tax,  as  herein  provided,  on  all  sales,  or  agreements  to  sell  or 
memoranda  of  sales  of  stock,  and  upon  any  and  all  deliveries  or  transfers  of 
shares  or  certificates  of  stock,  in  any  domestic  or  foreign  association,  com- 
pany or  corporation,  made  after  the  first  day  of  June,  1905,  whether  made 
upon  or  shown  by  the  books  of  the  association,  company  or  corporation,  or 
by  any  assignment  in  blank,  or  by  any  delivery,  or  by  any  paper  or  agreement 
or  memorandum,  or  other  evidence  of  sale  or  transfer,  whether  intermediate  or 
final,  and  whether  investing  the  holder  with  the  beneficial  interest  in  or  legal 
title  to  said  stock,  or  merely  with  the  possession  or  use  thereof,  for  any  purpose 
or  to  secure  the  future  payment  of  money,  or  the  future  transfer  of  any  stock, 
on  each  hundred  dollars  of  face  value  or  fraction  thereof,  two  cents.  It  shall  be 
the  duty  of  the  person  or  persons  making  or  effectuating  the  sale  or  transfer  to 
procure  and  affix  the  stamps  and  pay  the  tax  provided  by  this  article.  It  is  not 
intended  by  this  act  to  impose  a  tax  upon  an  agreement  evidencing  the  deposit- 
ing of  stock  certificates  as  collateral  security  for  money  loaned  thereon,  which 
stock  certificates  are  not  actually  sold,  nor  upon  such  stock  certificates  so  de- 
posited, nor  upon  mere  loans  of  stock  or  the  return  thereof.  The  payment  of 
such  tax  shall  be  denoted  by  an  adhesive  stamp  or  stamps  affixed  as  follows :  In 
the  case  of  a  sale  or  transfer  where  the  evidence  of  the  transaction  is  shown  only 
by  the  books  of  the  association,  company  or  corporation,  the  stamp  shall  be 
placed  upon  such  books,  and  it  shall  be  the  duty  of  the  person  making  or  effectu- 
ating such  sale  or  transfer  to  procure  and  furnish  to  the  association,  company  or 
corporation,  the  requisite  stamps,  and  of  such  association,  company,  or  corpora- 
tion to  affix  and  cancel  the  same.  Where  the  transaction  is  effected  by  the  deliv- 
ery or  transfer  of  a  certificate,  the  stamp  shall  be  placed  upon  the  surrendered 
certificate;  and  in  cases  of  an  agreement  to  sell,  or  where  the  sale  is  effected  by 
delivery  of  the  certificate  assigned  in  blank  there  shall  be  made  and  delivered  by 
the  seller  to  the  buyer,  a  bill  or  memorandum  of  such  sale,  to  which  the  stamp 
provided  for  by  this  article  shall  be  affixed.  Every  such  bill  or  memorandum  of 
458 


DIGEST   OF   INCORPORATION   ACTS. NEW    YORK. 

sale  or  agreement  to  sell  shall  show  the  date  of  the  transaction  which  it  evidences, 
the  name  of  the  seller,  the  stock  to  which  it  relates,  and  the  number  of  shares 
thereof;  and  no  further  tax  is  hereby  imposed  upon  the  delivery  of  the  certifi- 
cates of  stock,  or  upon  the  actual  issue  of  a  new  certificate  when  the  original 
certificate  of  stock  is  accompanied  by  the  duly  stamped  memorandum  of  sale  as 
herein  provided  (sees.  270  to  280  as  amended  by  Laws  of  1912,  chap.  292). 

Reno  Oil  Co.  v.  Culver,  60  App.  Div.  129;  Yonkers  Gazette  Co.  v.  Taylor.  30  App.  Div. 
334;  sullivan  County  Club  i».  Butler,  20  N.  Y.  Misc.  306;  Reyder  v.  Bushwick  R.  R.  Co., 
134  N.  Y.  83. 

15.  Preferred  Stock.  —  Preferred  stock  may  be  issued  if  the  certificate 
of  incorporation  so  provides,  or  by  consent  of  the  holders  of  two-thirds  of  the 
capital  stock  given  at  a  meeting  duly  called  for  that  purpose.  The  corporation 
may,  upon  the  written  request  of  the  holders  of  preferred  stock  by  a  two-thirds 
vote  of  its  directors,  exchange  the  same  for  common  stock  (S.  C.  L.,  sec.  61). 
Every  domestic  stock  corporation  may  issue  preferred  stock  and  common  stock 
and  different  classes  of  preferred  stock,  if  the  certificate  of  incorporation  so  pro- 
vides, or  by  the  consent  of  the  holders  of  records  of  two-thirds  of  the  capital 
stock,  given  at  a  meeting  called  for  that  purpose  upon  notice  such  as  is  required 
for  the  annual  meeting  of  the  corporation.  A  certificate  of  the  proceedings  of 
such  meeting,  signed  and  sworn  to  by  the  president  or  a  vice-president  and  by 
the  secretary  or  assistant  secretary  of  the  corporation,  shall  be  filed  and  recorded 
in  the  offices  where  the  original  certificate  of  incorporation  of  such  corporation 
was  filed  and  recorded;  and  the  corporation  may,  upon  the  written  request  of 
the  holders  of  any  preferred  stock,  by  a  two-thirds  vote  of  its  directors,  exchange 
the  same  for  common  stock,  and  issue  certificates  for  common  stock  therefor, 
upon  such  valuation  as  may  have  been  agreed  upon  in  the  certificate  of  organi- 
zation of  such  corporation,  or  the  issue  of  such  preferred  stock,  or  share  for 
share,  but  the  total  amount  of  such  capital  stock  shall  not  be  increased  thereby. 

Hinckley  v.  Company,  91  X.  Y.  Sup.  893;  45  X.  Y.  Misc.  Rep.  176;  Campbell  v.  A.  Z. 
Co.,  122  X.  Y.  455;  Kent  v.  O.  M.  Co.,  78  X.  Y.  159;  Mich.  Bank  v.  X.  Y.  &  N.  11.  R.  R. 
Co.,  13  X.  Y.  599;    Ernst  v.  Company,  24  N.  Y.  Misc.  583. 

16.  Payment  of  Capital  Stock.  —  Corporations  cannot  issue  stock  except 
for  money,  labor  done,  or  property  actually  received  for  the  use  or  lawful  pur- 
poses of  the  corporation.  The  statute  provides  further  that  in  the  absence  of 
fraud  in  the  transaction  the  judgment  of  the  directors  as  to  the  value  of  prop- 
erty so  purchased  shall  be  conclusive  (S.  C.  L.,  sec.  55).  The  original  or  amended 
certificate  of  incorporation  may  contain  a  provision  expressly  authorizing  the 
sale  of  the  whole  or  any  part  of  the  capital  stock  as  partly  paid  stock  subject 
to  calls  thereon  until  the  whole  thereof  shall  have  been  paid  in.  In  such  case, 
if  in  or  upon  the  certificate  issued  to  represent  said  stock  the  amount  paid  thereon 
shall  be  specified,  the  holder  thereof  shall  not  be  subject  to  any  liability  except 
for  the  payment  to  the  corporation  of  the  amount  remaining  unpaid  upon  such 
stock  and  for  the  payment  of  indebtedness  to  employees.  In  any  such  case  the 
corporation  may  declare  and  may  pay  dividends  upon  the  basis  of  the  amounts 
actually  paid  upon  the  respective  shares  of  stock,  instead  of  upon  the  par  value 
thereof  (S.  C.  L.,  sec.  60).  If  the  whole  capital  stock  shall  not  have  been  sub- 
scribed at  the  time  of  filing  the  certificate  of  incorporation,  the  directors  named 
in  the  certificate  may  open  books  of  subscription  to  fill  up  the  capital  stock  at. 
the  time  of  subscribing.  Every  stockholder  whose  subscription  is  payable  in 
money  shall  pay  to  the  directors  ten  per  cent  upon  the  amount  subscribed  by 
him  in  cash,  and  no  such  certificate     ball  be  received  without  such  payment. 

■I.V.I 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW    YORK. 

(S.  C.  L.,  sec.  61 ;    see  also  S.  C.  L.,  sec.  54,  as  to  forfeiture  of  stock  for  non- 
payment of  subscription). 

White  Corbin,  &  Co.  v.  Jones,  167  N.  Y.  158;  60  N.  E.  422;  Martin  v.  Company,  95 
Ann  Uiv  'l8"  88  N  Y.  Sup.  573;  O.  D.  C.  M.  Co.  v.  Lewisohn,  136  Fed.  915;  McBnde  v. 
Farr'in-ton  131  Fed.  797;  F.  C.  N.  Bank  v.  Shire,  179  N.  Y.  587;  72  N.  E.  1141;  Close  v. 
Noye,  147  N.  Y.  597;  Rafferty  v.  Company,  37  App.  Div.  618;  Herbert  v.  Duryea,  34  App. 
Div.  478;  Drake  v.  Company,  26  App.  Div.  499. 

17.  Books.  —  Every  corporation  must  keep  at  its  office  within  the  State 
correct  books  of  account  of  all  its  business  transactions,  and  also  a  stock  book 
containing  an  alphabetical  list  of  the  stockholders  of  the  corporation,  showing 
their  places  of  residence  and  the  number  of  shares  held  by  them  respectively, 
the  time  when  they  respectively  became  owners  thereof,  and  the  amount  paid 
thereon  (S.  C.  L.,  sec.  32).  The  stock  book  is  open  to  the  inspection  of  stock- 
holders and  judgment  creditors.  Every  person,  firm,  company,  association,  or 
corporation  engaged  in  whole  or  in  part  in  the  making  or  negotiating  of  sales, 
agreements  to  sell,  deliveries  or  transfers  of  shares  or  certificates  of  stock,  or 
conducting  or  transacting  a  brokerage  business,  shall  keep  or  cause  to  be  kept 
at  some  accessible  place  within  the  State  of  New  York,  a  true  and  just  book  of 
account,  in  such  form  as  may  be  prescribed  by  the  Comptroller,  wherein  shall 
be  plainly  and  legibly  recorded,  in  separate  columns,  the  date  of  making  of  every 
sale,  agreement  to  sell,  delivery  or  transfer  of  shares  or  certificates  of  stock,  the 
name  of  the  stock  and  the  number  of  shares  thereof,  the  face  value  of  the  stock, 
the  name  of  the  seller  or  transferror,  the  name  of  the  purchaser  or  transferee, 
and  the  number  and  face  value  of  the  adhesive  stamps  affixed  as  provided  for 
by  section  two  hundred  and  seventy  of  this  chapter. 

Every  association,  company  or  corporation  shall  keep  or  cause  to  be  kept  at 
some  accessible  place  within  the  State  of  New  York,  a  stock  certificate  book 
and  a  just  and  true  book  of  account,  transfer  ledger  or  register,  in  such  form  as 
may  be  prescribed  by  the  Comptroller,  wherein  shall  be  plainly  and  legibly  re- 
corded in  separate  columns,  the  date  of  making  of  every  transfer  of  stock,  the 
name  of  the  stock,  and  the  number  of  shares  thereof,  the  serial  number  of  each 
surrendered  certificate,  the  name  of  the  party  surrendering  such  certificate,  the 
serial  number  of  the  certificate  issued  in  exchange  therefor,  the  number  of  shares 
covered  by  said  certificate,  the  name  of  the  party  to  whom  said  certificate  was 
issued,  and  the  number  and  face  value  of  the  adhesive  stamps  affixed,  as  pro- 
vided by  section  two  hundred  and  seventy  of  this  chapter.  It  shall  also  retain 
and  keep  all  surrendered  or  cancelled  shares  or  certificates  of  its  stock  and  all 
memoranda  relating  to  the  sale  or  transfer  of  any  thereof. 

All  such  books  of  account,  transfer  ledgers,  registers  and  stock  certificate 
books  shall  be  retained  and  kept  as  aforesaid  for  a  period  of  at  least  two  years 
subsequent  to  the  date  of  the  last  entry  made  therein  as  herein  required;  and  all 
such  surrendered  or  cancelled  shares  or  certificates  of  stock  and  memoranda  re- 
lating to  the  sale  or  transfer  of  stock  shall  be  retained  and  kept  for  a  period  of  at 
least  two  years  from  the  date  of  the  delivery  thereof.  For  the  purpose  of  as- 
certaining whether  the  tax  imposed  by  this  article  has  been  paid,  all  such  books 
of  account,  transfer  ledgers,  registers,  stock  certificate  books,  surrendered  or 
cancelled  share  or  certificates  of  stock  and  memoranda  relating  to  the  sale  or 
transfer  thereof,  shall  at  all  times  between  the  hours  of  ten  o'clock  in  the  fore- 
noon and  three  o'clock  in  the  afternoon,  except  Saturdays,  Sundays  and  legal 
holidays,  be  open  to  examination  by  the  Comptroller  or  his  duly  authorized  rep- 
resentative.   The  Comptroller  may  enforce  his  right  to  examine  such  books  of 

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DIGEST   OF    INCORPORATION   ACTS. NEW    YORK. 

account  and  bills  or  memoranda  of  sale  or  transfer;  and  such  transfer  ledger, 
register  and  stock  certificate  books  and  surrendered  or  cancelled  shares  or  cer- 
tificates of  stock  by  mandamus.  If  the  Comptroller  ascertains  that  the  tax  pro- 
vided for  in  this  article  has  not  been  paid,  he  shall  bring  an  action  in  his  name  as 
such  Comptroller,  in  any  court  of  competent  jurisdiction,  for  the  recovery  of  such 
tax  and  for  any  penalty  incurred  by  any  person  under  the  provisions  of  t  his  art  icle. 

Every  person,  firm,  company,  association  or  corporation  who  shall  fail  to 
keep  such  book  of  account,  or  bills  or  memoranda  of  sale  or  transfer,  or  transfer 
ledger,  register  or  stock  certificate  book,  or  surrendered  or  cancelled  shares  of 
certificates  of  stock  as  herein  required,  or  who  alters,  cancels,  obliterates  or 
destroys  any  part  of  said  records,  or  makes  any  false  entry  therein,  or  who  shall 
refuse  to  permit  the  Comptroller  or  any  of  his  authorized  representatives  freely 
to  examine  any  of  said  books,  records  or  papers  at  any  of  the  times  herein  pro- 
vided, or  who  shall  in  any  other  respect  violate  any  of  the  provisions  of  this 
section,  shall  be  deemed  guilty  of  a  misdemeanor  and  on  conviction  thereof  shall 
for  each  and  every  such  offense  pay  a  fine  of  not  less  than  five  hundred  dollars 
nor  more  than  five  thousand  dollars,  or  be  imprisoned  not  less  than  three  months, 
nor  more  than  two  years,  or  both,  in  the  discretion  of  the  court  (sec.  276,  as 
amended  by  Laws  of  1912,  chap.  292). 

Matter  of  Steinway,  159  N.  Y.  250;    53  N.  E.  1103. 

18.  Office.  —  Every  corporation  must  maintain  a  domiciliary  office  within 
the  State  (B.  C.  L.,  sec.  2;  Tax  Laws,  sec.  11). 

Conroe  v.  Company,  10  How,  Pr.  405;  Rossie  Iron  Works  v.  Westbrook,  36  N.  Y.  St. 
Rep.  555. 

19.  Reports.  —  All  domestic  business  corporations  must  annually  during 
the  month  of  January,  or,  if  doing  business  without  the  United  States,  before 
the  month  of  May,  make  a  report  as  of  the  1st  day  of  January,  which  will  state : 
(1)  The  amount  of  its  capital  stock  and  proportion  actually  issued.  (2)  The 
amount  of  its  debts  or  an  amount  which  they  do  not  exceed.  (3)  The  amount 
of  its  assets  or  an  amount  which  its  assets  at  least  equal.  (4)  The  names  and 
addresses  of  all  of  the  directors  and  officers  of  the  company,  and,  in  the  case 
of  a  foreign  corporation,  the  name  also  of  a  person  designated  in  the  manner 
prescribed  by  the  Code  of  Civil  Procedure  as  the  person  upon  whom  process 
against  the  corporation  may  be  served  within  the  State  (S.  C.  L.,  sec.  34).  Such 
report  to  be  made  by  the  president  or  vice-president,  secretary  or  treasurer,  and 
filed  in  the  office  of  the  Secretary  of  State.  If  such  report  is  not  made  and 
filed,  any  officer  of  the  corporation  who  shall  thereafter  neglect  or  refuse  to 
make  and  file  such  report  within  ten  days  after  written  request  so  to  do 
shall  have  been  made  by  a  stockholder  or  a  creditor  of  the  corporation,  shall 
forfeit  to  the  people  the  sum  of  $50  for  every  day  he  shall  so  neglect  or 
refuse.  In  addition  to  the  foregoing  the  corporation  is  required  between  No- 
vember 1st  and  15th  to  make  an  annual  report  to  the  State  Comptroller  showing 
the  condition  of  the  business  on  October  31st  of  that  year,  stating  the  amount 
of  the  capital  stock  paid  in,  the  amount  of  its  dividends  declared  during  the 
year  ending  October  31st  of  that  year,  the  amount  of  its  entire  capital,  and  the 
percentage  thereof  employed  within  the  State  during  the  preceding  year.  This 
report  must  be  signed  and  sworn  to  by  the  president,  vice-president,  secretary, 
or  treasurer  (S.  C.  L.,  sec.  34;  Tax  Laws,  sec.  192).  After  each  annual  election 
of  directors  a  certificate  of  the  result  of  such  election  made  by  the  inspectors 
must  be  filed,  with  the  oath  of  the  inspectors,  in  the  office  of  the  clerk  of  the 

461 


DIGEST    OF    INCORPORATION    ACTS.  —  NEW   YORK. 

county  in  which  the  election  is  held  (S.  C.  L.,  sec.  31 ;  see  Union  Nat.  Bank  v. 
Scott,  53  App.  Div.  65 ;  see  also  S.  C.  L.,  sec.  69).  The  president  or  other  proper 
officer  of  every  moneyed  or  stock  corporation  deriving  an  income  or  profit  from 
its  capital  or  otherwise  shall,  on  or  before  June  15th,  deliver  to  one  of  the  asses- 
sors of  the  tax  district  in  which  the  company  is  liable  to  be  taxed,  and,  if  such 
tax  district  is  in  a  county  embracing  a  portion  of  the  forest  preserve,  to  the 
Comptroller  of  the  State,  a  written  statement  specifying: 

1.  The  real  property,  if  any,  owned  by  such  company,  the  tax  district  in 
which  the  same  is  situated,  and,  unless  a  railroad  corporation,  the  sums  actually 
paid  therefor;  2.  The  capital  stock  actually  paid  in  and  secured  to  be  paid 
in,  excepting  therefrom  the  sums  paid  for  real  property  and  the  amount  of 
such  capital  stock  held  by  the  State  and  by  any  incorporated  literary  or  chari- 
table institution;  and  3.  The  tax  district  in  which  the  principal  office  of  the 
company  is  situated,  or,  in  case  it  has  no  principal  office,  the  tax  district  in 
which  its  operations  are  carried  on. 

Such  statement  shall  be  verified  by  the  officer  making  the  same  to  the 
effect  that  it  is  in  all  respects  just  and  true.  If  such  statement  is  not  made 
within  twenty  days  after  the  15th  day  of  June,  or  is  insufficient,  evasive,  or 
defective,  the  assessors  may  compel  the  corporation  to  make  a  proper  state- 
ment by  mandamus  (Tax  Law,  Consolidated  Laws  of  1909,  chap.  60,  sec.  27) . 

Stockholders  owning  five  per  centum  of  the  capital  stock  of  any  corporation 
other  than  a  moneyed  corporation,  not  exceeding  $100,000,  or  three  per  centum 
where  it  exceeds  $100,000,  may  demand  a  written  statement  of  its  affairs  un- 
der oath,  embracing  a  particular  account  of  all  its  assets  and  liabilities,  and 
the  treasurer  shall  make  such  statement  and  deliver  it  to  the  person  present- 
ing the  request  within  thirty  days  thereafter,  and  keep  on  file  for  twelve  months 
thereafter  a  copy  of  such  statement,  which  shall  at  all  times  during  business 
hours  be  exhibited  to  any  stockholder  demanding  an  examination  thereof; 
but  the  treasurer  or  such  chief  fiscal  officer  shall  not  be  required  to  deliver 
more  than  one  such  statement  in  any  one  year.  The  Supreme  Court  or  any 
justice  thereof  may  upon  application,  for  good  cause  shown,  extend  the  time 
for  making  and  delivering  such  certificate.  For  every  neglect  or  refusal  of  the 
treasurer  or  other  chief  fiscal  officer  thereof  to  comply  with  the  provisions  of 
this  section,  he  shall  forfeit  and  pay  to  the  person  making  such  request  the  sum 
of  $50,  and  the  further  sum  of  $10  for  every  twenty-four  hours  thereafter  until 
such  statement  shall  be  furnished  (S.  C.  L.,  sec.  69). 

H  B  Co  v  Hand,  104  App.  Div.  390;  93  N.  Y.  Sup.  834;  Davidson  v.  Whithouse,  94 
N.  Y.  Sup.  428. 

20.  Anti-Trust  Statute.  —  The  Anti-Trust  Act  of  New  York  is  to  be 
found  in  Laws  of  1909,  chap.  25,  sees.  340-346;   Laws  of  1910,  chap.  394. 

Matter  of  Davies,  168  N.  Y.  89;  61  N.  E.  118;  People  v.  Milk  Exchange,  133  N.  Y.  565; 
30  N.  E.  850. 

21.  Statutory   Grounds    for    Forfeiture   of   Charter.  —  Charters  may  be 

forfeited  for  failure  to  organize  and  commence  the  transaction  of  corporate 

business  or  the  discharge  of  corporate  duties  within  two  years  from  the  date 

of  incorporation  (G.  C.  L.,  sec.  36) ;    also  if  one-half  the  capital  stock  is  not 

paid  in  within  one  year  (B.  C.  L.,  sec.  5) ;    also  for  failure  to  pay  the  annual 

State  tax  within  one  year  from  the  time  a  statement  of  the  tax  is  sent  to  it 

(Tax  Law,  sec.  203;    see  also  General  Corporation  Law,  sees.  130-136). 

Day  v.  Company,  107  N.  Y.  129;  13  N.  E.  765;  People  v.  Company,  133  N.  Y.  140;  29 
N.  E.  947. 

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DIGEST    OF    INCORPORATION    ACTS.  —  NEW    YORK. 

22.  Annual  Franchise  Tax.  —  For  the  privilege  of  doing  business  or 
exercising  its  corporate  franchises  in  this  State,  every  corporation,  foreign  or 
domestic,  doing  business  in  the  State  must  pay  to  the  State  Treasurer  annually 
in  advance  an  annual  license  tax  to  be  computed  upon  the  basis  of  the  amount 
of  its  capital  employed  during  the  preceding  year  within  the  State,  and  upon 
each  dollar  of  such  amount.  The  measure  of  the  amount  of  capital  stock 
employed  in  this  State  shall  be  such  a  proportion  of  the  issued  capital  stock  as 
the  gross  assets  employed  in  any  business  within  this  State  bears  to  the  gross 
assets  wherever  employed  in  business.  For  purposes  of  taxation  the  capital 
of  a  corporation  invested  in  the  stock  of  another  corporation  shall  be  deemed 
to  be  assets  located  where  the  physical  property  represented  by  such  stock  is 
located.  If  the  dividends  upon  the  capital  stock  amount  to  six  or  more  than 
six  per  cent  upon  the  par  value  of  the  capital  stock  during  any  year  ending  with 
the  31st  day  of  October,  the  tax  shall  be  at  the  rate  of  one-fourth  of  a  mill  for 
each  one  per  cent  of  any  dividend  made  or  declared  upon  the  par  value  of  the 
capital  stock  during  such  year.  If  such  dividend  or  dividends  amount  to  less 
than  six  per  cent  of  the  par  value  of  the  capital  stock,  and  (1)  the  assets  do  not 
exceed  liabilities,  exclusive  of  capital  stock;  or  (2)  the  average  price  at  which 
such  stock  sold  during  said  year  did  not  equal  or  exceed  its  par  value;  or  (3) 
if  no  dividend  was  declared,  —  then  each  dollar  of  the  amount  of  capital  stock 
employed  in  this  State,  determined  as  hereinbefore  provided,  shall  be  taxed  at 
the  rate  of  three-fourths  of  one  mill.  If  such  dividend  or  dividends  amount  to 
less  than  six  per  cent  of  the  par  value  of  the  capital  stock,  and  (1)  the  assets 
exceed  the  liabilities  exclusive  of  capital  stock  by  an  amount  equal  to  or  greater 
than  the  par  value  of  the  capital  stock;  or  (2)  the  average  price  at  which  said 
stock  sold  during  such  year  is  equal  to  or  greater  than  the  par  value,  —  then  the 
amount  of  capital  stock  determined  as  hereinbefore  provided  to  be  employed  in 
this  State  shall  be  taxed  at  the  rate  of  one  and  one-half  mills  on  each  dollar 
of  the  valuation  of  the  capital  stock  employed  in  this  State ;  but  such  valuation 
shall  not  be  less  than  (1)  the  par  value  of  such  stock;  (2)  the  difference  be- 
tween the  assets  and  liabilities  exclusive  of  capital  stock;  (3)  the  average 
price  at  which  such  stock  sold  during  said  year.  If  such  corporation,  joint 
stock  company,  or  association  shall  have  more  than  one  kind  of  capital  stock, 
and  upon  one  of  such  kinds  of  stock  a  dividend  or  dividends  amounting  to 
six  or  more  than  six  per  cent  upon  the  par  value  thereof  has  been  declared, 
and  upon  the  other  no  dividend  has  been  made  or  declared,  or  the  dividend 
or  dividends  made  or  declared  thereon  amounted  to  less  than  six  per  cent  upon 
the  par  value  thereof,  then  the  tax  shall  be  at  the  rate  of  one-fourth  of  a  mill  for 
each  one  per  cent  of  dividends  declared  upon  the  capital  stock  upon  the  par 
value  of  which  the  dividends  declared  amount  to  six  or  more  than  six  per 
cent,  and  in  addition  thereto  a  tax  shall  be  charged  upon  the  capital  stock, 
(1)  upon  any  dividend  so  made  or  declared;  or  (2)  upon  which  the  dividend 
or  dividends  made  or  declared  did  not  amount  to  six  per  cent  on  the  par 
value,  at  the  rate  as  hereinbefore  provided  for  the  taxation  of  capital  stock 
upon  which  no  dividend  was  made  or  declared,  or  upon  which  the  dividend 
or  dividends  made  or  declared  did  not  amount  to  six  per  cent  on  the  par  value 
(Tax  Law,  sec.  182). 

Under  section  182  of  the  Tax  Law,  all  corporations  not  taxable  under  the 
foregoing  shall  be  taxed  in  an  amount  not  less  than  what  would  be  produced 
by  a  tax  of  one  and  one-half  mills  on  each  one  dollar  of  the  actual  value  of  its 
capital  stock  determined  to  be  employed  in  this  State,  or  at  one  and  one-half 

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DIGEST    OF    INCORPORATION    ACTS.  —  NEW   YORK. 

mills  on  each  dollar  of  said  capital  stock  at  the  average  price  at  which  said  stock 
sold  during  the  year. 

Laundry  corporations,  manufacturing  corporations,  to  the  extent  only  of 
the  capital  actually  employed  in  this  State  in  manufacturing  and  in  the  sale 
of  the  product  of  such  manufacture,  mining  corporations  wholly  engaged  in 
mining  ores  within  this  State,  agricultural  and  horticultural  societies  or  associa- 
tions and  corporations,  shall  be  exempt  from  the  payment  of  the  franchise  tax. 
But  such  laundrying,  manufacturing,  or  mining  corporation  shall  not  be  exempt 
from  the  payment  of  such  tax  unless  at  least  forty  per  cent  of  the  capital  stock 
of  such  corporation  is  invested  in  property  in  this  State  and  used  by  it  in  its 
laundrying,  manufacturing,  or  mining  business  in  this  State  (Tax  Law,  sec.  183). 
If  the  dividend  or  dividends  amount  to  less  than  six  per  cent  of  the  par 
value  of  the  capital  stock,  or  no  dividend  is  declared,  the  president,  treasurer, 
or  secretary  of  the  corporation  shall,  under  oath,  between  the  1st  and  15th 
days  of  November  in  each  year  estimate  and  appraise  the  capital  stock  of 
such  corporation  at  its  actual  value.  If  the  Comptroller  is  not  satisfied  with 
such  appraisal,  he  is  authorized  to  make  a  valuation  thereof  and  settle  an 
account  upon  the  valuation  so  made  by  him  and  the  taxes,  penalties,  and 
interest  to  be  paid  the  State  (Tax  Law,  sec.  193).  If  an  application  be  filed 
with  the  Comptroller  by  the  corporation  against  whom  the  account  is  stated, 
or  by  the  Attorney-General  within  one  year  after  such  account  shall  have  been 
audited  and  stated,  the  Comptroller  may  at  any  time,  upon  notice  thereof, 
sent  to  the  corporation  against  whom  it  is  stated,  revise  and  readjust  such 
account  (Tax  Law,  sec.  198).  (See,  as  to  taxation  of  stock  having  no  par 
value,  Laws  of  1912,  chap.  351,  sec.  19.) 

People  ex  rel.  U.  V.  C.  Co.  v.  Roberts,  156  N.  Y.  585;  People  ex  rel.  E.  E.  L.  Co.  v.  Camp- 
bell, 138  N.  Y.  543;  People  ex  rel.  A.  C.  &  D.  Co.  v.  Wemple,  129  N.  Y.  558;  People  ex  rel. 
B.  R.  T.  Co.  v.  Morgan,  57  App.  Div.  335;  People  ex  rel.  Am.  Sur.  Co.  v.  Campbell,  74  Hun, 
101;  143  N.  Y.  625;  People  ex  rel.  Klipstein  v.  Roberts,  36  App.  Div.  597;  167  N.  Y.  617; 
People  ex  rel.  Am.  Soda  F.  Co.  v.  Roberts,  158  N.  Y.  168. 

23.  Amendments.  —  If  the  certificate  of  incorporation  contains  any  mat- 
ter not  authorized  by  law  to  be  stated  therein,  or  if  the  proof  or  acknowledg- 
ment thereof  shall  be  defective,  either  the  incorporators  or  directors  of  the 
corporation  may  make  and  file  an  amended  certificate  correcting  such  infor- 
mality or  defect  or  striking  out  such  unauthorized  matter.  The  Supreme 
Court  may,  upon  due  cause  shown  and  proof  made,  and  upon  notice  to  the 
Attorney-General  and  such  other  persons  as  the  court  may  direct,  and  upon 
such  terms  and  conditions  as  it  may  impose,  amend  any  certificate  of  incor- 
poration which  fails  to  express  the  true  object  and  purpose  of  the  certificate 
so  as  to  truly  set  forth  such  object  and  purpose  (G.  C.  L.,  sec.  7). 

To  change  the  corporate  name  requires  a  petition  to  the  Supreme  Court, 
special  term,  held  in  the  judicial  district  in  which  the  corporation's  principal 
business  office  is  situated.  The  petition  must  have  annexed  thereto  a  certifi- 
cate of  the  Secretary  of  State  that  the  name  which  such  corporation  proposes 
to  assume  is  not  the  name  of  any  other  domestic  corporation.  The  petition 
must  be  in  writing,  signed  and  verified  in  like  manner  as  a  pleading  by  an  officer 
of  the  corporation  (usually  the  president),  and  must  specify  the  present  name 
of  the  corporation  as  well  as  the  name  it  proposes  to  assume.  Notice  of  the 
presentation  of  the  petition  to  the  court  must  be  published  once  in  each  week 
for  six  successive  weeks  in  two  newspapers.  A  copy  of  the  petition  and  notice 
of  motion  must  be  filed  with  the  Secretary  of  State  prior  to  the  commencement 
of  publication  of  such  notice.    If  the  court  is  satisfied  that  the  petition  should  be 

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DIGEST    OF    INCORPORATION    ACTS.  —  NEW    YORK. 

granted,  it  then  makes  an  order  authorizing  the  petitioner  to  assume  the  name 
proposed  on  a  day  specified  not  less  than  thirty  days  after  the  entry  of  the 
order.  The  order  and  the  papers  on  which  it  was  granted  must  be  filed  within 
ten  days  thereafter  in  the  clerk's  office  of  the  county  in  which  the  original  certifi- 
cate of  incorporation  was  filed,  and  a  certified  copy  of  such  order  must  witliin 
ten  days  after  the  entry  thereof  be  filed  in  the  office  of  the  Secretary  of  State. 
Such  order  must  also  direct  the  publication  witliin  ten  days  after  the  entry 
thereof  of  the  order  in  a  designated  newspaper  once  in  each  week  for  four  suc- 
cessive weeks.  If  the  order  is  fully  complied  with,  and  if  within  forty  days 
after  the  making  of  the  order  an  affidavit  to  the  publication  thereof  shall  be 
filed  and  recorded  in  the  office  in  which  the  order  is  entered,  and  in  each  office 
in  which  certified  copies  are  required  to  be  filed,  if  any,  the  petitioner  shall,  on 
and  after  the  day  specified  for  that  purpose  in  the  order,  be  known  by  its  new 
corporate  name  (General  Corporation  Laws,  sees.  60-65). 

To  change  the  number  of  directors  requires  the  vote  of  a  majority  of  the 
stock  of  the  corporation  at  a  meeting  held  at  the  usual  place  of  meeting  of  the 
directors,  on  two  weeks'  notice  in  writing  to  each  stockholder  of  record.  Such 
notice  may  be  served  personally  or  by  mail.  Proof  of  the  service  of  such  notice 
shall  be  filed  in  the  office  of  the  corporation  at  or  before  the  time  of  such  meet- 
ing. The  proceedings  of  such  meeting  shall  be  entered  in  the  minutes  of  such 
corporation,  and  transcript  thereof  verified  by  the  president  and  secretary  of  the 
meeting  shall  be  filed  in  the  office  where  the  original  certificates  of  incorporation 
were  filed.  Such  change  in  the  directorate  may  also  be  effected  by  unanimous 
consent  without  a  meeting;  in  which  case  there  shall  be  filed  in  the  offices 
above  specified  the  unanimous  consent  of  the  stockholders  in  writing  signed 
by  them  or  by  their  proxies,  to  which  must  be  attached  an  affidavit  of  the  cus- 
todian of  the  stock  book  of  such  corporation,  stating  that  the  persons  who 
have  signed  such  consent  are  the  holders  of  record  of  the  entire  capital  stock 
of  said  corporation,  issued  and  outstanding  (S.  C.  L.,  sec.  26).  If  the  number 
of  directors  be  increased,  the  additional  directors  must  be  elected  by  a  vote 
of  a  majority  of  the  directors  in  office  at  the  time  of  the  increase  (S.  C.  L.,  sec.  26). 

Stock  Corporation  Law,  section  18,  provides  for  amendment  of  the  certifi- 
cate of  incorporation,  so  as  to  include  therein  the  purposes,  powers,  or  privileges 
which  at  the  time  of  such  alteration  may  be  applied  to  corporations  engaged  in 
business  of  the  same  general  character,  or  which  might  be  included  in  the  certifi- 
cates of  incorporation  of  a  corporation  organized  under  any  general  laws  of 
the  State  for  business  of  the  same  general  character. 

The  amendment  is  effected  by  filing,  in  the  manner  provided  for  the  original 
certificate  of  incorporation,  an  amended  certificate  executed  by  the  president 
and  secretary  stating  the  alteration  proposed,  and  that  the  same  has  been  duly 
authorized  by  a  vote  of  a  majority  of  the  directors,  and  also  by  a  vote  of  stock- 
holders representing  at  least  three-fifths  of  the  capital  stock  at  a  meeting  of  the 
stockholders  called  for  the  purpose  in  the  manner  provided  in  sec.  IS  of  the 
Stork  Corporal  ion  Law. 

To  increase  or  reduce  the  capital  stock  the  same  must  be  authorized  either 
by  the  unanimous  consent  of  the  stockholders  expressed  in  writing  and  filed 
in  the  office  of  the  Secretary  of  State,  and  in  the  office  of  the  clerk  of  the  county 
in  which  the  principal  business  office  of  the  corporation  is  located,  or  by  vote 
of  the  stockholders  owning  at  least  a  majority  of  the  stock  of  the  corporation, 
taken  at  a  meeting  of  the  stockholders  specially  called  for  that  purpose  in  the 
manner  provided  by  law  or  by  the  by-laws.     Notice  of  the  meeting,  stating  the 

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DIGEST    OF    INCORPORATION    ACTS.  —  NEW   YORK. 

time,  place,  and  object,  and  the  amount  of  the  increase  or  reduction  proposed, 
signed  by  the  president  or  vice-president  and  secretary,  shall  be  published  once 
a  week  for  at  least  two  successive  weeks  in  a  newspaper  in  the  county  where 
the  corporation's  principal  place  of  business  is  located,  and  a  copy  of  such 
notice  shall  be  duly  mailed  to  each  stockholder  or  member  at  his  last  known 
post-office  address  at  least  two  weeks  before  the  meeting,  or  shall  be  personally 
served  on  him  at  least  five  days  before  the  meeting.  At  such  meeting  a  majority 
of  the  stockholders  must  be  present  either  in  person  or  by  proxy.  A  sufficient 
number  of  votes  shall  be  given  in  favor  of  such  increase  or  reduction,  and  if  the 
same  shall  be  authorized  by  the  unanimous  consent  of  the  stockholders  expressed 
in  writing,  a  certificate  of  the  proceedings  showing  the  compliance  to  the  pro- 
visions of  law  and  the  amount  of  capital  theretofore  authorized  and  the  pro- 
portion thereof  actually  issued  and  the  amount  of  the  increased  or  reduced 
capital  stock,  and  in  the  case  of  a  reduction  of  capital  stock  the  whole  amount 
of  the  ascertained  debts  or  liabilities  of  the  corporation,  shall  be  made  and  filed 
in  the  office  of  the  clerk  of  the  county  where  its  principal  place  of  business  is 
located,  and  a  duplicate  thereof  in  the  office  of  the  Secretary  of  State.  In  case 
of  the  reduction  of  the  capital  stock  the  certificate  of  consent  hereinbefore  re- 
ferred to  must  have  endorsed  thereon  the  approval  of  the  Comptroller  to  the 
effect  that  the  reduced  capital  is  sufficient  for  the  proper  purposes  of  the  corpora- 
tion and  is  in  excess  of  its  ascertained  debts  and  liabiUties.  When  the  certificate 
of  the  unanimous  consent  of  stockholders  in  writing,  approved  as  aforesaid, 
has  been  filed,  the  capital  stock  of  the  corporation  shall  be  increased  or  reduced 
as  the  case  may  be  to  the  amount  specified  in  such  certificate  or  consent  (S.  C.  L., 
sees.  63,  64). 

To  increase  or  reduce  the  number  of  shares  requires  a  two-thirds  vote  of  all 
rtock  duly  represented  at  a  meeting  held  and  conducted  in  like  manner,  and 
upon  the  filing  of  like  certificate  as  required  for  the  increase  or  reduction  of 
its  capital  stock  (S.  C.  L.,  sec.  65;  see  also  G.  C.  L.,  sec.  7;  S.  C.  L.,  sees.  18, 
51,  62,  and  63).  To  change  the  location  of  the  place  of  business  the  change  must 
be  authorized  either  by  the  unanimous  consent  of  all  the  stockholders  expressed 
in  writing  and  duly  acknowledged  and  filed  in  the  office  of  the  Secretary  of 
State  or  by  a  vote  of  stockholders  at  a  special  meeting  called  for  that  purpose. 
The  president  and  secretary  and  a  majority  of  directors  must  sign  a  certificate 
stating  the  name  of  the  corporation,  and  stating  the  town  and  county  where  the 
principal  office  and  place  of  business  was  originally  located  and  to  which  it  may 
have  been  subsequently  changed,  and  the  city,  town,  and  county  to  which  it  is 
desired  to  change  the  same,  and  that  it  is  the  purpose  of  said  corporation  to 
actually  transact  and  carry  on  its  regular  business  at  such  place,  and  that  such 
change  has  been  authorized  as  provided  by  law,  and  the  names  of  the  directors 
and  their  places  of  residence.  This  certificate  must  be  verified  and  acknowledged 
by  all  persons  signing  the  same,  and  must  be  filed  in  the  office  of  the  Secretary 
of  State,  and  a  duplicate  copy  thereof  in  the  office  of  the  clerk  of  the  county 
from  which  said  present  office  or  place  of  business  is  to  be  removed  or  changed, 
and  entered  in  the  office  of  the  clerk  of  the  county  to  which  such  removal  or 
change  is  to  be  made  (S.  C.  L.,  sec.  13 ;  Laws  of  1905,  chap.  489).  The  number 
of  shares  may  be  increased  or  decreased  without  changing  the  amount  of  the 
authorized  capital,  thereby  changing  the  par  value  of  shares,  by  a  two-thirds 
vote  of  all  stock  (S.  C.  L.,  sec.  65). 

24.  Extension  of  Corporate  Existence.  —  Corporate  existence  may  be 
extended,  if  desired,  by  compliance  with  the  statute  (G.  C.  L.,  sec.  37).  Cor- 
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DIGEST    OF    INCORPORATION    ACTS.  —  NEW   YORK. 

porate  existence  may  be  extended  by  consent  of  stockholders  owning  two- 
thirds  in  amount  of  the  capital  stock.  This  consent  must  be  given  either  in 
writing  or  by  a  vote  at  a  special  meeting  of  the  stockholders  called  for  that 
purpose  upon  the  same  notice  as  is  required  for  annual  meetings.  A  certificate 
under  the  corporate  seal  must  be  prepared  showing  that  such  consent  was  given 
by  the  stockholders  in  writing,  or  that  it  was  given  by  a  vote  at  a  special  stock- 
holders' meeting.  This  certificate  must  be  subscribed  and  acknowledged  by 
the  president  or  the  vice-president,  and  by  the  secretary  or  assistant  secretary  of 
the  corporation,  and  must  be  filed  and  recorded  in  the  office  of  the  Secretary  of 
State,  and  a  certified  copy  of  such  certificate  with  a  certificate  of  the  Secretary 
of  State  of  such  filing  and  recording,  or  a  duplicate  original  of  such  certificate, 
must  be  filed  and  recorded  in  the  office  of  the  clerk  of  the  court  of  the  county 
where  the  corporation  has  its  principal  place  of  business.  The  act  also  provides 
that  the  certificate  of  incorporation  may  require  that  the  consent  of  stock- 
holders owning  a  greater  percentage  than  two-thirds  of  the  stock  shall  be 
requisite  to  vote  an  extension  of  corporate  existence  (G.  C.  L.,  sec.  37). 

25.  Dissolution.  —  Voluntary  dissolution  may  be  brought  about  in  two 
ways :  First,  by  a  two-thirds  vote  in  interest  of  the  stockholders  favoring  dis- 
solution preceded  by  a  resolution  to  that  effect  passed  by  the  board  of  directors ; 
second,  by  application  to  the  Supreme  Court  (G.  C.  L.,  sees.  221,  230-276;  Code 
of  Civ.  Pro.,  sees.  90-102,  170-195).  The  charter  maybe  surrendered  by  the 
incorporators  before  the  payment  of  any  part  of  the  capital  stock  and  before 
commencing  business  (G.  C.  L.,  sec.  220). 

26.  Foreign  Corporations.  —  The  General  Corporation  Law  (sees.  15 
and  16)  provides  as  follows: 

§  15.  Certificate  of  Authority  of  a  Foreign  Corporation.  —  No  foreign  stock 
corporation  other  than  a  moneyed  corporation  shall  do  business  in  this  State 
without  having  first  procured  from  the  Secretary  of  State  a  certificate  that  it 
has  complied  with  all  the  requirements  of  law  to  authorize  it  to  do  business 
in  this  State,  and  that  the  business  of  the  corporation  to  be  carried  on  in  this 
State  is  such  as  may  be  lawfully  carried  on  by  a  corporation  incorporated  under 
the  laws  of  this  State  for  such  or  similar  business,  or  if  more  than  one  kind 
of  business,  by  two  or  more  corporations  so  incorporated  for  such  kinds  of 
business  respectively.  The  Secretary  of  State  shall  deliver  such  certificate  to 
every  such  corporation  so  complying  with  the  requirements  of  law.  No  such 
corporation  now  doing  business  in  this  State  shall  do  business  herein  after 
December  thirty-first,  eighteen  hundred  and  ninety-two,  without  having  pro- 
cured such  certificate  from  the  Secretary  of  State,  but  any  lawful  contract 
previously  made  by  the  corporation  may  be  performed  and  enforced  within 
the  State  subsequent  to  such  date.  No  foreign  stock  corporation  doing  business 
in  this  State  shall  maintain  any  action  in  this  State  upon  any  contract  made 
by  it  in  this  State  unless  prior  to  the  making  of  such  contract  it  shall  have 
procured  such  certificate.  This  prohibition  shall  also  apply  to  any  assignee  of 
such  foreign  stock  corporation  and  to  any  person  claiming  under  such  assignee 
of  such  foreign  stock  corporation,  or  under  either  of  them.  No  certificate  of 
authority  shall  be  granted  to  any  foreign  corporation  having  the  same  name 
as  an  existing  domestic  corporation,  or  a  name  so  nearly  resembling  it  as  to  be 
calculated  to  deceive,  nor  to  any  foreign  corporation,  other  than  a  moneyed 
or  insurance  corporation,  with  the  word  "trust,"  "bank,"  "banking,"  "insur- 
ance," "assurance,"  "title,"  "indemnity,"  "guarantee,"  "guaranty,"" savings," 
"investment,"  "loan,"  or  "benefit,"  as  a  part  of  its  name. 

467 


DIGEST   OF   INCORPORATION   ACTS.  —  NEW    YORK. 

Proof  to  be  filed  before  granting  Certificate.  —  Before  granting  such  cer- 
tificate the  Secretary  of  State  shall  require  every  such  foreign  corporation  to 
file  in  his  office  a  sworn  copy  of  its  charter  or  certificate  of  incorporation,  and 
a  statement  under  its  corporate  seal,  particularly  setting  forth  the  business 
or  objects  of  the  corporation  which  it  is  engaged  in  carrying  on,  or  which  it 
proposes  to  carry  on,  within  the  State,  and  a  place  within  the  State  which  is 
to  be  its  principal  place  of  business,  and  designating,  in  the  manner  prescribed 
in  the  Code  of  Civil  Procedure,  a  person  upon  whom  process  against  the  corpora- 
tion may  be  served  within  the  State.  The  person  so  designated  must  have  an 
office  or  place  of  business  at  the  place  where  such  corporation  is  to  have  its 
principal  place  of  business  within  the  State.  Such  designation  shall  continue 
in  force  until  revoked  by  an  instrument  in  writing  designating  in  like  manner 
some  other  person  upon  whom  process  against  the  corporation  may  be  served  in 
this  State. 

If  the  person  so  designated  dies,  or  removes  from  the  place  where  the  cor- 
poration has  its  principal  place  of  business  within  the  State,  and  the  corpora- 
tion does  not  within  thirty  days  after  such  death  or  removal  designate  in  a 
like  manner  another  person  upon  whom  process  against  it  may  be  served  within 
the  State,  the  Secretary  of  State  may  revoke  the  authority  of  the  corporation 
to  do  business  within  the  State,  and  process  against  the  corporation  in  an 
action  upon  any  liability  incurred  within  this  State  before  such  revocation 
may,  after  such  death  or  removal  and  before  another  designation  is  made,  be 
served  upon  the  Secretary  of  State. 

The  statement  under  the  foregoing  provisions  must  set  forth  the  following, 
to  wit : 

1.  The  business  or  objects  of  the  corporation  which  is  engaged  in  carrying 
on,  or  which  it  proposes  to  carry  on,  within  the  State. 

2.  The  place  within  the  State  which  is  to  be  its  principal  place  of  business. 

3.  The  designation  of  a  person  upon  whom  process  against  the  corporation 
may  be  served  within  the  State.  Such  person  must  have  an  office  or  place  of 
business  within  the  State. 

The  written  consent  of  the  person  designated,  duly  acknowledged  by  such 
person,  must  also  be  attached. 

Said  statement  must  be  executed  in  the  name  and  on  behalf  of  the  cor- 
poration by  an  officer  thereof. 

The  customary  proof  must  be  appended  to  the  instrument,  showing  that 
the  same  was  executed  by  authority  of  the  corporation  and  proving  the  cor- 
porate seal. 

There  must  be  annexed  to  the  papers  a  copy  of  the  charter  or  the  certifi- 
cate of  incorporation  of  the  company,  sworn  to  as  a  true  copy  thereof  by  an 
officer  of  the  corporation. 

All  papers  must  be  attached  in  convenient  form  for  filing. 

An  acknowledgment  or  affidavit  taken  by  a  notary  public  in  another  State 
must  be  authenticated  by  a  clerk  of  a  court  of  record. 

The  filing  fees  are  $11,  under  sec.  26  of  the  Laws  of  1909,  chap.  23,  which 
sum  must  accompany  the  papers. 

The  papers  when  received  will  be  referred  to  the  State  Comptroller,  who 
will  later  communicate  with  the  corporation,  and  adjust  the  tax  under  sec.  181, 
chap.  908,  Laws  of  1896. 

Annual  reports  required  as  of  domestic  corporations.     Stock  book  with 
data  of  stockholders  must  be  kept  at  office  of  transfer  agent  in  the  State,  and 
468 


DIGEST   OF    INCORPORATION    ACTS.  —  NEW   YORK. 

shall  be  open  to  inspection,  under  penalty  of  S2.">0.  Every  foreign  corporation, 
except  banking  corporations,  fire,  marine,  casualty,  and  life  insurance  companies, 
co-operative  fraternal  insurance  companies,  and  building  and  loan  associations 
authorized  to  do  business  under  the  General  Corporation  haw  shall  pay  to  the 
State  Treasurer  for  the  use  of  the  State  a  license  fee  of  one-eighth  of  one  per 
cent  for  the  privilege  of  exercising  its  corporate  franchises,  or  carrying  on  its 
business  in  such  corporate  or  organized  capacity  in  this  State,  to  be  computed 
upon  the  basis  of  the  capital  stock  employed  by  it  within  this  State  during  the 
first  year  of  carrying  on  its  business  in  this  State ;  and  if  in  any  year  thereafter 
such  corporation  shall  employ  an  increased  amount  of  its  capital  stock  within 
this  State,  the  same  license  fee  shall  be  due  and  payable  upon  such  increase. 
The  measure  of  the  amount  of  capital  stock  employed  in  this  State  shall  be 
such  a  proportion  of  the  issued  capital  stock  as  the  gross  assets  employed  in 
any  business  within  this  State  bears  to  the  gross  assets  wherever  employed 
in  business.  For  purposes  of  taxation  the  capital  of  a  corporation  invested  in 
the  stock  of  another  corporation  shall  be  deemed  to  be  assets  located  where 
the  physical  property  represented  by  such  stock  is  located:  No  action  shall  be 
maintained  or  recovery  had  in  any  of  the  courts  in  this  State  by  such  foreign 
corporation  after  thirteen  months  from  the  time  of  beginning  such  business 
within  the  State  without  obtaining  a  receipt  from  the  Comptroller  for  the  pay- 
ment of  the  license  fee  upon  the  capital  stock  employed  by  it  within  this  State 
during  the  first  year  of  carrying  on  its  business  in  this  State  (Laws  of  1910, 
chap.  340).  Foreign  corporations  are  required  to  pay  the  same  annual  license 
tax  as  is  imposed  upon  domestic  corporations.  This  is  assessed,  however,  upon 
the  basis  of  the  amount  of  capital  stock  within  the  State.  (See  ante,  sec.  22; 
G.  C.  L.,  sees.  15,  16;  S.  C.  L.,  sees.  33,  70;  C.  C.  P.,  sees.  432,  1779;  Tax  Laws, 
sec.  181.) 

Demarest  v.  Flack,  128  N.  Y.  205;  28  N.  E.  645;  People  ex  rel.  H.  &  H.  Co.  v.  Camp- 
bell, 139  N.  Y.  68;  34  N.  E.  753;  People  ex  rel.  S.  T.  Clock  Co.  v.  Wemple,  133  N.  Y  323; 
31  N.  E.  238;  People  v.  A.  B.  T.  Co.,  117  N.  Y.  241;  22  N.  E.  1057;  People  ex  rel.  Wemple, 
138  N.  Y.  582;  34  N.  E.  386;  O'Reilly,  Skellv,  &  Fogarty  Co.  v.  Greene,  40  N.  Y.  360;  Peo- 
ple v.  Kelsev,  93  N.  Y.  Sup.  971;  People  v.  Miller,  94  N.  Y.  Sup.  193;  Tying  v.  Company, 
93  N.  Y.  Slip.  928;  Fay  v.  Company,  94  N.  Y.  Sup.  628;  Miller  v.  Quincy,  179  N.  Y  .  294; 
72  N.  E.  116;  P.  C.  Company  v.  McKeever,  93  App.  Div.  303;  87  N.  Y.  Sup.  869;  Bishoff 
v.  Company,  97  App.  Div.  17;  89  N.  Y.  Sup.  594;  Harvard  Co.  v.  Wicht,  91  N.  Y.  Sup.  48; 
99  App.  Div.  507;    A.  C.  P.  Co.  v.  Bagge,  91  N.  Y.  Sup.  73;  Grant  v.  Co.,  189  N.  Y.  241. 


469 


DIGEST    OF    INCORPORATION    ACTS. NORTH    CAROLINA. 


NORTH   CAROLINA. 

(The  references  cited  below  are  to  the  Revisal  of  1905,  of  the  Laws  of  North  Carolina,  un- 
less otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. — 

The  Business  Corporation  Act  of  North  Carolina  is  to  be  found  in  the  Revisal 
of  1905,  chap.  21,  sees.  1128-1248  inclusive.  Under  this  act  corporations  may- 
be formed  for  any  purpose  excepting  railroad,  insurance,  banking  companies, 
building  companies,  and  eleemosynary  corporations  (sec.  1137). 

2.  Incorporators.  —  Any  number  of  persons  not  less  than  three.  There 
are  no  residential  requirements  (sees.  1137,  1143;  Laws  of  1909,  chap.  502). 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate  must 
set  forth : 

a.  Name.  —  No  name  can  be  used  already  in  use  by  another  domestic  cor- 
poration (sec.  1137).  The  name  must  end  with  the  word  "company"  or  the 
word  "incorporated"  (sec.  1137,  sub.  1). 

6.  Domicile.  —  Location  of  principal  office  within  the  State  (sec.  1137, 
sub.  2;    see  Laws  of  1909,  chap.  874). 

c.  Purposes.  —  The  object  or  objects  for  which  the  corporation  is  formed. 
Any  number  of  purposes  may  be  inserted  in  the  certificate  (sec.  1137,  sub.  3). 

d.  Capital  Stock.  —  Authorized  capital  stock  (unlimited).  Number  of 
shares  into  which  divided,  and  par  value  (any  amount)  thereof,  amount  of 
capital  stock  with  which  corporation  will  begin  business  (no  amount  limited 
in  the  act).  If  there  is  more  than  one  class  of  stock,  a  description  of  all  classes 
must  be  inserted,  together  with  terms  upon  which  created  (sec.  1137,  sub.  4). 

e.  Stock  Subscriptions.  —  Names  and  post-office  addresses  of  subscribers  for 
stock  and  the  number  of  shares  subscribed  by  each.  The  act  provides  that 
the  aggregate  of  such  subscriptions  shall  be  the  amount  of  capital  stock  with 
which  the  corporation  will  begin  business  (sec.  1137,  sub.  5). 

/.   Duration.  —  May  be  perpetual  (sec.  1137,  sub.  6). 

g.  Provisions  for  the  Regulation  of  the  Internal  Affairs  of  the  Corporation.  — 
Provisions  may  be  inserted  for  the  regulation  of  the  business  and  for  the 
purpose  of  creating,  defining,  limiting,  or  regulating  the  powers  of  the  cor- 
poration, directors,  and  stockholders  (sec.  1137,  sub.  7). 

4.  Statutory  Powers.  —  In  addition  to  &  statutory  enumeration  of  com- 
mon law  powers  corporations  have  the  following  additional  powers :  To  au- 
thorize voting  by  proxy ;  to  forfeit  stock  for  non-payment  of  assessments ;  to 
provide  suitable  penalties  for  violation  of  by-laws,  not  exceeding  $20  for  any 
one  offence ;  to  delegate  the  power  to  directors  to  adopt  by-laws ;  to  issue  pre- 
ferred stock  to  the  extent  of  one-half  of  actual  capital  paid  in  in  cash  or  property 
and  to  make  the  same  subject  to  redemption ;  to  authorize  the  holding  of  di- 
rectors' meetings  and  keeping  of  corporate  books,  except  stock  and  transfer 
books,  outside  of  the  State ;  to  classify  directors ;  to  permit  cumulative  voting 
in  election  of  directors,  and  to  conduct  business  in  other  States  and  foreign 
countries ;  to  issue  and  sell  bonds  for  less  than  par  (sees.  1128-1130,  1145-1147, 
1170-1173,  1183-1184;    Laws  of  1909,  chap.  874). 

Heggie  v.  Association,  107  N.  C.  581;  12  S.  E.  275;  Meares  v.  Improvement  Co.,  126 
N.  C.  662;  36  S.  E.  130. 

470 


DIGEST    OF    INCORPORATION    ACTS.  —  NORTH    CAROLINA. 

5.  Procuring  the  Charter.  —  Incorporators  must  subscribe  and  acknowl- 
edge the  certificate  of  incorporation.  The  certificate  must  then  be  filed  and 
recorded  in  the  office  of  the  Secretary  of  State,  the  organization  tax  being  then 
paid.  A  certified  copy  of  the  certificate  and  probate  must  be  forthwith  re- 
corded in  the  office  of  the  clerk  of  the  Superior  Court  of  the  county  where  the 
principal  office  of  the  corporation  is  to  be  established  (sec.  1139). 

AshvUie  Div.  v.  Oston,  92  N.  C.  578. 

6.  Corporate  Indebtedness.  — There  is  no  statutory  limitation  upon  the 
amount  of  corporate  indebtedness.  The  law  expressly  permits  bonds  of  cor- 
porations to  be  sold  for  less  than  par  (Laws  of  1903,  chap.  154;  see  as  to  issue 
and  sale  of  bonds  of  construction  companies,  sec.  1172). 

7.  Organization  Tax. —Twenty  cents  for  each  one  thousand  dollars  of 
the  amount  of  capital  stock  authorized,  but  in  no  case  less  than  $25  (sec.  1233). 

8.  Filing  and  Recording  Fees.  —  For  filing  and  recording  certificate  of 
incorporation  in  the  office  of  the  Secretary  of  State,  SI  for  the  first  three  copy 
sheets,  and  10  cents  per  copy  sheet  thereafter ;  also  50  cents  for  seal.  The  same 
charge  is  made  for  certified  copy  of  certificate  of  incorporation;  for  filing  list 
of  officers  and  directors,  $1 ;  for  increase  of  capital  stock,  20  cents  for  each  one 
thousand  dollars  of  the  total  increase  authorized,  but  in  no  case  less  than  $20; 
extension  or  renewal  of  corporate  existence,  same  as  in  the  original  certificates; 
for  filing  other  certificates  of  amendment,  $20 ;  for  filing  certificate  of  dissolu- 
tion or  change  of  principal  place  of  business,  $5.  There  must  be  paid  to  the 
clerk  of  the  Superior  Court  for  recording  the  certificate  of  incorporation  in  the 
county  where  the  principal  office  of  the  corporation  is  established  a  fee  that 
averages  about  $3  (sees.  1233,  1234). 

9.  Commencing  Business.  —  Corporations  may  commence  business  aa 
soon  as  the  certificate  of  incorporation  is  filed  as  required  by  law  (sec.  1140). 
Within  thirty  days  after  the  election  of  the  first  board  of  directors  there  must 
be  filed  in  the  office  of  the  Secretary  of  State  a  statement  authenticated  by 
the  signatures  of  the  president  and  secretary  containing  the  names  of  all  the 
directors  and  officers,  with  the  date  of  the  election  or  appointment,  term  of 
office,  residence  and  post-office  address  of  each,  the  character  of  its  business 
and  location,  giving  the  street  and  number,  if  any,  of  its  principal  office  in  the 
State,  and  the  name  of  the  agent  in  charge  of  said  office  upon  whom  process 
may  be  served.  Business  must  be  commenced  within  two  years  from  the  time 
certificate  is  filed  (sec.  1246). 

.  10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  State.  The  first  meeting  of  every  corporation  shall  be  called  by  a 
notice  signed  by  a  majority  of  the  incorporators  designating  the  time,  place, 
and  purpose  of  the  meeting,  which  notice  shall  be  published  at  least  two  weeks 
before  the  meeting  in  some  newspaper  of  the  county  where  the  corporation  is 
established ;  which  said  first  meeting  may  be  called  without  publication  if  two 
days'  notice  be  personally  served  on  all  of  the  incorporators,  or  if  all  of  the 
incorporators  shall  in  writing  waive  notice  and  fix  a  time  and  place  of  meeting 
no  notice  of  publication  shall  be  required  (sees.  1142,  1143).  The  incorporators 
are  given  the  direction  of  affairs  of  the  corporation  until  the  directors  are  elected 
(sec.  1141). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  within  the  State.  Directors'  meetings  may  be  held  without  the 
State,  if  the  by-laws  so  provide  (sees.  1147,  1149). 

471 


DIGEST    OF    INCORPORATION    ACTS.  —  NORTH    CAROLINA. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  a  board  of  not  less  than  three  directors.  At  least  one  of  them  must 
be  a  resident  of  the  State.  They  must  all  be  bona  fide  stockholders.  They 
may  be  divided  into  classes,  provided  no  class  is  elected  for  a  shorter  period 
than  one  year  or  for  a  longer  period  than  five  years  (sees.  1147,  1148,  1160,  1182). 
Any  corporation  which  shall  have  more  than  one  kind  of  stock  may,  by  so 
providing  in  its  certificate  of  incorporation,  confer  the  right  to  choose  the 
directors  of  any  class  upon  the  stockholders  of  any  class  to  the  exclusion  of 
the  others  (sec.  1147).  Cumulative  voting  in  the  election  of  directors  is  per- 
mitted whether  provision  therefor  is  made  in  the  certificate  of  incorporation 
or  not  (sec.  1183,  Laws  of  1907,  chap.  457). 

Any  stockholder  owning  or  controlling  more  than  twenty-five  per  cent  of 
the  stock  of  any  corporation  shall  have  the  same  right  to  vote  cumulatively  as 
any  other  stockholder,  and  no  amendment  of  the  certificate  of  incorporation, 
charter  or  by-laws  of  any  corporation  which  may  be  hereafter  adopted  or  al- 
lowed shall  have  the  effect  of  abrogating  or  abridging  any  right  herein  conferred, 
provided  further  that  such  right  to  vote  cumulatively  shall  not  be  exercised 
unless  some  stockholder  shall  announce  in  open  meeting  before  the  balloting 
vote  for  directors,  trustees,  or  managers  begins  his  purpose  to  exercise  such 
right,  in  which  case  each  and  every  stockholder  may  likewise  vote  cumulatively 
(chap.  827,  sec.  1). 

b.  Liabilities.  —  Directors  are  liable  for  the  illegal  declaration  of  dividends, 
for  loans  to  stockholders,  for  refusing  after  demand  made  upon  them  to  make 
reports  within  thirty  days  thereafter.  They  are  also  liable  for  not  publishing 
notice  of  decrease  of  capital,  for  illegally  voting  in  favor  of  a  reduction  of  capi- 
tal, and  for  making  false  certificates,  and  for  fraud  (sees.  1154-1156,  1163,  1164, 
1179,  1191,  1192,  1202). 

Solomon  v.  Bates,  118  N.  C.  321 ;  24  S.  E.  746. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  their  unpaid 
stock  subscriptions  (sec.  1162).  They  are  also  liable  for  fraud  committed  by 
them  to  creditors  and  others  injured  thereby  (sec.  1156).  They  are  also  per- 
sonally liable  for  all  dissolution  expenses  (Laws  of  1909,  chap.  730) . 

Harmon  v.  Hunt,  116  N.  C.  678;  21  S.  E.  559;  Cooper  v.  Company,  127  N.  C.  219;  37 
S.  E.  216;   Cotton  Mills  v.  Cotton  Mills,  116  N.  C.  647;    21  S.  E.  431. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  a  certificate, 
signed  by  the  president  and  treasurer  or  secretary,  specifying  the  number  of 
shares  held  by  him  in  the  corporation  (sec.  1165). 

15.  Preferred  Stock.  —  Every  corporation  shall  have  power  to  create 
two  or  more  kinds  of  stock  of  such  classes,  with  such  distinctions,  preferences, 
and  voting  powers,  or  restriction  or  qualification  thereof  as  shall  be  prescribed 
by  those  holding  two-thirds  of  the  capital  stock  outstanding,  and  the  power  to 
increase  or  decrease  the  stock  as  herein  elsewhere  provided  shall  apply  to  all 
or  any  of  the  classes  of  stock;  and  such  preferred  stock  may,  if  desired,  be 
made  subject  to  redemption  at  not  less  than  par  at  a  fixed  time  and  price  to 
be  expressed  in  the  certificate  thereof,  and  the  holders  thereof  shall  be  entitled 
to  receive  and  the  corporation  shall  be  bound  to  pay  thereon  a  fixed  yearly 
dividend  to  be  expressed  in  the  certificate,  payable  quarterly,  half  yearly,  or 
yearly  before  any  dividends  shall  be  set  apart  or  paid  on  the  common  stock,  and 
such  dividends  may  be  made  cumulative ;  and  in  case  of  insolvency  its  debts 
and  other  liabilities  shall  be  paid  in  preference  to  the  preferred  stock.  No  cor- 
poration shall  create  preferred  stock  except  by  authority  given  to  the  board  of 

472 


DIGEST    OF    INCORPORATION    ACTS.  —  NORTH    CAROLINA. 

directors  by  a  vote  of  at  least  two-thirds  of  the  stock  voted  at  a  meeting  of  the 
common  stockholders  duly  called  for  that  purpose  (sec.  1159). 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  in  exchange  for 
money,  labor  done,  personal  property,  real  estate  or  leases  thereof.  In  the 
absence  of  fraud  in  the  transaction,  the  judgment  of  the  directors  as  to  the 
value  of  such  labor,  property,  real  estate  or  leases  thereof  shall  be  conclusive 
(sec.  1159).  Corporations  may  purchase  mines  and  manufactories  and  issue 
stock  in  payment  therefor  to  the  amount  of  the  value  thereof,  and  the  stock  so 
issued  shall  be  full  paid  stock  and  not  liable  to  any  further  call.  In  the  absence 
of  fraud  the  judgment  of  the  directors  as  to  the  value  of  the  property  so  taken 
shall  be  conclusive.  Upon  the  payment  in  full  of  each  instalment  of  capital 
stock,  a  certificate  setting  forth  the  particulars  thereof,  verified  by  the  president 
and  secretary  or  treasurer,  must  within  ten  days  after  such  payment  be  filed 
in  the  office  of  the  Secretary  of  State  (sees.  1159-1161). 

17.  Books.  —  Must  keep  at  its  principal  office  in  the  State  the  transfer 
books  and  the  stock  books  of  the  corporation  (sec.  11S0).  These  are  open  to  the 
inspection  of  all  stockholders. 

18.  Office  and  Agent.  —  Every  corporation  is  required  to  have  an  oflice 
within  the  State,  where  its  name  must  be  displayed  in  conspicuous  letters.  Must 
have  an  agent  in  charge  of  its  principal  office  within  the  State  residing  therein 
(sees.  1179,  1242,  1243). 

Simmons  v.  Steamboat  Co.,  113  N.  C.  147;    18  S.  E.  117. 

19.  Reports.  —  Every  corporation  authorized  to  transact  business  in  this 
State  shall  file  in  the  office  of  the  Secretary  of  State  annually  on  or  before 
December  1st  a  statement  authenticated  by  the  signatures  of  the  president 
and  secretary  containing  the  names  of  all  the  directors  and  officers,  with  the 
date  of  election  or  appointment,  term  of  office,  residence  and  post-office  address 
of  each,  the  character  of  its  business  and  location,  giving  the  street  and  number, 
if  any,  of  its  principal  office  in  the  State,  and  the  name  of  the  agent  in  charge 
of  said  office  upon  whom  process  against  the  corporation  may  be  served  (sec. 
1152,  as  amended  by  Laws  of  1907,  chap.  944).  Also  on  or  before  July  1st  of 
each  year  an  annual  report  must  be  filed  with  the  State  Auditor  (Laws  of  1905, 
chap.  90,  sec.  34 ;  sec.  5270.  See  also  as  to  compulsory  auditing  of  books  of 
corporations,  Laws  of  1911,  chap.  1349). 

20.  Anti-Trust  Statute.  —  There  is  a  somewhat  drastic  anti-trust  statute 
in  force  in  North  Carolina  (Laws  of  1899,  chap.  666;  Laws  of  1901,  chap.  586; 
Laws  of  1907,  chap.  218;  also  sec.  3739). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited  for  failure  to  bring  the  books  of  the  corporation  into  the  State  after 
an  order  to  that  effect  made  by  the  Superior  Court  upon  proper  cause  shown 
(sees.  1217,  1218).  Charter  may  also  be  dissolved  by  the  State  for  abuse,  mis- 
user, or  non-user  of  its  corporate  powers  and  privileges  and  for  violation  of  the 
anti-trust  statute  (sees.  1196-1198,  1209,  1246);  also  for  assuming  or  exer- 
cising any  franchise  or  transacting  any  business  not  allowed  by  its  charter 
(sec.  49,  Laws  of  1899,  chap.  66,  sec.  5;  Laws  of  1901,  chap.  2,  sec.  107; 
sec.  1198).  Charters  may  also  be  forfeited  if  the  corporators  for  two  years 
should  neglect  or  fail  to  organize  the  company,  or  when  organized  if  they  for 
two  years  at  any  time  shall  cease  to  act  (sees.  1198,  1246),  also  for  failing  t>> 
pay  annual  franchise  tax  for  three  consecutive  years  (Laws  of  1905,  chap.  588, 
sec.  83). 

Cotton  Mills  v.  Burns,  114  N.  C.  353;    19  S.  E.  238. 

473 


DIGEST    OF    INCORPORATION    ACTS. — NORTH    CAROLINA. 

22.  Amendments.  —  The  incorporators  before  the  payment  of  any  part  of 
the  capital  stock  may  file  with  the  Secretary  of  State  an  amended  certificate 
of  incorporation  duly  signed  by  all  the  incorporators,  amending  the  original 
certificate  of  incorporation  in  whole  or  in  part.  The  amended  certificate  when 
recorded  in  the  local  county  office  takes  the  place  of  the  original  certificate  of 
incorporation  (sec.  1174).  Every  corporation  after  the  payment  of  its  capital 
stock  may  change  its  name,  increase  or  decrease  its  capital  stock,  change  the 
par  value  of  its  shares,  and  make  any  other  amendment  desired  in  manner  fol- 
lowing, to  wit : 

The  board  of  directors  shall  pass  a  resolution  declaring  that  such  amendment 
is  advisable  and  calling  a  meeting  of  the  stockholders  to  take  action  thereon. 
The  meeting  shall  be  held  upon  such  notice  as  the  by-laws  provide,  and,  in  the 
absence  of  such  provision,  upon  ten  days'  notice  given  personally  or  by  mail. 
If  two-thirds  in  interest  of  each  class  of  the  stockholders  having  voting  powers 
shall  vote  in  favor  of  the  amendment,  a  certificate  thereof  shall  be  signed  and 
acknowledged  by  the  president  and  secretary  under  the  corporate  seal,  and  such 
certificate,  together  with  the  written  assent  in  person  or  by  proxy  of  two-thirds 
in  interest  of  each  class  of  such  stockholders,  shall  be  filed  in  the  office  of  the 
Secretary  of  State,  and  upon  such  fifing  they  shall  be  recorded  in  the  county 
in  which  the  original  certificate  of  incorporation  is  recorded.  Thereupon  the 
certificate  of  incorporation  shall  be  deemed  to  be  amended  accordingly  (sec. 

1174). 

The  board  of  directors  may  change  the  location  of  the  principal  office  of 
such  corporation  within  the  State  to  any  other  place  therein  by  resolution 
adopted  at  a  regular  or  special  meeting  of  such  board  by  the  vote  of  at  least 
two-thirds  of  the  members  of  such  board.  No  certificate,  however,  is  required 
to  be  filed  on  account  of  the  removal  of  any  office  from  one  point  to  another 
in  the  same  city  or  town  of  the  State.  Upon  the  adoption  of  a  resolution  as 
foresaid  a  copy  thereof  must  be  filed  in  the  office  of  the  Secretary  of  State, 
signed  by  the  president  and  secretary  of  such  corporation  under  the  corporate 
seal  (sec.  1176). 

Special  provision  is  made  in  the  case  of  decrease  of  capital  stock  as  follows  : 
The  decrease  may  be  effected  by  retiring  or  reducing  one  class  of  stock  or  by 
drawing  the  necessary  shares  by  lot  for  retirement,  or  by  the  surrender  by  every 
shareholder  of  his  certificates  and  the  issuance  to  him  in  lieu  thereof  of  a  de- 
creased number  of  shares,  or  by  the  purchase  at  not  above  par  of  certain  shares 
for  retirement,  or  by  retiring  shares  owned  by  the  corporation,  or  by  reducing 
the  par  value  of  shares  one-fourth.  A  certificate  showing  the  decrease  must 
be  published  for  three  weeks  successively  at  least  once  in  each  week  in  a  news- 
paper published  in  the  county  in  which  the  principal  office  of  the  corporation 
is  located,  the  first  publication  to  be  made  within  fifteen  days  after  the  filing 
of  such  certificate,  and  in  default  thereof  the  directors  of  the  corporation  shall 
be  jointly  and  severally  liable  for  all  debts  of  the  corporation  contracted  before 
the  filing  of  said  certificate,  and  the  stockholders  shall  also  be  liable  for  such 
sums  as  they  may  respectively  receive  of  the  amount  so  reduced  (sec.  1164). 
Special  provision  is  made  for  correcting  errors  in  the  certificate  of  incorporation. 
The  law  provides  (sec.  1144),  whenever  in  any  certificate  of  incorporation  under 
any  general  law  there  shall  be  any  error  or  omission  in  the  recital  of  the  act 
under  which  said  corporation  is  created,  or  in  the  omission  of  any  other  matters, 
which  is  required  to  be  stated  in  the  certificate,  it  shall  be  lawful  for  such  cor- 
poration to  correct  such  error  in  the  manner  following :  The  board  of  directors 

474 


DIGEST    OF    INCORPORATION    ACTS.  —  NORTH    CAROLINA. 

of  such  corporation  shall  pass  a  resolution  declaring  that  such  error  exists,  and 
that  such  corporation  desires  to  correct  the  same,  and  shall  call  a  meeting  of 
the  stockholders  of  said  corporation  to  take  action  upon  said  resolution,  the 
meeting  of  said  stockholders  to  be  held  upon  such  notice  as  the  by-laws  provide, 
and,  in  the  absence  of  such  provision,  ten  days'  notice  given  personally  or  by 
mail.  If  two-thirds  in  interest  of  all  of  the  stockholders  shall  vote  in  favor  of 
the  correction  of  such  error  or  omission,  a  certificate  of  such  action  shall  be 
made  and  signed  by  the  president  and  secretary  under  the  corporate  seal ;  which 
certificate  shall  be  acknowledged  and  proved  as  in  the  case  of  deeds  of  real 
estate,  and  such  certificate,  together  with  the  written  assent  in  person  or  by 
proxy  of  two-thirds  in  interest  of  all  of  the  stockholders  of  such  corporation, 
shall  be  filed  in  the  office  of  the  Secretary  of  State,  and  upon  the  fifing  thereof 
the  certificate  of  incorporation  shall  be  deemed  to  be  corrected  and  amended 
accordingly,  and  the  fifing  of  such  certificate  in  conformity  with  tins  chapter 
shall  have  the  same  force  and  effect  as  if  such  certificate  of  incorporation  had 
been  originally  drafted  in  conformity  with  the  amendment  so  made  (sec.  1144). 

23.  Extension  of  Corporate  Existence.  —  Corporation  may  extend  its 
corporate  existence  for  any  period  desired  (sees.  1175,  1178). 

24.  Dissolution.  —  A  corporation  may  be  dissolved  by  mutual  consent 
upon  the  vote  of  two-thirds  in  interest  of  the  stockholders  (sees.  1195,  1200- 
1208,  1211,  1219-1232;  Law  of  1909,  chap.  15).  The  charter  may  be  surren- 
dered by  the  incorporators  before  the  payment  of  any  part  of  the  capital  and 
before  beginning  business  by  complying  with  the  statute  in  such  case  made 
and  provided  (sec.  1177;   see  also  Laws  of  1909,  chap.  730). 

25.  Annual  License  Fee.— Where  the  corporation  has  a  capital  stock 
paid  in  or  subscribed  of  $25,000,  the  annual  tax  is  $5 ;  up  to  $50,000,  $10 ;  up 
to  $100,000,  $25 ;  up  to  $250,000,  $50 ;  up  to  $500,000,  $100 ;  up  to  $1,000,000, 
$200;   over  $1,000,000,  $500  (sec.  5190). 

26.  Foreign  Corporations.  —  Foreign  corporations  must  file  with  the 
Secretary  of  State  a  copy  of  their  charter  attested  by  the  president  and  secretary 
under  the  corporate  seal,  and  accompanied  by  a  statement  attested  in  like  man- 
ner setting  forth  the  amount  of  capital  stock  authorized,  amount  issued,  location 
of  principal  office  in  the  State,  and  name  of  agent  in  charge  thereof,  character 
of  the  business  to  be  transacted,  and  names  and  post-office  addresses  of  officers 
and  directors  (sec.  1194).  Such  corporations  must  also  pay  a  tax  of  10  cents 
per  thousand  dollars  on  authorized  capital  stock,  provided,  however,  that  the 
same  shall  never  be  less  than  $10  nor  more  than  $100  (sec.  5190).  Foreign  cor- 
porations are  subject  to  the  same  annual  license  tax  imposed  upon  domestic 
corporations  (Laws  of  1905,  chap.  588,  sec.  83).  Annual  reports  must  also  be 
filed  (sec.  1152,  as  amended  by  Laws  of  1907,  chap.  944.  As  to  service  of  pro- 
cess upon  foreign  corporations,  see  Public  Laws  of  1907,  chaps.  460,  473). 

Debnam  v.  Company,  126  N.  C.  831;  36  S.  E.  269;  Howard  v.  Association,  125  N.  C.  49; 
34  S.  E.  199;  Commissioners  v.  Company,  128  N.  C.  558;  39  S.  E.  18;  Shields  v.  Life  Ins. 
Co.,  119  N.  C.  380;   25  S.  E.  951;   J.  A.  H.  Co.  v.  Company  (N.  C),  50  S.  E.  650. 


475 


DIGEST    OF    INCORPORATION    ACTS.  —  NORTH    DAKOTA. 


NORTH   DAKOTA. 

(The  references  cited  below  are  to  the  Revised  Code  of  1905,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  North  Dakota  is  to  be  found  in  the  Revised 
Code  of  1905,  chaps.  11  and  15.  Under  this  act  corporations  may  be  formed  for 
any  purpose  for  which  individuals  may  lawfully  associate  themselves,  except 
that  special  acts  are  provided  for  railway,  wagon  road,  insurance,  bridge, 
agricultural  fair,  and  eleemosynary  corporations  (sec.  4168).  There  are  some 
special  provisions  applicable  to  mining  and  manufacturing  companies. 

2.  Incorporators.  —  Not  less  than  three,  one-third  of  whom  must  be  resi- 
dents of  the  State  (sec.  4176). 

3.  Contents  of  the  Articles  of  Incorporation.  —  The  articles  must  set 
forth  (sec.  4169) : 

a.  Name.  —  There  is  no  statute  expressly  forbidding  the  use  of  a  name 
already  in  use  by  another  domestic  corporation,  but  the  power  is  assumed  by 
the  Secretary  of  State  to  refuse  articles  attempting  to  make  use  of  such 
name. 

6.  Purposes.  —  Purpose  for  which  it  is  formed.  The  Secretary  of  State  per- 
mits the  insertion  of  any  number  of  purposes  in  the  articles  not  covered  by 
special  acts  (sees.  4168). 

c.  Domiciliary  Office.  —  Place  where  its  principal  business  is  to  be  transacted. 

d.  Duration.  —  Term  for  which  it  is  to  exist,  not  exceeding  twenty  years. 

e.  Directors.  —  Number  of  directors  and  names  and  residences  of  those  who 
are  to  serve  until  their  successors  are  elected  and  qualified. 

/.  Capital  Stock.  —  Amount  of  capital  stock,  number  of  shares  into  which 
it  is  divided.  Both  may  be  any  amount  desired  (sec.  4173).  If  preferred  stock 
is  to  be  issued  make  provision  for  it  here  (Laws  of  1909,  chap.  61). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers,  the  following  additional  powers  are  granted:  To  authorize 
voting  by  proxy ;  to  forfeit  stock  for  non-payment  of  assessments ;  to  own  its 
own  stock ;  to  provide  penalties  for  violation  of  by-laws  not  to  exceed  $100 ;  to 
permit  cumulative  voting,  and  to  remove  directors  (sees.  4214,  4193  et  seq., 
4202,4207,4213). 

Tourtelot  v.  Whithead,  9  N.  D.  407;  84  N.  W.  8. 

5.  Procuring  the  Charter.  —  The  charter  must  be  subscribed  and  ac- 
knowledged by  the  incorporators  (sec.  4176).  The  articles  must  then  be  filed 
with  the  Secretary  of  State  (sec.  4180).  There  must  be  filed  with  the  Secretary 
of  State  a  duplicate  receipt  of  the  S^ate  Treasurer  showing  payment  of  organiza- 
tion tax.  When  all  these  formalities  have  been  complied  with,  the  Secretary 
of  State  issues  a  certificate  of  incorporation.  Collateral  inquiry  into  the  legality 
of  corporate  existence  is  forbidden  (sees.  2852,  2867). 

6.  Corporate  Indebtedness.  —  Corporate  indebtedness  must  not  exceed 
the  amount  of  subscribed  capital  stock.  Express  authority  is  given  to  issue 
bonds  (sec.  4225). 

7.  Organization  Tax.  —  For  capitalization  up  to  $25,000,  the  fee  is  $25; 
for  capitalization  up  to  $50,000,  the  fee  is  $50  to  be  paid  to  the  State  Treasurer, 

476 


DIGEST    OF    INCORPORATION    ACTS.  —  NORTH    DAKOTA. 

and  S5  for  every  additional  $10,000  or  fractional  part  thereof.  Every  corpora- 
tion for  profit  except  corporations  organized  for  the  purpose  of  irrigation,  water 
users  associations,  building  and  loan  associations,  county  mutual  insurance 
companies,  corporations  for  the  manufacturing  of  dairy  products,  agricultural 
fair  associations,  corporations  whose  capital  stock  does  not  exceed  $5,000, 
formed  for  the  purpose  and  maintenance  of  male  animals  for  the  improvement  of 
stock,  corporations  whose  capital  stock  does  not  excite  1  $2,000,  formed  for  the 
purchase  of  musical  instruments,  music  and  uniforms  for  bands  of  musicians,  and 
corporations  whose  capital  stock  does  not  exceed  $5,000,  formed  for  the  purpose 
of  purchasing  or  leasing  grounds  for  the  erection  thereon  of  necessary  fences, 
buildings,  and  seats,  and  purchasing  the  necessary  equipments  for  the  use  of 
base  ball  clubs,  foot  ball  teams,  and  other  athletic  associations  when  composed 
of  non-salaried  members  or  players  shall,  at  or  before  the  filing  of  the  articles  of 
incorporation,  pay  into  the  State  treasury  the  sum  of  $25  for  the  first  $25,000 
or  fraction  thereof  of  the  capital  stock  of  such  corporation,  and  the  sum  of  $50 
for  $25,000  up  to  $50,000  of  the  capital  stock  of  such  corporation,  and  the  fur- 
ther sum  of  $5  for  every  additional  $10,000  or  fraction  thereof  of  its  capital  stock 
(Laws  of  1911,  chap.  105). 

8.  Filing  and  Recording  Fees.  —  For  filing  and  recording  articles  of  in- 
corporation in  the  office  of  the  Secretary  of  State,  $3 ;  for  issuing  a  certificate 
of  incorporation,  $5 ;  for  issuing  certified  copy  of  articles  of  incorporation,  25 
cents  per  folio  of  one  hundred  words  and  $1  for  certificate.  The  charge  for  filing 
and  recording  amendments  to  articles  of  incorporation  is  25  cents  per  folio  of 
one  hundred  words. 

9.  Commencing  Business.  —  Business  may  be  commenced  as  soon  as  the 
articles  are  executed  and  filed  as  required  by  law  (sec.  1480).  Every  corporation 
formed  under  this  chapter  must  within  one  month  after  filing  articles  of  incor- 
poration adopt  a  code  of  by-laws  for  its  government,  not  inconsistent  with  the 
Constitution  and  laws  of  this  State.  The  assent  of  stockholders  representing  a 
majority  of  all  of  the  subscribed  capital  stock,  or  of  a  majority  of  the  members, 
if  there  is  no  capital  stock,  is  necessary  to  adopt  the  by-laws  if  any  are  adopted 
at  a  meeting  called  for  that  purpose,  and  in- event  of  such  meeting  being  called 
notice  thereof  shall  be  published  two  times,  once  in  each  week  for  two  successive 
weeks  in  some  newspaper  published  in  the  county  in  which  the  principal  place 
of  business  of  the  corporation  is  located,  or  if  none  is  published  therein,  then  in  a 
newspaper  published  at  the  seat  of  government.  The  written  assent  of  the  hold- 
ers of  two-thirds  of  the  stock  or  of  two-thirds  of  the  members,  if  there  is  no 
capital  stock,  shall  be  effectual  to  adopt  a  code  of  by-laws  without  a  meeting 
for  that  purpose;  provided,  however,  that  any  corporation  incorporated  in  this 
State  after  the  taking  effect  of  this  act  may  by  its  articles  of  incorporation  pro- 
vide that  each  stockholder  shall  have  only  one  vote  on  any  question  arising 
at  any  of  its  stockholders'  meetings  regardless  of  the  amount  of  stock  owned,  and 
provided  further  that  any  corporation  may  amend  its  articles  of  incorporation 
at  any  time  and  adopt  such  provisions  of  unit  vote  by  the  unanimous  vote  of 
all  Stockholders  owning  stock  in  such  corporation  (haws  of  1911,  chap.  101). 

10.  Organization  Meeting.  —  In  the  absence  of  a  provision  in  the  articles 
providing  otherwise  the  organization  meeting  must  be  held  within  the  State 
(sec.  4217).  By  making  provision  in  the  articles  therefor  all  meetings  may  he 
held  without  the  State,  at  some  place  within  the  United  States  (sec.  4520). 
Unless  the  same  is  waived  in  writing  by  all  the  incorporators,  notice  of  the 
organization  meeting  must  be  published  twice  a  week  for  two  successive  weeks 

477 


DIGEST    OF    INCORPORATION    ACTS.  —  NORTH   DAKOTA. 

in  a  newspaper  published  in  the  county  where  the  corporation's  principal  office  is 
located  (sec.  4201).  The  by-laws  adopted  at  this  organization  meeting  must  be 
certified  by  a  majority  of  the  directors  and  kept  in  the  book  of  by-laws  (sec. 
4204). 

11.  Meetings  of  Stockholders  and  Directors.  —  In  the  absence  of  a  pro- 
vision in  the  articles  providing  otherwise  meetings  of  stockholders  and  directors 
for  the  election  of  officers  of  the  corporation  must  be  held  at  its  principal  place 
of  business  within  the  State.  Other  meetings  of  the  board  of  directors  may  be 
held  at  such  place  within  or  without  the  State  as  the  by-laws  may  provide 
(sec.  4217).  By  making  provision  in  the  articles  therefor,  all  meetings  may 
be  held  without  the  State  at  some  place  within  the  United  States  (sec. 
4520). 

12.  Directors'  Qualifications  and  Liabilities. — a.  Qualifications. 
There  must  be  at  least  three  and  not  more  than  eleven  directors,  all  of 
whom  must  be  stockholders,  and  one  a  resident  of  the  State  (sec.  4208). 
Power  to  make  by-laws  may  be  delegated  to  the  board  of  directors  (sec. 
4204). 

b.  Liabilities.  —  Directors  are  liable  to  creditors  to  the  extent  of  the  amount 
of  debts  in  excess  of  the  subscribed  capital  stock.  They  are  also  liable  for  the 
declaration  of  illegal  dividends.  Express  provision  is  made  in  the  act  for  their 
removal  from  office  (sees.  4210,  4211  as  amended  by  Laws  of  1909,  chap.  63). 
Directors  are  also  liable  for  illegal  issue  of  bonds  (sec.  2905).  Directors  in 
mining  and  manufacturing  companies  are  liable  for  violations  of  law  which 
result  in  insolvency  of  the  company  (sec.  3161).  There  is  also  a  liability  for 
issuing  stock  at  less  than  par  value  paid  thereon  (sec.  4194).  They  are  also- 
liable  for  making  false  reports,  certificates,  etc.  (sees.  4212,  4521).  For  issuing 
stock  or  bonds  for  insufficient  value  given  therefor  in  property  or  labor,  they 
are  liable  for  the  difference  between  the  value  of  the  stock  or  bonds  issued  and 
the  actual  value  of  the  property  or  labor  (sec.  4195). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent  of 
their  unpaid  stock  subscriptions.  Stockholders  of  manufacturing  and  mining 
corporations  are  jointly  and  severally  liable  for  all  debts  to  mechanics,  work- 
men, and  laborers  employed  by  such  corporation  (sees.  ,2902,  3157). 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate  show- 
ing the  number  of  shares  owned  by  him,  signed  by  the  president  and  secretary 
(sec.  4194). 

No  shares  or  certificates  of  stock  in  any  mining  corporation  established 
under  the  laws  of  this  State,  or  of  any  State,  Territory,  province,  country,  or 
government,  shall  be  sold  or  offered  for  sale  within  this  State  by  such  cor- 
poration, or  by  any  person,  firm,  association,  or  corporation  acting  as  agent, 
representative,  attorney,  or  broker,  for  such  corporation,  until  such  corpora- 
tion shall  have  filed  in  the  office  of  the  Secretary  of  State  a  statement  under 
oath,  showing  the  financial  condition  of  such  corporation;  the  location  of  the 
mine  or  mines,  owned  by  such  corporation,  with  plans  of  the  same ;  the  amount 
of  work  done  therein  and  the  condition  of  the  plant  and  machinery  connected 
therewith.  Such  statement  shall  be  signed  by  the  president,  secretary,  and 
treasurer  of  the  corporation,  and  shall  be  verified  by  the  oath  of  each  of  such 
officers  to  the  effect  that  the  same  is  in  all  respects  true  (Laws  of  1909,  chap. 
169,  sec.  1). 

The  statement  provided  for  in  section  1  of  this  act  shall  be  substantially 
in  the  following  form : 

478 


DIGEST    OF   INCORPORATION    ACTS.  —  NORTH   DAKOTA. 


STATEMENT 

of  the a  corporation  under  the  laws  of  the  State,  Territory,  or 

province  of and  operating mines  located  in  or  near 

the  town   of  or  mining  district  of county   of State 

of 


1.  Amount  of  authorized  capital  stock 

2.  Amount  of  capital  stock  issued 

3.  Amount  of  capital  stock  held  by  corporation 

4.  Amount  of  capital  stock  issued  in  payment  of  property 

5.  Amount  of  capital  stock  sold  for  cash 

6.  Amount  of  cash  received  in  payment  for  stock 

7.  Value  and  description  of  property  received  in  payment  for  stock 

8.  Amount  of  debts  and  liabilities  in 

(a)  Bonds  (stating  rate  of  interest  and  time  at  which  bonds  fall  due) 
(6)  Other  indebtedness 

9.  Amount  of  cash  on  hand 

10.  Amount  of  credits  and  estimated  value  thereof: 

(a)  Notes 

(b)  Bills  receivable 

(c)  Accounts  receivable 

11.  Present  value  of  property  of  corporation 

12.  Number  and  amount  of  dividends  declared. 

13.  Rate  of  last  dividend,  and  date  when  same  was  declared  and  paid. 

II. 

1.  Location  of  property  owned  (to  be  accompanied  by  plans  of  the  same) 


2.  Amount  of  work  done  on  the  property,  showing  extent  of  development. 

3.  Amount  of  cash  expended  for  improvements  on  said  properties 

4.  Description  of  plant  and  machinery  and  their  present  condition.  Dated 
at this day  of 191.  . 

President. 

Secretary. 

Treasurer. 

State  of ) 

County  of ) 

On  this day  of 19 .  . ,  personally  appeared 

president  and secretary  and treasurer  of  the 

and  who,  being  by  me  duly  sworn,  did  each  for  himself  depose  and  say  that 
the  foregoing  statement  by  them  signed  is  in  all  respects  correct,  true,  and 
accurate. 

Notary  Public 

A  fee  of  $25  for  filing  such  statement  shall  be  paid  to  the  Secretary  of  Stale 
by  such  corporation,  at  the  time  such  statement  is  presented  for  filing  (Laws  of 
1909,  chap.  169,  sec.  2). 

479 


DIGEST    OF    INCORPORATION    ACTS.  —  NORTH    DAKOTA. 

15.  Preferred  Stock.  —  Laws  of  1909,  chap.  61,  authorizes  the  issuance 
of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  for  money,  labor 
done,  or  property  estimated  at  its  true  money  value  actually  received  by  it.  All 
officers  who  consent  to  the  issuance  of  stock  for  labor  or  property  in  excess  of 
its  actual  cash  value,  or  who,  having  knowledge  thereof,  do  not  formally  dissent 
therefrom,  are  jointly  and  severally  liable  to  creditors  of  such  corporation  for 
the  difference  between  the  actual  value  of  such  labor  or  property  at  the  time 
the  stock  was  issued  and  the  par  value  of  the  stock  issued  therefor.  Corpora- 
tions are  expressly  forbidden  to  accept  notes  in  payment  of  stock  subscriptions 
(sees.  2877,  2878).  Corporations  are  expressly  forbidden  to  issue  stock  with  the 
understanding  that  the  full  par  value  shall  not  be  paid  (sec.  287G).  The  act  pro- 
vides that  the  directors  named  in  the  certificate  of  incorporation  shall  proceed 
to  open  books  of  subscription  to  the  capital  stock  then  unsubscribed,  and  to 
secure  subscriptions  to  the  capital  stock  still  unsubscribed,  and  to  secure  sub- 
scription to  the  full  amount  of  the  fixed  capital  (sec.  2874). 

17.  Books.  —  Regular  books  of  account  of  all  of  the  business  of  the  corpo- 
ration must  be  kept,  which  with  the  vouchers  shall  at  all  reasonable  times  be 
open  for  the  inspection  of  any  of  the  stockholders,  and  any  stockholder  in  mak- 
ing such  inspection  shall  be  privileged  to  take  with  him  an  expert  accountant 
to  aid  him  in  making  the  inspection,  and  as  often  as  once  in  each  year  a  statement 
of  said  accounts  shall  be  made  by  order  of  the  directors  and  laid  before  the-- 
stockholders  (sec.  4516,  Laws  of  1907,  chap.  55).  Stock  and  transfer  books 
must  be  kept  which  are  open  to  tins  inspection  of  stockholders  and  creditors 
(sec.  4226). 

18.  Office  and  Agent.  —  All  corporations  must  maintain  an  office  within 
the  State,  and  an  agent  to  receive  process  (sees.  2861,  2885,  2907,  3160,  3265  a). 

19.  Reports.  —  Must  file  annually  with  the  Secretary  of  State  an  anti- 
trust affidavit.  The  fifing  fee  is  $2.50  (Laws  of  1905,  chap.  188).  Between  July 
1st  and  August  1st  every  domestic  or  foreign  corporation  must  report  to  the 
Secretary  of  State,  on  blank  forms  sent  out  by  him  before  June  1st,  the  location 
of  its  principal  office  in  the  State,  names,  post-office  addresses,  and  residence  of 
its  officers,  with  date  of  expiration  of  their  respective  terms  of  office,  whether 
or  not  the  corporation  is  pursuing  active  business  under  its  charter  and  the  kind 
of  business  engaged  in.  The  report  is  to  be  sworn  to  by  one  of  the  chief  officers 
under  the  corporate  seal.  A  $50  penalty  for  failure  for  sixty  days  after  notice 
to  file  such  report  by  registered  letter,  forfeiture  of  charter  or  right  to  do  business 
by  entry  on  records  in  Secretary  of  State's  office  (Law  of  1905,  chap.  65).  Tax 
returns  sworn  to  by  the  president,  secretary,  or  principal  accounting  officer  must 
be  made  to  the  county  assessor  where  the  principal  office  is  located,  or  if  there 
is  no  such  office,  where  the  business  is  carried  on  (sec.  1183).  These  returns  are 
filed  between  April  1st  and  June  1st  of  each  year  as  of  April  1st  (sec.  1189),  and 
set  forth  (1)  name  and  location  of  company ;  (2)  amount  of  capital  stock  author- 
ized and  number  of  shares  into  which  it  is  divided.  (3)  Amount  of  capital  stock 
paid  in.  (4)  Market  value,  or  if  there  is  no  market  value,  the  actual  value  of 
the  shares  of  stock.  (5)  Total  amount  of  indebtedness  except  that  for  current 
expenses,  excluding  from  such  expenses  the  amount  paid  for,  purchase  or  im- 
provement of  property.  (6)  Value  of  real  property.  (7)  Value  of  personal 
property  (sec.  4518). 

Every  mining,  manufacturing,  or  other  industrial  company  must  annually, 
within  twenty  days  from  January  1st,  make  a  report  signed  by  the  president  and 
480 


DIGEST    OF    INCORPORATION    ACTS.  —  NORTH    DAKOTA. 

a  majority  of  the  directors,  verified  by  the  president  and  secretary,  to  be  pub- 
lished in  the  newspaper  nearest  the  corporation's  place  of  business,  and  to  be 
filed  with  the  register  of  deeds  of  the  county  in  which  its  business  is  carried  on, 
stating  the  capital  stock  and  the  amount  thereof  actually  paid  in.  amount  and 
nature  of  its  indebtedness  and  amounts  due  the  corporation;  number  and 
amounts  of  dividends  and  when  paid,  and  the  net  profits.  Neglect  to  make, 
publish,  and  file  such  report  is  a  misdemeanor  (sec.  4518).  Publication  of  notice 
of  meetings  may  be  dispensed  with  by  waiver  or  written  assents,  except  in  case 
of  increase  of  stock  or  indebtedness  where  personal  service  can  be  had. 
Notices  of  dissolution  or  of  sale  of  stock  for  non-payment  of  assessments  must 
be  published.  'All  corporations  engaged  in  transacting  business  in  this  State 
who  shall  issue,  sell  or  offer  for  sale  their  stocks,  securities,  notes,  obligations, 
bonds  or  other  evidences  of  indebtedness  by  whatever  name  the  same  may  be 
designated,  shall  on  demand  of  the  State  Bank  Examiner  furnish  him  with  a 
detailed  itemized  report  of  their  assets,  Liabilities  and  business  transacted,  which 
reports  shall  be  made  to  the  State  Examiner  in  such  form  as  he  may  prescribe, 
and  shall  be  made  and  filed  in  his  office  for  the  information  of  the  public.  Such 
reports  shall  be  verified  by  the  oath  of  the  Secretary  or  chief  executive  officer 
of  such  corporation. 

Sec.  2.  When  requested  in  good  faith  by  any  resident  of  this  State  and 
when  good  faith  and  sufficient  reasons  are  given  therefor,  the  State  Examiner 
may,  if  necessary,  cause  an  examination  of  the  financial  condition  of  such  cor- 
poration to  be  made,  and  he  shall  report  the  findings  thereof  to  the  person  ap- 
plying for  such  examination.  His  powers  and  duties  in  connection  therewith 
shall  be  the  same  as  in  the  examination  of  banks,  and  the  same  fees  shall  be 
charged  and  paid  therefor  as  for  the  examination  of  banks.  His  report  shall  be 
submitted  to  and  filed  with  the  State  Banking  Board. 

Sec.  3.  The  State  Banking  Board,  on  being  satisfied  of  the  insolvency,  mis- 
management, fraud  or  breach  of  trust  of  any  such  corporation,  or  of  any  viola- 
tion of  any  provision  of  this  act  by  any  such  corporation,  may  forthwith  take 
charge  of  such  corporation  pending  action  in  the  District  Court  to  dissolve  and 
wind  it  up,  which  action  shall  be  brought  by  the  Attorney-General  in  the  name 
of  the  State,  under  the  direction  of  such  Board. 

Sec.  4.  Any  officer,  agent  or  employee  of  any  such  corporation  who  makes 
or  subscribes  any  false  report  under  this  act,  or  who  hinders,  deceives  or  ob- 
structs the  State  Examiner  or  his  deputy  in  the  discharge  of  any  lawful  duty 
hereunder,  shall  on  conviction  for  each  offence  be  punished  by  fine  of  not  less 
than  150  and  not  more  than  $1,000,  or  by  imprisonment  in  the  jail  of  the  county 
for  not  more  than  one  year,  or  by  both  such  fine  and  imprisonment  (Laws  of 
1911,  chap.   L02,  sec.  1). 

20.  Anti-Trust  Statute.  —  The  anti-trust  Act  of  North  Dakota  is  to  be 
found  in  Laws  of  1907,  chap.  258,  259,  260. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charter  may  be 
forfeited  for  entering  illegal  trusts  and  combinations  (Laws  of  1907,  chap.  258). 
It  may  also  be  forfeited  for  misuser  or  non-use  by  proper  act  inn  taken  by  the 
State.  Also  for  failing  for  one  year  to  transact  its  usual  business  within  the 
State,  or  for  failing  for  one  year  to  keep  and  maintain  a  public  office  a1  its 
principal  place  of  business  within  the  State  for  the  transaction  of  its  usual  and 
regular  business,  and  at  the  same  time,  by  instrument  duly  filed  in  the  Secretary 
of  State's  office,  appoint  tlie  last  named  officer  its  resident  agent,  upon  whom 
process  may  be  served.     Also  for  failure  to  organize  and  commence  bu  u 

31  481 


DIGEST    OF   INCORPORATION   ACTS.  —  NORTH   DAKOTA. 

within  one  year  (sec.  4232) ;  or  for  failure  to  file  annual  reports  within  sixty 
days  after  notice  received;,  or  for  violation  of  anti-trust  act  (sec.  2913;  Laws 
of  1905,  chap.  188). 

22.  Amendments.  —  To  increase  or  diminish  the  capital  stock  corporate 
action  must  be  taken  at  a  meeting  of  the  stockholders  called  for  that  purpose 
by  the  directors  as  follows :  Notice  of  the  time  and  place  of  the  meeting,  stating 
its  object  and  the  amount  to  which  it  is  proposed  to  increase  or  diminish  its 
capital  stock,  must  be  personally  served  on  each  stockholder  resident  in  the  State 
sixty  days  prior  to  the  time  of  such  meeting  at  his  place  of  residence,  if  known ; 
and  the  notice  must  be  given  to  stockholders  whose  places  of  residence  are  un- 
known, or  who  are  not  residents  in  the  State,  by  the  publication  of  such  notice 
in  a  newspaper  published  in  the  county  where  the  principal  office  of  the  corpora- 
tion is  situated  not  less  than  once  a  week  for  sixty  days  prior  to  such  meeting. 
The  capital  stock  must  in  no  case  be  diminished  to  an  amount  less  than  the 
indebtedness  of  the  corporation,  or  the  estimated  cost  of  the  works  which  it  may 
be  the  purpose  of  the  corporation  to  construct.  At  least  two-thirds  of  the  entire 
capital  stock  must  be  represented  by  the  vote  in  favor  of  the  increase  or  diminu- 
tion before  it  can  be  effected.  A  certificate  must  be  signed  by  the  chairman  and 
secretary  of  the  meeting  and  a  majority  of  the  directors  showing  a  compliance 
with  the  requirements  of  this  section,  the  amount  to  which  the  capital  stock  has 
been  increased  or  diminished,  the  amount  of  stock  represented  at  the  meeting, 
and  the  vote  by  which  the  object  was  accomplished  (sec.  4224). 

Articles  may  be  amended  in  any  respect  desired  at  a  meeting  called  for  that 
purpose  by  the  directors  as  follows :  Notice  of  the  time  and  place  of  the  meeting, 
stating  its  object,  must  be  served  in  the  manner  prescribed  in  the  case  of  increase 
or  decrease  of  capital  stock.  At  least  two-thirds  of  the  entire  capital  stock  must 
be  represented  by  the  vote  in  favor  of  the  amendment  or  change  in  the  articles 
of  incorporation.  A  certificate  must  be  signed  by  the  chairman  and  secretary  of 
the  meeting  and  a  majority  of  the  directors,  showing  a  compliance  with  the  re- 
quirements of  this  section,  the  articles  to  be  amended  or  changed,  the  amount 
of  stock  or  the  number  of  members  represented  at  the  meeting,  and  the  vote  by 
which  the  object  was  accomplished.  The  certificate  must  be  filed  in  the  office 
of  the  Secretary  of  State,  there  to  be  recorded  in  the  book  of  corporations,  and 
thereupon  the  articles  shall  be  so  amended.  The  written  assent  of  the  holders 
of  three-fourths  of  the  capital  stock  or  members  shall  be  as  effectual  to  authorize 
the  change  or  amendment  of  the  articles  of  incorporation  as  if  a  meeting  of  the 
stockholders  as  prescribed  by  this  section  was  called  and  held ;  upon  such  written 
assent  the  directors  may  proceed  to  make  the  certificate  to  the  Secretary  of  State 
as  herein  provided  (sees.  4227,  4229,  4230 ;  as  to  change  of  corporate  domicile, 
see  sec.  4230). 

23.  Extension  of  Corporate  Existence.  —  Corporations  may  be  extended 
for  an  additional  period  of  twenty  years  if  desired  (sec.  4227;  see  Laws  of  1911, 
chap.  101). 

24.  Dissolution.  —  Dissolution  may  be  had  through  the  District  Court  by 
the  State  or  by  a  private  person  in  the  name  of  the  State  (sec.  4231). 

25.  Annual  License  Fee.  —  There  is  no  annual  license  fee. 

26.  Foreign  Corporations.  —  Foreign  corporations  must  file  articles  of 
incorporation  and  execute  a  power  of  attorney  to  the  Secretary  of  State  to 
receive  process  before  commencing  business  (sees.  4695-4699).  They  must 
also  maintain  an  office  within  the  State  (Cons.,  Art.  VII.  sec.  136).  The  Secre- 
tary of  State  collects  a  fee  of  $20  for  filing  and  recording  certified  copy  of  articles 

482 


DIGEST    OF    INCORPORATION    ACTS.  —  NORTH   DAKOTA. 

of  incorporation  of  foreign  companies,  and  So  for  the  filing  and  recording  of 
appointment  of  Secretary  of  State  as  attorney  to  receive  service  of  process. 
Foreign  corporations  must  also  file  annual  reports.  (See  ante,  sec.  19.)  The 
filing  fee  is  $2.50  (Laws  of  1905,  chap.  1SS,  sec.  5). 

G.  R.  L.  Co.  t>.  Company,  6  N.  D.  276;   69  N.  W.  691;    Nat.  Cash  Register  Co.  v.  Wilson, 
9  N.  D.  112;   81  N.  W.  285;    Washburn  Mills  Co.  v.  Bartlett,  3  N.  D.  138;    64  N.  W.  644. 


483 


DIGEST    OF   INCORPORATION   ACTS.  —  OHIO. 


OHIO. 

(The  references  cited  below  are  to  Bates's  Annotated  Statutes,  1904,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  Ohio  is  to  be  found  in  the  revised  statutes 
of  Ohio,  1904,  sees.  3232,  3269-3274  inclusive;  also  sees.  3855-3867.  Cor- 
porations may  be  organized  for  any  purpose  for  which  individuals  may  law- 
fully associate  themselves,  excepting  for  carrying  on  professional  business 
(sec.  3235). 

2.  Incorporators.  —  Not  less  than  five,  a  majority  of  whom  must  be 
citizens  of  Ohio  (sec.  3236). 

Hessler  v.  Company,  61  Ohio  St.  621 ;  56  N.  E.  469. 

3.  Contents  of  Articles  of  Incorporation.  —  The  articles  must  set  forth : 

a.  Name. — The  name  must  begin  with  the  word  "The"  and  end  with 
the  word  "Company."  Similarity  of  names  as  between  domestic  corporations 
is  forbidden  (sec.  3236,  sub.  1 ;  sec.  3238). 

b.  Domicile.  —  Place  where  it  is  to  be  located,  and  where  its  principal 
business  is  to  be  located  (sec.  3236,  sub.  2). 

c.  Purpose.  —  The  purpose  for  which  it  is  formed.  This  provision  is  con- 
strued by  the  Secretary  of  State  to  forbid  the  incorporation  of  companies  for 
more  than  one  purpose  (sec.  3236,  sub.  3). 

d.  Capital  Stock.  —  Amount  of  its  capital  stock.  Number  of  shares.  Capi- 
talization and  par  value  may  be  any  amount  (sec.  3236,  sub.  4).  If  a  corpora- 
tion desires  to  do  away  with  cumulative  voting  provided  for  by  the  act,  a 
provision  must  be  inserted  in  the  articles  expressly  providing  that  each  share 
of  stock  shall  be  entitled  to  one  vote  and  no  more  (sec.  3245  a).  Provision 
may  be  inserted  in  subdivision  d,  providing  for  the  issuance  of  preferred  stock, 
and  that  the  holders  thereof  shall  be  entitled  to  dividends  of  eight  per  cent 
per  annum  in  each  year  in  preference  to  all  other  stockholders  (sec.  3235  a). 
Duration  may  be  perpetual  except  for  corporations  engaged  in  buying  and  sell- 
ing real  estate,  which  are  limited  to  twenty-five  years  (sec.  3235).  Corpora- 
tions may  also  provide  in  their  articles  that  each  stockholder,  irrespective  of 
the  amount  of  stock  he  may  own,  shall  be  entitled  to  one  vote  and  no  more  at 
any  election  of  directors,  etc.  (sees.  3245  a  1,  3245  b  1). 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of  com- 
mon law  powers,  the  following  additional  powers  are  granted  :  To  issue  preferred 
stock,  to  authorize  voting  by  proxy  in  the  election  of  directors,  also  for  cumula- 
tive voting  in  the  election  of  directors,  if  desired ;  for  forfeiture  of  stock  for 
non-payment  of  assessments,  and  for  consolidating  with  other  corporations. 
May  hold  stock  in  other  non-competing  corporations  (sees.  3239,  3235,  3244, 
3245,  3253,  3256).  Manufacturing  corporations  may  subscribe  for  stock  in  rail- 
road and  transportation  companies  (sec.  3863).  Mining  and  manufacturing 
corporations  may  hold  and  convey  real  estate,  and  transact  business  outside 
of  the  State  (sec.  3862).  Corporations  may  stipulate  that  their  obligations  may 
be  converted  into  stock  (sec.  3257).  Corporations  may  also  sell  out  their  entire 
property  and  assets  under  certain  restrictions.    (See  Laws  of  1906,  pp.  229-231.) 

Greene  v.  Company,  62  Ohio  St.  67;  56  N.  E.  642;  Lander  v.  Burke,  65  Ohio  St.  532; 
63  N.  E.  69. 

484 


DIGEST    OF    INCORPORATION    ACTS.  —  OHIO. 

5.  Procuring  the  Charter.  —  Articles  must  be  subscribed  and  acknowl- 
edged by  each  of  the  incorporators,  and  the  official  character  of  the  officer  taking 
the  acknowledgment  must  be  certified  to  by  the  clerk  of  the  court  of  common 
pleas  of  the  county  wherein  taken.  The  articles  must  then  be  filed  in  the  office 
of  the  Secretary  of  State  (sees.  3236,  3238). 

State  ex  rel  v.  Ins.  Co.,  49  Ohio  St.  440;  31  N.  E.  65S;  Society  Perun  v.  Cleveland,  43 
Ohio  St.  481;    3  N.  E.  357. 

6.  Corporate  Indebtedness.  —  Corporate  indebtedness  must  not  exceed 
the  amount  of  its  authorized  capital  stock.  Provision  may  be  made  in  the 
case  of  mortgage  indebtedness  where  the  same  does  not  exceed  one-half  of 
the  capital  stock  actually  paid  in,  that  the  holders  of  the  debt  secured  by  such 
mortgage  shall  have  the  right  to  convert  the  same  into  either  common  or  pre- 
ferred stock  (sees.  3256,  3257,  3265). 

7.  Organization  Tax.  —  Corporations  having  authorized  capital  stock  of 
810,000  or  under,  810;  corporations  with  more  than  810,000,  one-tenth  of  one 
per  cent  on  such  capital  stock  (sees.   148,  148  a). 

8.  Filing  and  Recording  Fees.  —  The  payment  of  the  organization  tax 
includes  the  filing  and  recording  fees  in  the  Secretary  of  State's  office.  The 
incorporators  are  also  entitled  free  of  charge  to  one  certified  copy  of  the  articles 
of  incorporation.  For  additional  copies  the  charge  is  10  cents  per  hundred 
words  and  50  cents  for  attaching  certificate.  The  cost  of  filing  certificate  as 
to  stock  subscriptions  is  $2.  For  filing  and  recording  amendments  to  articles 
of  incorporation  the  charge  is  $5. 

9.  Commencing  Business.  —  The  incorporators,  or  a  majority  of  them, 
must  order  books  to  be  opened  for  subscriptions  to  the  capital  stock  at  such 
times  and  places  as  they  may  deem  expedient.  The  act  requires  thirty  days' 
notice  thereof,  unless  the  incorporators  waive  the  same  in  writing,  such  waiver 
to  be  entered  in  the  corporate  records  (sec.  3242,  as  amended  by  Laws  of  1906, 
p.  294).  As  soon  as  ten  per  cent  of  the  capital  stock  is  subscribed,  the  sub- 
scribers of  the  articles  of  incorporation,  or  a  majority  of  them,  shall  so  certify 
in  writing  to  the  Secretary  of  State,  and  thereupon  give  notice  to  the  stock- 
holders as  provided  in  sec.  3242,  to  meet  at  such  time  and  place  as  they  may 
designate  for  the  purpose  of  choosing  not  less  than  five,  nor  more  than  fifteen 
directors  who  shall  continue  in  office  until  the  time  fixed  for  the  annual  election 
(Laws  of  1906,  p.  294).  Publication  of  this  notice  may  be  waived  by  all  of  the 
stockholders  in  writing,  who  must  be  present  either  in  person  or  by  proxy 
(Laws  of  1906,  p.  294).  As  soon  as  these  directors  are  elected  the  corporation 
may  begin  business.  Business  must  be  commenced  within  five  years  after  date 
of  incorporation  (sees.  3242-3244  inclusive,  6780,  Laws  of  1904,  p.  170). 

State  ex  rel.  v.  Ins.  Co.,  49  Ohio  St.  440;  31  N.  E.  658. 

10.  Organization  Meeting.— The  organization  meeting  must  be  held 
within  the  State  (sec.  3252).  The  law  provides  that  the  incorporators  shall 
give  notice  to  the  stockholders,  as  provided  in  the  Revised  Statutes  (sec.  3242), 
to  meet  at  such  time  and  place  as  may  be  designated,  for  the  purpose  of  choos- 
ing not  less  than  five  nor  more  than  fifteen  directors,  who  shall  continue  in 
office  until  the  time  chosen  for  the  annual  election.  The  law,  however,  provides 
thai  in  case  all  the  subscribers  to  the  capital  stock  are  present  in  person  or  by 
proxy,  the  notice  required  by  statute  may  be  waived  in  writing  (Laws  of  1904, 
p.  170).  At  the  first  election  incorporators  are  authorized  to  act  as  inspectors 
of  election  (sec.  3245). 

485 


DIGEST    OF   INCORPORATION   ACTS.  —  OHIO. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meet- 
ings must  be  held  within  the  State.  Directors'  meetings  may  be  held  without 
the  State  if  the  by-laws  so  provide  (sees.  323S  a,  3245  a  (1),  3252).  The  law 
provides  that  a  corporation  may  provide  in  its  articles  of  incorporation  that 
each  stockholder,  irrespective  of  the  amount  of  stock  he  may  own,  shall  be 
entitled  to  one  vote  and  no  more  at  any  election  of  directors  (sec.  3245  a).  The 
law  further  provides  that  where  a  corporation  limits  the  votes  of  its  stock- 
holders in  the  manner  indicated  above,  then  in  such  case,  no  person  shall  hold 
or  own  stock  in  excess  of  $1,000  face  value  (sec.  3245  b  (1)).  As  to  right  to 
cumulate  votes,  see  State  ex  rel.  Stockley,  45  Ohio  St.  304 ;  State  ex  rel.  Hen- 
derson v.  Hogan,  1  W.  L.  B.  227;  State  ex  rel.  Dent  v.  Halloway,  1  C.  C. 
157. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  not  less  than  five  nor  more  than  fifteen  directors  (Laws  of  1906,  pp.  294, 
295).  All  must  be  stockholders,  and  a  majority  citizens  of  Ohio.  The  statute 
expressly  authorizes  the  directors  to  adopt  a  code  of  by-laws  for  their  own 
management.  The  directors  must  each  subscribe  to  an  oath  of  office  (sees.  3244, 
3247,  3248,  3250;  Laws  of  1909,  p.  12).  Cumulative  voting  is  permitted  in  the 
election  of  directors. 

6.  Liabilities.  —  Directors  are  liable  for  the  illegal  declaration  of  dividends 
(sees.  3269,  1-4).  They  are  also  personally  liable  for  contracting  debts  before 
ten  per  cent  of  the  capital  stock  has  been  subscribed,  and  for  issuing  false 
statements  and  reports  (Laws  of  1908,  p.  336).  There  is  also  a  liability  for 
allowing  contributions  of  corporation  for  political  purposes  (Laws  of  1909, 
p.  23). 

Trust  Co.  v.  Floyd,  47  Ohio  St.  525;  26  N.  E.  110. 

13.  Stockholders'  Liabilities.  —  Since  the  Constitutional  Amendment 
adopted  in  1903,  stockholders  in  Ohio  corporations  are  liable  only  to  the  extent 
of  their  unpaid  stock  subscriptions.  (See  former  statute,  sec.  3258;  see  also 
Laws  of  1904,  p.  396.)  The  law  requires  that  a  majority  of  the  subscribers  to 
the  articles  of  incorporation  shall  certify  to  the  Secretary  of  State  that  ten 
per  cent  of  the  capital  stock  is  subscribed.  The  law  further  provides  that  such 
stockholders  shall  be  liable  to  any  person  affected  thereby  to  the  amount  of 
any  deficiency  in  the  actual  payment  of  such  ten  per  cent  at  the  time  of  so  cer- 
tifying (Laws  of  1904,  p.  170). 

Wick  Nat.  Bank  v.  Union  Nat.  Bank,  62  Ohio  St.  446;  57  N.  E.  320;  Kulp  v.  Fleming, 
65  Ohio  St.  321 ;   62  N.  E.  334;   Boice  v.  Hodge,  51  Ohio  St.  236;   37  N.  E.  265. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him,  signed  by  the  president  and  secretary  (see.  3254) .  There 
shall  be  no  hen  in  favor  of  a  corporation  upon  the  shares  represented  by  a  cer- 
tificate issued  by  such  corporation,  and  there  shall  be  no  restriction  upon  the 
transfer  of  shares  so  represented  by  virtue  of  any  by-law  of  such  corporation  or 
otherwise,  unless  the  right  of  the  corporation  to  such  lien  or  the  restriction  is 
stated  upon  the  certificate  (Laws  of  1911,  p.  503,  sec.  15). 

15.  Preferred  Stock.  —  Preferred  stock  is  expressly  authorized  by  pro- 
viding therefor  in  the  articles  of  incorporation  or  by  subsequent  action  of 
the  stockholders.  Holders  of  preferred  stock  are  entitled  to  dividends  not  io 
exceed  eight  per  cent  per  annum  out  of  the  surplus  profits  in  preference  to  all 
other  stockholders.  At  no  time  can  the  preferred  stock  exceed  two-thirds  of 
the  actual  stock  paid  in  in  cash  or  property  (sees.  3235  a,  3263). 

486 


DIGEST    OF    INCORPORATION    ACTS.  —  OHIO. 

16.  Payment  of  Capital  Stock.  — Stock  may  be  issued  only  for  money 
or  property.     (See  sec.  3235  a. ) 

Gates  v.  Company,  57  Ohio  St.  60;  Peter  v.  Company,  56  Ohio  St.  181. 

17.  Books.  —  Must  keep  a  stock  book  open  to  inspection  of  stockholders 
in  which  are  recorded  subscriptions  and  transfers  of  stock.  Minutes  of  the 
stockholders'  and  directors'  meetings  must  be  kept  (sec.  3254).  Manufac- 
turing companies  must  keep  their  books  of  account  at  their  principal  office. 
This  is  open  to  inspection  of  assessors. 

C.  V.  Co.  v.  Hoffmeister,  62  Ohio  St.  189;    56  N.  E.  1033. 

18.  Office  and  Agent.  —  Every  corporation  must  maintain  an  office  and 
agent  to  receive  service  of  process,  and  keep  accounts  of  financial  condition, 
and  also  transfer  books  (sees.  3236,  3855,  5651). 

Mercantile  Tr.  Co.  v.  Elsa  Iron  Works,  4  Ohio  Cir.  Ct.  579. 

19.  Reports.  —  During  May  a  report  must  be  filed  with  the  Secretary  of 
State,  containing  among  other  things  names  and  addresses  of  the  officers  and 
directors;  amount  of  capital  stock  subscribed,  issued,  outstanding,  and  paid 
in ;  kind  of  business  engaged  in.  Annual  reports  must  also  be  made  to  stock- 
holders (sees.  3268,  3269.    Laws  of  1902,  p.  124.    See  also  Act  of  April  12,  1911). 

20.  Anti-Trust  Statute.  —  Ohio  has  a  somewhat  drastic  anti-trust  statute 
on  its  statute-books  (sees.  4427,  1-12). 

State  v.  Gage,  72  Ohio  St.  210. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited  by  the  State  for  misuser  or  non-user  for  five  years,  or  for  violation 
of  the  anti-trust  act,  or  for  failure  to  pay  annual  license  tax ;  also  for  failure  to 
file  annual  report  (sees.  4427-4432,  6760,  6761,  6780;  Laws  of  1904,  pp.  381- 
383). 

State  v.  Company,  62  Ohio  St.  350;  57  N.  E.  62. 

22.  Amendments.  —  Before  the  capital  stock  can  be  increased,  all  of  the 
original  authorized  stock  must  be  fully  subscribed  for,  and  ten  per  cent  paid 
in  either  in  cash  or  in  property.  The  amendment  providing  for  the  increase 
of  stock  is  rendered  effective  by  a  majority  vote  cast  at  a  stockholders'  meet- 
ing called  by  a  majority  of  the  directors.  At  least  thirty  days'  notice  of  the 
time,  place,  and  object  of  such  meeting  must  be  given  by  publication  and  by 
letter  addressed  to  each  stockholder  whose  place  of  residence  is  known.  If 
all  of  the  stockholders  are  present  in  person  or  by  proxy  at  said  meeting,  the 
foregoing  prescribed  notice  may  be  waived.  The  stockholders  must  also  agree 
in  writing  to  said  increase,  naming  the  amount  thereof  to  which  they  agree. 
A  certificate  of  the  action  taken  at  said  meeting  must  be  filed  with  the  Secre- 
tary of  State  (sec.  3262 ;  see  also  Peters  v.  Company,  56  Ohio,  200).  It  would 
appear  to  be  necessary,  also,  that  a  copy  of  such  amendment  to  the  original 
articles  should  be  filed  with  the  Secretary  of  State,  together  with  a  certifi- 
cate thereto  attached,  signed  by  the  president  and  secretary  of  the  corpora- 
tion and  sealed  with  the  coqiorate  seal,  stating  the  nature  and  date  of  the 
adoption  of  the  amendment,  and  certifying  that  a  copy  thereof,  to  which 
the  certificate  is  attached,  is  a  true  copy  of  the  amendment  as  adopted  (sec. 
3238  a). 

A  corporation  may  by  a  vote  of  a  majority  of  its  stock  at  any  regular  meeting 
of  the  company  increase  the  number  of  directors  to  any  Dumber  not  greatei 

487 


DIGEST    OF    INCORPORATION    ACTS. — OHIO. 

than  fifteen ;  in  like  manner  the  number  of  directors  may  be  decreased  to  any 
number  not  less  than  five,  at  any  stockholders'  meeting  called  in  the  manner 
as  provided  in  sec.  246.  At  said  meeting  the  corporation  may  by  a  vote  of  a 
majority  of  its  stock  increase  the  number  of  its  directors  in  the  manner  above 
set  forth,  who  shall  hold  office  respectively  until  the  next  annual  meeting  for 
directors  (Laws  of  1906,  p.  295). 

Any  corporation  may  at  any  meeting  of  its  stockholders,  of  which  and  of 
the  business  to  come  before  said  meeting  thirty  days'  notice  has  been  given  by 
a  majority  of  the  directors  in  a  newspaper  of  general  circulation  published  in 
the  county  where  the  principal  place  of  business  of  said  corporation  is  located, 
by  a  vote  of  three-fifths  of  its  subscribed  capital  stock,  amend  its  articles  so  as 
to  change  its  corporate  name,  or  its  domiciliary  office,  or  so  as  to  modify,  enlarge, 
or  diminish  "the  purposes  for  which  it  is  formed,  provided  the  original  purposes 
are  not  substantially  changed,  or  so  as  to  add  anything  omitted  therefrom,  or 
which  might  lawfully  have  been  provided  for  in  the  original  articles.  When 
adopted,  a  copy  of  such  amendment  with  a  certificate  thereto  attached,  signed 
by  the  president  and  secretary  of  the  corporation  under  the  corporate  seal, 
stating  the  fact  and  date  of  the  adoption  of  the  amendment,  and  that  such 
copy  is  a  true  copy  of  the  original,  must  be  recorded  in  the  office  of  the  Secre- 
tary of  State.  Before  the  amendment  can  take  effect,  the  secretary  of  the 
corporation  must  give  notice  of  such  amendment  for  three  successive  weeks 
in  some  newspaper  of  general  circulation  in  the  county  where  the  principal 
place  of  business  is  located.  Publication  of  all  of  the  foregoing  notices  may 
be  waived  in  writing  by  all  of  the  stockholders  signing  such  waiver  (sec. 
3238  a). 

State  ex  rel.  Taylor,  55  Ohio  St.  67. 

23.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for 
extension  of  corporate  existence. 

24.  Dissolution.  —  A  majority  of  the  managing  board  or  stockholders, 
representing  one-third  of  the  capital  stock,  may  apply  to  the  court  of  common 
pleas  for  dissolution  (R.  S.,  sees.  5651-5688  inclusive,  6781,  6782;  Laws  of  1909, 
pp.  102-104;  O.  L.,  1902,  p.  274).  Charters  may  be  surrendered,  if  desired, 
before  any  instalment  of  capital  stock  has  been  paid  in  or  debts  incurred,  by 
complying  with  the  statute  in  such  case  made  and  provided  (sec.  5674;  Laws 
of  1904,  p.  3S3). 

Domestic  corporations  may  sell  out  their  entire  property  and  assets  under 
the  following  conditions :  First.  That  three-fourths  of  the  directors  of  such 
corporation  shall  authorize  the  execution  of  an  agreement  therefor,  prescribing 
the  terms  and  conditions  thereof,  which  considerations  may  be  money,  stocks, 
bonds,  or  other  instruments  for  the  payment  of  money,  or  any  valuable  con- 
sideration. Second.  Such  sale  must  not  be  made  for  the  purpose  of  forming 
any  "trust  or  combination  for  the  purpose  of  restricting  trade  or  competition. 
Third.  Such  agreement  shall  be  submitted  to  the  stockholders  of  such  corpora- 
tion, at  a  meeting  called  for  the  purpose,  of  taking  the  same  into  consideration, 
of  which  ten  days'  notice  of  the  time  and  place  of  holding  the  same,  and  the 
object  thereof,  shall  be  given  by  registered  letter,  containing  a  written  or 
printed  notice  addressed  to  each  of  the  persons  in  whose  names  the  capital  stock 
of  the  said  corporation  stands  on  the  books  thereof;  and  also  by  like  notice 
published  in  some  newspaper  in  the  city  or  town  where  such  corporation  has 
its  principal  office  or  place  of  business ;  provided  that  in  case  all  the  stockholders 

488 


DIGEST    OF    INCORPORATION    ACTS.  —  OHIO. 

are  present  at  said  meeting  in  person  or  by  proxy,  such  notice  may  be  waived  in 
writing.  At  the  meeting  of  the  stockholders  the  agreement  of  the  directors 
shall  be  considered,  and  the  vote  by  ballot  taken  for  the  adoption  or  rejection 
of  the  same,  and  if  each  share  of  stock  upon  which  has  been  paid  all  the  instal- 
ments called  for  by  the  board  of  directors,  the  holder  thereof  shall  be  entitled 
to  one  vote.  The  ballots  shall  be  cast  in  person  or  by  proxy,  and  if  three-fourths 
of  the  votes  cast  at  the  meeting  be  for  the  adoption  of  the  agreement  by  the 
stockholders  of  said  corporation,  the  officers  thereof  shall  execute  and  deliver 
to  the  purchaser  good  and  sufficient  deeds  to  purchasers  of  all  of  the  property 
and  assets  of  the  corporation  upon  the  terms  and  conditions  in  said  agreement 
provided.  Fourth.  If  any  stockholder  in  the  said  corporation  shall  be  dissatis- 
fied with  the  said  sale  and  refuses  to  participate  in  the  proceeds  thereof,  he  shall, 
within  thirty  days  after  the  adoption  of  such  agreement  by  said  corporation, 
state  his  objections  thereto  in  writing  and  file  the  same  with  said  corporation 
and  demand  in  writing  from  said  corporation  payment  for  his  stock,  and  said 
corporation  shall  within  sixty  days  thereafter  pay  to  him  the  value  of  his 
stock  at  the  time  of  the  adoption  of  said  agreement.  In  case  of  a  disagreement 
as  to  the  value  of  said  stock  it  shall  be  ascertained  by  three  disinterested  persons, 
one  of  whom  shall  be  chosen  by  the  said  stockholder,  one  by  the  directors  of  the 
corporation,  and  the  other  by  the  two  selected  as  aforesaid,  who  shall  conduct 
such  arbitration  in  all  respects  as  provided  by  law  regarding  arbitrations.  And 
in  case  the  said  award  is  not  paid  within  sixty  days  from  the  making  thereof 
and  notice  thereof  given  to  said  stockholder  and  to  said  corporation,  the  amount 
of  the  award  shall  be  evidence  of  the  amount  due  from  such  corporation  and 
may  be  collected  as  other  debts  are  by  law  collectible,  but  on  receiving  payment 
of  the  award  such  stockholder  shall  stirrender  his  stock  to  said  corporation. 
Fifth.  If  any  stockholder  refuses  to  submit  the  question  to  arbitration,  the 
judge  of  the  court  of  common  pleas  shall,  upon  the  application  of  a  director  of 
such  company,  appoint  the  arbitrators,  who  shall  proceed  to  ascertain  the  value 
of  the  stock  in  the  same  manner  as  if  the  question  had  been  submitted  by 
consent  of  both  parties;  and  if  the  party  owning  the  stock  refuses  to  receive 
the  amount  awarded  in  the  case,  the  company  may  deposit  the  same  with  the 
clerk  of  the  court  of  common  pleas  of  the  county  in  which  the  arbitration  is 
held,  which  deposit  shall  operate  the  same  as  if  payment  were  made  to  the 
owner  of  the  stock,  and  shall  further  operate  as  a  cancellation  of  said  stock 
upon  the  books  of  the  company.  In  all  cases  of  such  arbitration  the  party 
desiring  such  arbitration  shall  give  the  opposite  party  ten  days'  notice  at  least 
of  his  intention  to  apply  for  the  judge  for  the  appointment  of  arbitrators,  which 
notice  shall  be  served  in  the  same  manner  as  is  provided  for  the  service  of 
summons  and  shall  specify  the  time  and  place  of  the  hearing  of  the  application  ; 
but  in  cases  of  non-residents,  the  notice  shall  be  by  publication  for  four  con- 
secutive weeks  in  some  newspaper  printed  in  the  county  (Laws  of  1906, 
pp.  229-231). 

2.3.  Annual  License  Fee.  —  One-tenth  of  one  per  cent  upon  subscribed 
or  issued  and  outstanding  stock  (sec.  27S0,  sub.  d.  24).  Tax  is  due  in 
September. 

20.   Foreign  Corporations.  —  Before  commencing  to  transact    bu 
within  the  State  every  foreign  corporation  must,  under  oatli  of  its  president, 
secretary,    treasurer,    superintendent,    or    managing   officer    within    the    State. 
make  and  file  with  the  Secretary  of  State  a  statement  containing  the  following 
facts  :    f  1;   Number  of  shares  of  authorized  capital  stock  and  par  value  thereof  . 

4S9 


DIGEST   OF   INCORPORATION   ACTS.  —  OHIO. 

(2)  Name  and  location  of  the  office  and  officers  of  the  company  in  Ohio,  and 
the  name  and  address  of  the  officers  or  agents  of  the  company  in  charge  of  its 
business  in  Ohio ;  (3)  The  value  of  the  property  owned  and  used  by  the  com- 
pany in  Ohio,  where  situate,  and  the  value  of  the  property  owned  and  used 
outside  of  Ohio ;  (4)  The  proportion  of  the  capital  stock  of  the  company  which 
is  represented  by  property  owned  and  used,  and  by  business  transacted  in  Ohio. 
Thereupon  the  Secretary  of  State  shall  determine  the  proportion  of  the  capital 
stock  represented  by  property  and  business  in  Ohio,  and  shall  impose  and  col- 
lect a  tax  of  one-tenth  of  one  per  cent  upon  the  proportion  of  the  authorized 
capital  stock  of  the  corporation,  represented  by  property  owned  and  used, 
and  business  transacted  in  Ohio.  This  tax  is  payable  annually  thereafter,  and 
can  never  be  less  than  $10  (sec.  2780,  sub.  24-31).  Foreign  corporations  trans- 
acting business  without  a  permit  are  subject  to  fine,  and  are  cut  off  from  all 
recourse  to  the  courts.  The  law,  however,  provides  that  a  foreign  corporation 
obtaining  a  permit  shall  not  be  subject  to  attachment  as  a  foreign  corporation 
(Laws  of  1904,  p.  383). 

It  must  be  noted  that  there  are  two  laws  in  this  State  applying  to  foreign 
corporations.  The  one  referred  to  below  —  the  Act  of  April  25,  1893  —  re- 
quires a  foreign  corporation  doing  business  in  the  State  —  that  is,  a  corporation 
which  maintains  an  office  or  an  agent  in  the  State  to  file  with  the  Secretary  of 
State  a  sworn  copy  of  its  charter  or  articles  of  incorporation,  and  a  statement 
under  its  corporate  seal  setting  forth  the  amount  of  its  authorized  capital  stock, 
the  kind  of  business  proposed  to  be  carried  on,  and  designate  a  principal  office 
or  place  of  business  and  a  person  upon  whom  process  may  be  served,  and  pay  a 
fee  proportioned  to  the  amount  of  its  authorized  capital  stock.  Upon  the 
foregoing  enumerated  papers  being  filed  with  the  Secretary  of  State,  the  latter 
official  is  entitled  to  receive  and  must  be  paid  fees  according  to  the  amount 
of  capital  stock  of  each  foreign  corporation  of  the  character  enumerated  above 
as  follows:  Where  authorized  capital  is  $100,000  or  less,  $15;  more  than 
$100,000  and  not  exceeding  $300,000,  $20;  more  than  $300,000  and  not 
exceeding  $500,000,  $25;  more  than  $500,000  and  less  than  $1,000,000,  $30; 
$1,000,000  or  more,  $50  (R.  S.  sec.  148  d). 

The  other  is  the  Act  of  May  16,  1894,  additional  to  the  Act  of  April  25,  1893, 
but  it  applies  only  to  such  foreign  corporations  as  own  or  use  a  portion  or  all  of 
their  capital  or  plant  in  this  State.  Such  corporations  must  comply  with  both 
laws ;  and,  in  addition  to  the  license  fee  prescribed  by  the  Act  of  April  25,  1893, 
must  pay  a  franchise  tax  of  one-tenth  of  one  per  cent  upon  the  proportion  of 
the  authorized  capital  stock  represented  by  property  owned,  or  business  done 
in  the  State  of  Ohio.  If  only  a  portion  of  the  property  is  owned  and  used,  and 
only  a  portion  of  the  business  is  done  in  this  State,  the  corporation  is  taxed 
only  in  the  proportion  so  represented,  which  is  the  measure  of  the  franchise 
enjoyed  here;  but  if  all  the  property  owned  and  all  the  business  done  by  the 
corporation  is  in  Ohio,  then  the  tax  must  be  paid  on  the  entire  authorized  capital 
stock,  no  matter  if  only  a  portion  of  the  authorized  capital  stock  has  been 
issued. 

Under  section  148,  known  as  the  Massie  Law,  Ohio  corporations  are  required 
to  pay  to  the  State,  for  the  privilege  of  becoming  incorporated,  a  fee  or  franchise 
tax  of  one-tenth  of  one  per  cent  upon  the  authorized  capital  stock.  It  matters 
not  what  the  subsequent  issue  of  capital  stock  may  be,  the  fee  is  based  upon  the 
entire  amount  of  the  authorized  capital  stock.  The  Act  of  May  16, 1894,  is  de- 
signed to  impose  upon  foreign  corporations  the  same  burden  that  is  imposed 

490 


DIGEST   OF    INCORPORATION   ACTS.  —  OHIO. 

upon  domestic  corporations.  It  is  not  for  the  privilege  of  doing  business,  but  is 
a  condition  upon  which  a  foreign  corporation  may  exercise  its  franchises  in 
Ohio.  By  express  provision,  it  exempts  from  its  application  all  corporations 
engaged  in  Ohio  in  interstate  commerce  business,  and  foreign  corporations, 
entirely  non-resident,  soliciting  business,  or  making  sales  in  this  State  by  cor- 
respondence or  travelling  salesmen.  The  tax,  therefore,  is  imposed  only  upon 
those  corporations  which  the  State,  in  the  exercise  of  its  sovereign  power,  may 
either  exclude  from  the  State  altogether,  or  admit  upon  such  terms  and  condi- 
tions as  it  may  see  fit  to  impose.  Foreign  corporations  must  make  annual 
report  to  the  Secretary  of  State  during  the  month  of  September,  setting  forth: 

(1)  Name  of  corporation  and  under  laws  of  what  State  or  country  organized. 

(2)  Location  of  principal  office.  (3)  Names  of  president,  secretary,  treasurer,  and 
directors  and  post-office  address  of  each.  (4)  Date  of  annual  election  of  officers. 
(5)  Authorized  capital  stock  and  par  value  of  each  share.  (6)  Amount  of  stock 
subscribed,  amount  issued,  and  amount  paid  up.  (7)  Nature  of  business  and 
place  or  places  of  business  within  the  State  and  without  the  State.  (8)  Name 
and  location  of  its  office  or  offices  in  Ohio  and  the  name  and  address  of  the 
officers  or  agents  in  charge  of  the  corporate  business  in  Ohio.  (9)  Value  of 
property  owned  and  used  by  the  company  in  Ohio,  where  situated,  and  value 
of  property  owned  and  used  outside  of  Ohio  and  where  situated.  (10)  Change 
or  changes,  if  any,  in  the  above  particulars  since  the  last  report  (Laws  of  1904, 
p.  383). 

This  report  must  be  signed  and  sworn  to  by  one  of  the  executive  officers  of 
the  corporation  and  filed  with  the  Secretary  of  State. 

W.  U.  Telegraph  Co.  v.  Mayer,  28  Ohio  St.  521;  Clarke  v.  C.  R.  R.  &  B.  Co.  et  al.,  50 
Fed.  Rep.  338;  Toledo,  etc.  Co.V  Glum,  etc.  Co.,  55  Ohio  St.  217;  45  N.  E.  197;  Gen.  Elec- 
tric Co.  v.  Lima  Electric  Co.,  4  Ohio  Nisi  Prius  Rep.  167;  State  v.  Sherman,  22  Ohio  St. 
411:  Lander  v.  Burke,  65  Ohio  St.  532;  63  N.  E.  69. 


491 


DIGEST    OF    INCORPORATION    ACTS.  —  OKLAHOMA. 


OKLAHOMA. 

(The  references  cited  below  are  to  Wilson's  Annotated  Statutes  of  1903,  chap.  18,  unless 
otherwise  stated  J 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  is  to  be  found  in  chap.  18  of  Wilson's  Revised 
and  Annotated  Statutes  of  Oklahoma,  1903.  Parties  may  incorporate  under 
the  General  Act  for  the  following  purposes :  Mining,  manufacturing,  and  other 
industrial  pursuits,  the  construction  of  railroads,  wagon  roads,  street  railways, 
electric  light,  power,  and  gas  plants,  water  works,  irrigating  ditches,  eleemosy- 
nary purposes,  for  conducting  the  business  of  insurance,  banks  of  discount  and 
deposit  (but  not  of  issue),  building  and  investment  companies,  loan,  trust,  and 
guarantee  corporations,  merchandizing,  wholesale  or  retail  or  both;  for  the 
purpose  of  locating,  laying  out,  and  improving  town  sites,  and  buying  and  sell- 
ing real  estate  therefor,  including  the  sale  and  conveyance  of  the  same  in  lots, 
subdivisions,  or  otherwise;  for  the  purpose  of  constructing  telegraph  and  tele- 
phone lines  and  systems,  and  the  organization  and  maintenance  of  commercial 
clubs  and  business  exchanges,  and  for  the  purpose  of  constructing  sewers  and 
other  municipal  improvements  (sees.  930,  1084,  1085  as  amended  by  Laws  of 
1903,  chap.  9). 

No  corporation  shall  be  created  or  licensed  in  this  State  for  the  purpose  of 
buying,  acquiring,  trading,  or  dealing  in  real  estate  other  than  real  estate  located 
in  incorporated  cities  and  towns  and  as  additions  thereto;  nor  shall  any  cor- 
poration doing  business  in  this  State  buy,  acquire,  trade,  or  deal  in  real  estate 
for  any  purpose  except  such  as  may  be  located  in  such  towns  and  cities  and  as 
additions  to  such  towns  and  cities,  and  further  except  as  shall  be  necessary  and 
proper  for  carrying  on  the  business  for  which  it  was  chartered  or  licensed,  nor 
shall  any  corporation  be  created  or  licensed  to  do  business  in  this  State  for  the 
purpose  of  acting  as  agent  in  buying  and  selling  land;  provided,  however, 
that  corporations  shall  not  be  precluded  from  taking  mortgages  on  real  estate 
to  secure  loans  or  debts,  or  from  acquiring  title  thereto  upon  the  foreclosure 
of  such  mortgages  or  in  the  collection  of  debts,  conditioned  that  such  corpora- 
tion or  corporations  shall  not  hold  such  real  estate  for  a  longer  period  than 
seven  years  after  acquiring  such  title;  and  provided  further,  that  this  section 
shall  not  apply  to  trust  companies  taking  only  the  naked  title  to  real  estate  in 
this  State  as  a  trustee,  to  be  held  solely  as  security  for  indebtedness  pursuant 
to  such  trust;  and  provided,  further,  that  no  public  service  corporation  shall 
hold  any  land,  or  the  title  thereof  in  any  way  whatever  in  this  State,  except 
as  the  same  shall  be  necessary  for. the  transaction  and  operation  of  its  business 
as  such  public  service  corporation  (Cons.,  Art.  XXII,  sec.  2). 

2.  Incorporators.  —  Not  less  than  three,  one-third  of  whom  must  be  resi- 
dents of  the  State  (sec.  946  as  amended  by  Laws  of  1903,  chap.  9). 

3.  Contents  of  the  Articles  of  Incorporation.  — The  articles  must  set 
forth: 

a.  Name.  —  The  Secretary  of  State  will  not  permit  two  domestic  corpora- 
tions of  the  same  name. 

b.  Purposes.  —  Purposes  for  which  it  is  formed.  State  officials  allow  articles 
to  pass  allowing  incorporation  for  different  lines  of  industrial  business,  so  long 

492 


DIGEST    OF    INCORPORATION    ACTS.  —  OKLAHOMA. 

as  they  do  not  conflict  with  any  special  statute  in  regard  to  the  organization 
of  corporations. 

c.  Domicile.  —  The  place  where  the  principal  business  is  to  be  transacted. 
Any  corporation  formed  for  the  purposes  mentioned  in  the  act,  may  provide 

in  the  articles  of  incorporation  for  having  a  business  office  without  this  State, 
at  any  place  within  the  United  States,  and  to  hold  any  meeting  of  the  stock- 
holders or  directors  of  the  corporation  at  such  office  so  provided  for;  but  every 
such  corporation  having  a  business  office  out  of  this  State  must  have  its  main 
office  for  the  transaction  of  business  within  the  State,  to  be  also  designated  in 
such  articles  (sec.  1090). 

d.  Duration.  —  The  term  of  existence  of  corporations  formed  for  manufac- 
turing and  other  industrial  pursuits  is  limited  to  twenty  years. 

e.  Directors.  —  Number  of  directors  and  names  and  residences  of  those  who 
are  to  serve  until  formal  election  of  the  first  board  of  directors.  The  qualifi- 
cations of  the  directors  must  also  be  set  forth. 

/.  Capital  Stock.  —  The  amount  and  number  of  shares  into  which  it  is 
divided.  Both  the  capital  and  the  par  value  of  shares  may  be  any  amount 
(sec.  943;  see  also  for  additional  provisions  in  the  case  of  irrigation,  flume,  and 
tunnel  companies,  sees.  1092,  1096,  1097,  1098). 

4.  Statutory  Powers.  —  In  addition  to  the  enumeration  of  common  law 
powers,  the  statute  confers  the  following  additional  powers :  To  purchase  its 
own  shares;  to  vote  by  proxy;  to  have  a  business  office  without  the  State 
at  any  place  within  the  United  States,  and  to  hold  any  meeting  of  the  stock- 
holders or  directors  of  the  corporation  at  said  office ;  to  forfeit  stock  for  non- 
payment of  assessments;  to  remove  directors;  to  provide  penalties  to  the 
amount  of  $100  for  violation  of  by-laws  (sees.  959,  961,  973,  999-1004,  1090). 
The  power  to  adopt  by-laws  may  be  delegated  to  the  board  of  directors  by  a 
two-thirds  vote  of  the  stockholders  (sec.  964). 

All  corporations  formed  under  the  laws  of  this  State  shall  be  bodies  corporate 
for  the  period  for  which  they  are  organized  and  chartered,  unless  such  license 
or  charter  be  altered  or  amended  as  provided  bylaw,  or  unless  the  same  be 
forfeited  or  revoked  prior  to  the  expiration  thereof;  may  sue  and  be  sued;  may 
have  a  common  seal  with  which  they  may  alter  or  renew  at  pleasure;  may 
own,  possess  and  enjoy  so  much  real  estate  as  shall  be  necessary  and  proper  for 
carrying  on  the  business  for  which  each  of  such,  respectively,  is  licensed  or 
chartered,  and  may  sell  and  dispose  of  the  same  when  not  required  for  the  use 
of  the  corporation.  Provided,  that  no  corporation  shall  be  created,  licensed,  or 
chartered  in  this  State  for  the  purpose  of  acquiring,  buying,  selling,  trading, 
or  dealing  in  real  estate  other  than  real  estate  located  in  incorporated  cities  and 
towns,  and  as  additions  to  such  cities  and  towns;  nor  shall  any  corporation 
doing  business  in  this  State,  acquire,  buy,  sell,  trade,  or  deal  in  real  estate  for 
any  purpose,  except  such  lands  as  may  be  located  in  incorporated  cities  and 
towns  and  as  additions  thereto,  and  except  such  as  shall  be  necessary  and 
proper  for  carrying  on  the  business  for  which  such  corporation  was  licensed  or 
chartered;  nor  shall  any  corporation  be  created,  licensed,  or  chartered  to  do 
business  in  this  State  for  the  purpose  of  acting  as  agenl  in  buying  or  selling 
real  estate  except  as  herein  provided;  provided,  however,  that  corporations 
shall  not  be  precluded  from  taking  mortgages  on  real  estate  to  secure  loans  or 
debts,  or  from  acquiring  title  thereto  upon  foreclosure  of  such  mortgages  or 
in  the  collection  of  debts,  conditioned  that  such  corporation  or  corporations 
shall  not  hold  any  real  estate  so  acquired  for  a  longer  period  than  seven  years 

493 


DIGEST    OF    INCORPORATION    ACTS.  —  OKLAHOMA. 

and  conditioned  that  disposition  or  incumbrance  of  such  land  shall  in  no 
way  be  made  to  another  corporation  or  corporations;  Provided,  however, 
that  this  section  shall  not  apply  to  trust  companies  taking  only  the  naked 
title  to  real  estate  in  this  State,  as  trustee,  to  be  held  solely  as  security  for 
indebtedness  pursuant  to  such  trust  (Act  of  May  26,  1908,  sec.  1 ;  Laws  of 

1908,  p.  196). 

No  corporation  chartered  or  licensed  to  do  business  in  this  State  shall  own, 
hold,  or  control  in  any  manner  whatever,  the  stock  of  any  competitive  corpora- 
tion or  corporations  engaged  in  the  same  kind  of  business,  in  or  out  of  the 
State,  except  such  stock  as  may  be  pledged  in  good  faith  to  secure  bona  fide 
indebtedness  acquired  upon  foreclosure,  execution  sale,  or  otherwise  for  the 
satisfaction  of  debt.  In  all  cases  where  any  corporation  acquires  stock  in  any 
other  corporation,  as  herein  provided,  it  shall  be  required  to  dispose  of  the 
same  within  twelve  months  from  the  date  of  acquisition;  and  during  the  period 
of  its  ownership  of  such  stock  it  shall  have  no  right  to  participate  in  the  control 
of  such  corporation,  except  when  permitted  by  order  of  the  corporation  com- 
mission. No  trust  company  or  bank  or  banking  company  shall  own,  hold,  or 
control  in  any  manner  whatever,  the  stock  of  any  other  trust  company,  or  bank 
or  banking  company,  except  such  stock  as  may  be  pledged  in  good  faith  to 
secure  bona  fide  indebtedness  acquired  upon  foreclosure,  execution  sale,  or 
otherwise  for  the  satisfaction  of  debt;  and  such  stock  shall  be  disposed  of  in 
the  time  and  manner  hereinbefore  provided  (Const.,  Art.  IX.  sec.  41). 

5.  Procuring  the  Charter.  —  The  articles  must  be  subscribed  by  each  of 
the  incorporators  and  acknowledged  before  some  officer  authorized  to  take 
acknowledgments  of  conveyances  of  real  property  (sec.  946).  The  articles 
must  then  be  filed  and  recorded  with  the  Secretary  of  State  (sec.  948).  Col- 
lateral inquiry  into  the  legality  of  corporate  existence  is  forbidden  (sees.  933, 
947,  949). 

6.  Corporate  Indebtedness.  —  The  corporate  indebtedness  is  limited  to 
the  amount  of  subscribed  capital  stock  (sec.  970). 

Rodgers  v.  Bonnett,  2  Okla.  553;    37  Pac.  1078. 

7.  Organization  Tax.  —  The  organization  tax  is  one-tenth  of  one  per  cent 
upon  the  whole  authorized  capital  stock.  The  minimum  tax  is  $3  (Laws  of 
1908,  p.  194). 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State  for  recording 
articles,  25  cents  per  folio  of  one  hundred  words;  for  affixing  certificate  to  copy 
of  articles,  $1 ;  for  making  copy  of  articles,  10  cents  per  folio  (Laws  of  1908, 
p.  194). 

9.  Commencing  Business.  —  The  company  must  be  organized  and  busi- 
ness must  be  commenced  within  one  year  from  the  date  of  the  issuance  of  the 
certificate  of  incorporation  (sec.  981).  Mining,  manufacturing,  and  industrial 
corporations  must  commence  the  construction  of  their  works  within  ninety  days 
from  the  date  of  issuance  of  certificate  of  incorporation  and  must  complete  the 
same  within  two  years  (sees.  1099,  1100).  The  company  must  be  organized  — 
to  the  extent  of  the  adoption  of  by-laws  at  least  —  within  thirty  days  after  the 
filing  of  articles  of  incorporation  (sees.  962,  964). 

Before  commencing  business  all  corporations  must  first  file  in  the  office  of 
the  Corporation  Commission  a  fist  of  its  stockholders,  officers,  and  directors  with 
the  residence  and  post-office  of,  and  the  amount  of  stock  held  by  each  (Const., 
Art.  IX.  sec.  43). 

494: 


DIGEST    OF   INCORPORATION   ACTS. — OKLAHOMA. 

10.  Organization  Meeting.  —  The  organization  meeting  may  be  held  with- 
out the  State  if  the  charter  so  provides  (sec.  1090).  By-laws  must  be  adopted 
within  thirty  days  after  filing  articles  of  incorporation.  The  by-laws  must  be 
adopted  by  a  majority  vote  of  the  subscribed  capital  stock  at  a  meeting  called  on 
two  weeks'  notice  in  a  newspaper  published  in  the  comity  where  the  principal 
place  of  business  is  located.  The  first  meeting  may,  however,  be  dispensed  with 
and  by-laws  be  adopted  by  written  assent  or  two-thirds  vote  of  the  stockholders 
(sec.  962).  The  by-laws  must  be  certified  to  by  a  majority  of  the  directors  and 
the  secretary  and  be  kept  in  a  book  of  by-laws  (sec.  964).  The  corporation 
must  be  organized  antl  commence  business  within  one  year  from  date  of  incor- 
poration (sec.  9S1;    see  also  sees.  1099,  1100). 

11.  Meetings  of  Stockholders  and  Directors.  —  If  the  charter  so  pro- 
vides, both  the  stockholders'  and  directors'  meetings  may  be  held  without  the 
State.  Otherwise  the  stockholders'  meetings  must  be  held  within  the  State 
and  the  directors'  meetings  wherever  the  by-laws  provide  (sees.  968,  973,  974, 
976,  1090). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  at  least  three  directors  and  not  more  than  eleven,  all  of  whom  must 
be  stockholders  to  an  amount  prescribed  in  the  by-laws  (sec.  968).  The  power 
to  adopt  by-laws  may  be  delegated,  by  a  two-thirds  vote  of  the  stockholders, 
to  the  directors  (sec.  964) . 

b.  Liabilities.  —  Directors  are  liable  for  illegally  increasing  or  reducing  the 
stock  of  the  corporation,  for  declaring  illegal  dividends ;  also  for  making  false 
reports,  for  creating  debts  beyond  the  amount  of  subscribed  capital  stock,  and 
for  making  loans  to  stockholders  (sees.  970,  978).  Penal  provisions  are  also 
in  force,  punishing  frauds  on  the  part  of  boards  of  directors  and  officers  of  a 
corporation.  Directors  are  deemed  to  have  knowledge  of  acts  of  the  board, 
and  any  director  will  be  held  liable  therefor  unless  he  causes  his  dissent  to  be 
entered  in  the  corporate  records  provided  he  remains  a  director  for  six  months 
thereafter  (sees.  971,  1091,  2542-2544,  2553-2555,  2559-2563). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  debts  of  the 
company  to  the  extent  of  their  unpaid  stock  subscriptions.  Also  for  debts 
due  mechanics,  workmen,  and  laborers  employed  by  the  corporation  (sees.  975, 
1087). 

Chicago  Bldg.  &  Mfg.  Co.  v.  Lyon,  10  Okla.  704;    64  Pac.  6. 

14.  Stock  Certificates.  —  Stock  certificates  must  be  signed  by  the  presi- 
dent and  secretary  (sec.  957). 

15.  Preferred  Stock.  —  The  act  makes-  no  special  provision  for  the  issu- 
ance of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Corporations  can  issue  stock  for  money, 
labor  done,  or  money  or  property  actually  received.  The  act  expressly  pro-' 
vides  that  all  stock  certificates  issued  in  excess  of  the  capital  stock  shall  be 
void  (Const.,  Art.  IX.  sec.  39;    sec  also  Stat.,  sec.  958). 

1 7.  Books.  —  Stock  transfer  books  and  a  journal  of  the  meetings  of  directors 
and  stockholders  must  be  kept  open  for  inspection  of  stockholders,  but  the 
place  where  such  book  is  to  be  kept  is  n«>t  specified  by  statute  (sees.  979,  1086; 
see  also  Cons.,  Art.  II.  sec.  28;   Laws  of  190S,  p.  2'.YA). 

18.  Office.  — The  act  requires  every  corporation  to  have  its  main  office  for 
the  transaction  of  its  business  within  tin-  Si     "  (sees.  45,  161). 

19.  Reports.  —  Corporations  for  ruin         'Manufacturing,  and  other  indufl- 

495 


DIGEST   OF   INCORPORATION   ACTS.  —  OKLAHOMA. 

trial  pursuits  must  annually,  within  twenty  days  from  the  1st  day  of  January, 
make  a  report  which  must  be  published  in  some  newspaper  published  at  the 
place  where  the  principal  business  of  the  corporation  is  carried  on,  stating  the 
capital  stock,  and  the  amount  thereof  actually  paid  in,  the  amount  and  rating 
of  its  indebtedness,  and  the  amount  due  the  corporation,  the  number  and 
amount  of  dividends  and  when  paid,  and  the  net  amount  of  profits.  This 
report  must  be  signed  by  the  president  and  a  majority  of  the  directors,  and 
verified  by  the  president  or  secretary,  and  filed  in  the  office  of  the  register  of 
deeds  of  the  county  where  the  corporate  business  is  carried  on  (sec.  1088;  see 
also  sec.  1089). 

20.  Anti-Trust  Statute.  —  Certain  classes  of  trusts  and  combinations  are 
prohibited  (Cons.,  Art.  II.  sec.  32;  Art.  V.  sec.  44;  Art.  IX.  sec.  45;  Laws  of 
1908,  p.  750  etseq.). 

21.  Statutory  Ground  for  Forfeiture  of  Charter.  —  The  charter  may  be 
forfeited  for  failure  to  organize  and  commence  the  transaction  of  business  within 
one  year  from  filing  articles,  also  by  neglect,  abuse,  or  surrender  of  its  corporate 
rights  (sees.  981,  1099,  5357-5359). 

22.  Annual  Franchise  Tax.  —  There  is  no  annual  franchise  tax  in 
Oklahoma. 

23.  Amendments.  —  Articles  may  be  amended  in  any  particular,  except 
for  increasing  or  decreasing  the  capital  stock,  by  having  the  directors  and  officers 
of  the  company  execute  new  articles  to  be  known  as  "Amended  Articles  of 
Incorporation."  The  latter  must  set  forth  clearly  and  specifically  the  amend- 
ments desired.  The  articles  as  amended  must  be  filed  with  the  Secretary  of 
State  (sec.  945).  The  foregoing  section  undoubtedly,  contemplates  action  by 
fhe  stockholders  on  the  proposed  amendment  prior  to  the  execution  of  the 
certificate  of  amendment  by  the  directors  and  officers. 

To  increase  or  diminish  the  capital  stock  action  must  be  taken  at  a  meeting 
of  the  stockholders  called  for  that  purpose  by  the  directors  as  follows  :  (1)  Notice 
of  the  time  and  place  of  the  meeting,  stating  its  object  and  the  amount  to 
which  it  is  proposed  to  increase  or  diminish  its  capital  stock,  must  be  person- 
ally served  on  each  stockholder  resident  in  the  State,  at  his  place  of  business, 
if  known,  and  if  not  known,  at  the  place  where  the  principal  office  of  the  cor- 
poration is  situated,  and  be  published  iii  a  newspaper  published  in  the  county 
of  such  principal  place  of  business,  once  a  week  for  four  weeks  successively. 
(2)  The  capital  stock  must  in  no  case  be  diminished  to  an  amount  less  than 
the  indebtedness  of  the  corporation  or  the  estimated  cost  of  the  works  which 
it  may  be  the  purpose  of  the  corporation  to  construct.  (3)  At  least  two-thirds 
of  the  entire  capital  stock  must  be  represented  by  the  vote  in  favor  of  the 
increase  or  diminution  before  it  can  be  effected.  (4)  A  certificate  must  be 
signed  by  the  chairman  and  secretary  of  the  meeting  and  a  majority  of  the 
directors,  showing  compliance  with  the  requirements  of  this  section,  the  amount 
to  which  the  capital  stock  has  been  increased  or  diminished,  the  amount  of 
stock  represented  at  the  meeting,  and  the  vote  by  which  the  object  was  accom- 
plished. (5)  The  certificate  must  be  filed  in  the  office  of  the  Secretary  of  State, 
there  to  be  recorded  in  the  book  of  corporations,  and  thereupon  the  capital 
stock  shall  be  so  increased  or  diminished.  (6)  The  written  assent  of  the  holders 
of  three-fourths  of  the  subscribed  capital  stock  shall  be  as  effectual  to  authorize 
the  increase  or  diminution  of  the  capital  stock  as  if  a  meeting  were  called  and 
held,  and  upon  such  written  assent  the  directors  may  proceed  to  make  the  cer- 
tificate herein  provided  for  (sec.  978). 

496 


DIGEST   OF    INCORPORATION    ACTS.  —  OKLAHOMA. 

24.  Extension  of  Corporate  Existence.  —  Corporate  existence  may  be 
extended,  if  desired,  by  compliance  with  the  statute  (sec.   1223). 

25.  Dissolution.  —  Two-thirds  vote  of  the  stockholders  authorizes  petition 
for  dissolution  in  the  District  Court  (sec.  980). 

26.  Foreign  Corporations.  —  Foreign  corporations  must  file  in  the  office 
of  the  Secretary  of  State  an  authenticated  copy  of  their  charter,  and  appoint 
an  agent  to  receive  process.  This  agent  must  reside  in  the  county  where  the 
principal  business  of  the  corporation  is  to  be  carried  on.  An  authenticated 
copy  of  the  agent's  appointment  must  be  filed  in  the  office  of  the  Secretary  of 
State. 

Every  foreign  corporation  must,  before  being  licensed  to  do  business  in  the 
State,  file  in  the  office  of  the  corporation  commission  a  list  of  its  stockholders, 
officers,  and  directors,  with  the  residence  and  post-office  address  of  and  the 
amount  of  stock  held  by  each  (Const.,  Art.  IX.  sec.  43).  No  annual  license 
fees  are  imposed  upon  foreign  corporations  (see  generally  Laws  of  190S,  p.  214). 
To  obtain  a  license  foreign  corporations  must  pay  the  same  fee  as  is  required 
by  domestic  corporations  (see  sec.  8,  ante).  No  corporation  except  created 
solely  for  religious  or  charitable  purposes  shall  transact  business  within  this 
State  until  it  shall  have  filed  in  the  office  of  the  Secretary  of  State  a  certified 
copy  of  its  charter  or  articles  of  incorporation,  which  shall  be  recorded  in  a  book 
to  be  kept  by  the  Secretary  of  State  for  that  purpose,  and  shall  have  paid  the 
fees  required  by  law.  Every  foreign  corporation  shall,  before  it  shall  be  author- 
ized or  permitted  to  transact  business  in  this  State,  or  continue  business  there- 
in if  already  established,  by  its  certificate  under  the  hands  and  seal  of  the 
company  appoint  an  agent,  who  shall  be  a  citizen  of  the  State,  and  residing  at 
the  State  capital,  upon  whom  service  of  process  may  be  made  in  any  action  in 
which  said  corporation  be  a  party,  and  said  action  may  be  brought  in  any 
county  in  which  the  cause  of  action  arose  as  now  provided  by  law,  and  service 
upon  such  agent  shall  be  taken  and  held  as  due  service  upon  said  corporation. 
Such  certificate  shall  also  state  the  principal  place  of  business  of  such  corporation 
in  this  State,  with  the  address  of  the  resident  agent.  A  duly  authenticated 
copy  of  the  appointment  of  such  agent  shall  be  filed  and  recorded  in  the  office 
of  the  Secretary  of  State,  for  which  a  fee  therefor  of  $1  shall  be  paid  to  the  Sec- 
retary and  a  like  fee  of  $1  for  each  subsequent  appointment  of  any  agent  so 
filed  (Laws  of  1909,  chap.  X.  Art.  I.  sec.  1). 


32  497 


DIGEST    OF    INCORPORATION    ACTS.  —  OREGON. 


OREGON. 

(The  references  cited  below  are  to  Bellinger  &  Cotton's  Annotated  Code  and  Statutes 
(1902),  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  Oregon  is  to  be  found  in  sees.  5052-5073  of 
chap.  1,  Title  41,  Bellinger  &  Cotton's  Annotated  Code  of  the  Statutes  of  Oregon, 
as  amended  by  the  Laws  of  1903.  Under  this  act  corporations  may  be  formed 
for  any  lawful  business  enterprise. 

2.  Incorporators.  — Three  or  more  persons.  There  are  no  residential  re- 
quirements (sec.  5052). 

Rutherford  v.  Hill,  22  Ore.  218;  29  Pac.  546;  Miller  v.  Company,  3  Ore.  25;  Coyote,  etc. 
Co.  v.  Ruble,  8  Ore.  285. 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate  must 
set  forth : 

a.  Name.  —  Similarity  of  names  with  existing  corporations  is  expressly  for- 
bidden (Laws  of  1903,  p.  41). 

b.  Duration.  —  May  be  unlimited  if  desired. 

c.  Purposes.  —  Enterprise,  business,  pursuit,  or  occupation  in  which  the 
corporation  proposes  to  engage.  State  officials  permit  the  insertion  of  any 
number  of  purposes  in  the  articles. 

Maxwell  v.  Akin,  89  Fed.  180. 

d.  Domiciliary  Office.  —  Place  where  the  corporation  proposes  to  have  its 
principal  place  of  business  or  places  of  business. 

e.  Capital  Stock.  —  Amount  thereof,  which  is  unlimited. 

/.   Number  and  Par  Value  of  Shares.  —  These  may  be  any  amount. 

g.    If  the  corporation  is  formed  for  the  purpose  of  navigation,  constructing 
railroads,  roads,  canals,  or  bridges,  the  termini  of  such  navigation  road  or  of 
the  site  of  the  bridge  must  be  set  forth  (sec.  5055). 
Killingsworth  v.  Company,  18  Ore.  351 ;  23  Pac.  66. 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of  com- 
mon law  powers  the  corporation  has  the  following  additional  powers  :  To  accept 
donations  of  real  and  personal  property  from  cities,  municipalities,  and  persons ; 
to  forfeit  the  stock  of  its  members  for  non-payment  of  assessments ;  to  permit 
railroad  companies  to  consolidate ;  to  authorize  voting  by  proxy  (sees.  5056, 
5071) ;  to  sell  all  the  property  of  the  corporation  upon  the  consent  of  two-thirds 
of  the  stockholders  (Laws  of  1905,  chap.  194).  As  to  the  power  to  exercise  the 
right  of  eminent  domain,  see  Laws  of  1907,  chap.  147. 

O.  R.  &  N.  Co.  v.  O.  R.  Co.,  130  U.  S.  1;    9  Sup.  Ct.  409;  Holladay  v.  Elliott,  8  Ore.  85 

5.  Procuring  the  Charter.  —  The  articles  must  be  subscribed  and  acknowl- 
edged by  each  of  the  incorporators,  and  should  be  executed  in  triplicate.  One 
of  these  must  be  filed  in  the  office  of  the  Secretary  of  State,  another  with  the 
clerk  of  the  county  where  the  corporate  business  is  to  be  carried  on,  or  where 
the  principal  place  of  business  is  to  be  located,  and  a  third  should  be  retained 
in  the  possession  of  the  company  (sec.  5053).  Before  a  certificate  of  incorpora- 
tion will  be  issued,  not  only  must  the  organization  tax  be  paid,  but  the  propor- 

498 


DIGEST    OF    INCORPORATION    ACTS.  —  OREGON'. 

tionate  amount  of  the  annual  franchise  tax  for  the  first  year  as  well  (Laws  of 
1903,  p.  44).    The  Secretary  of  State  thereupon  issues  a  certificate  of  incorpora- 
tion (Laws  of  1903,  pp.  40,  41 ;   Laws  of  1905,  chap.  50). 
Wash.,  etc.  Asa'n  v.  Stanley,  38  Ore.  319;   63  Pac.  489. 

6.  Corporate  Indebtedness.  —  There  is  no  limit  upon  the  amount  of 
corporate  indebtedness. 

7.  Organization  Tax.  —  "Where  the  capital  stock  shall  not  exceed  $5,000, 
the  organization  tax  is  $10;  where  it  exceeds  $5,000  and  does  not  exceed 
$10,000,  $15 ;  where  it  exceeds  $10,000  and  does  not  exceed  $25,000,  $20 ;  where 
it  exceeds  $25,000  and  does  not  exceed  $50,000,  $25 ;  where  it  exceeds  $50,000 
and  does  not  exceed  $100,000,  $35 ;  where  it  exceeds  $100,000  and  does  not 
exceed  S250,000,  $45 ;  where  it  exceeds  S250,000  and  does  not  exceed  $500,000, 
$60 ;  where  it  exceeds  $500,000  and  does  not  exceed  $1,000,000,  $75.  Where  the 
capital  stock  shall  exceed  $1,000,000  a  fee  of  $75,  for  each  $1,000,000  or  fraction 
thereof  in  excess  of  $1,000,000  must  be  paid  (Laws  of  1907,  chap.  237). 

8.  Filing  and  Recording  Fees.  —  The  payment  of  the  organization  tax 
covers  the  filing  and  recording  fees  in  the  office  of  the  Secretary  of  State.  The 
charge  for  certified  copy  of  certificate  of  incorporation  is  25  cents  for  each  one 
hundred  words,  and  $2  for  affixing  certificate  thereto.  For  fifing  and  recording 
certificate  with  county  clerk  the  fee  is  $2.50  (Laws  of  1907,  chap.  237). 

9.  Commencing  Business.  —  As  soon  as  the  articles  are  filed  as  required 

by  law  and  one-half  of  the  capital  stock  has  been  subscribed  and  the  annual  tax 

for  the  succeeding  fraction  of  the  fiscal  year  has  been  paid,  the  corporation 

may  commence  the  transaction  of  business  (sees.  5053,  5057,  Laws  of  1907, 

chap.  237).     Directors  must  be  elected  and  business  commenced  within  one 

year  from  time  of  filing  articles  (sees.  5057,  5067;   Laws  of  1905,  chap.  50). 

C  G.  &  S.  M.  Co.  v.  Ruble,  8  Ore.  285;  Holladay  v.  Elliott,  8  Ore.  85;  Willamette 
Freighting  Co.  v.  Stanners,  4  Ore.  262;  McVicker  v.  Cone,  21  Ore.  353 ;  28  Pac.  76;  Nickum 
v.  Burckhardt,  30  Ore.  464;    47  Pac.  788;    48  Pac.  474. 

10.  Organization  Meeting. — The  organization  meeting  must  be  held 
within  the  State  in  the  absence  of  any  statute  providing  otherwise.  Provision 
is  made  for  the  calling  of  the  organization  meeting.  At  the  incorporators'  meet- 
ing the  incorporators  act  as  inspectors  of  election,  and  certify  that  they  will 
elect  directors,  and  appoint  time  and  place  for  their  first  meeting  (sec.  5058). 
Directors  cannot  be  elected  until  one-half  of  the  capital  stock  has  been  sub- 
scribed (sec.  5057). 

Nickurn  v.  Burckhardt,  30  Ore.  464;   47  Pac.  789;    48  Pac.  474. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meet- 
ings must  be  held  within  the  State.  The  provision  that  a  majority  of  the  directors 
shall  be  residents  of  the  State  practically  renders  it  necessary  to  hold  the  di- 
rectors' meetings  witlun  the  State  unless  the  expedient  is  resorted  to  of  delegat- 
ing the  powers  of  directors  to  an  executive  committee  composed  of  a  minority 
of  the  directors  (sec.  5062).  Under  a  recent  amendment  mining  corporations 
may  hold  meetings  of  its  directors  outside  of  the  State  of  Oregon  (Laws  of  1905, 
chap.  190). 

Doembecker  v.  Company,  21  Ore.  573;    28  Pac.  899. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications. — 
There  must  not  be  less  than  three  directors,  all  of  whom  must  be  stockholders, 
and,  except  in  the  case  of  corporations  of  the  character  mentioned  below,  ;t 
majority  of  the  board  must  be  residents  of  the  State  (sees.  5057,  5059).     A  ma- 

499 


DIGEST    OF    INCORPORATION    ACTS.  —  OREGON. 

jority  of  the  directors  of  any  corporation  incorporated  for  the  purpose  in  whole 
or  in  part  of  and  actually  engaged  as  its  principal  business  in  acquiring,  owning, 
or  working  mines,  or  acquiring  or  owning  or  operating  mills,  reduction  works, 
smelters,  or  power  plants  for  mining  purposes,  or  acquiring  or  constructing  or 
operating  steam  or  electric  railroads  as  a  common  carrier  may,  while  said  cor- 
poration is  so  engaged  in  the  business  aforesaid  as  its  principal  business  and  no 
longer,  reside  out  of  the  State  of  Oregon.  Any  such  corporations  may  also  have 
officers  and  directors  without  this  State  and  meetings  of  directors  may  be  held 
without  the  State;  but  at  least  one  director  of  every  such  corporation  shall 
reside  in  the  State,  and  every  such  corporation,  if  its  president  does  not  reside 
within  the  State,  must  at  all  times  maintain  within  the  State,  and  within  the 
county  where  its  principal  office  and  place  of  business  is  located,  an  agent  upon 
whom  service  of  summons  and  process  issued  to  or  against  such  corporation 
may  be  served  (Laws  of  1907,  chap.  146).  Each  director  must  subscribe  to  an 
oath  of  office  (sec.  5059).  Less  than  a  majority  may  constitute  a  quorum  if 
desired  (sec.  5062).  There  shall  be  an  annual  election  of  directors,  and  at  e?.ch 
election  after  the  first,  the  president  of  the  corporation  shall  act  as  inspector  of 
election  and  certify  who  are  elected  directors.  The  directors  chosen  shall  hold 
their  offices  for  one  year  thereafter  and  until  their  successors  are  elected  and  qual- 
ify, or  if  the  stockholders  shall  so  decide  they  may  be  elected  in  the  following 
manner:  Of  the  directors  first  chosen  as  nearly  one-third  of  the  whole  number  as 
may  shall  be  elected  for  the  term  of  one  year,  as  nearly  one-third  of  the  whole 
number  as  may  be,  for  the  term  of  two  years,  the  remainder  for  the  term  of 
three  years,  all  of  whom  shall  serve  for  such  terms  respectively  and  until  their 
•successors  are  elected  and  have  qualified.  Thereafter  as  the  terms  of  the  directors 
expire,  their  successors  shall  be  chosen  for  the  term  of  three  years  and  until 
their  successors  are  elected  and  qualify.  Any  vacancy  in  the  Board  of  Directors 
who  are  elected  for  a  term  of  more  than  one  year  shall  be  filled  by  election 
for  the  remainder  of  the  term.  The  powers  vested  in  the  directors  majr  be  exer- 
cised by  a  majority  of  them,  and  any  such  number  may  constitute  a  quorum 
at  all  regular  or  stated  meetings  authorized  by  the  by-laws  of  the  corporation 
in  all  cases  when  either  the  directors  or  incorporators  shall  have  filed  with  the 
Secretary  of  State  and  county  clerk  a  written  statement  designating  such  less 
number  sufficient  to  form  a  quorum  and  insurance  companies  formed  under 
this  law  may  designate  in  their  articles  of  incorporation  what  amount  of  per 
centum  of  the  capital  stock  shall  be  required  to  be  paid  in  before  commencing 
business,  and  the  stockholders  shall  be  liable  for  their  respective  stock  held  by 
them  respectively  when  the  business  or  liability  of  the  corporation  shall  require 
it  (Laws  of  Oregon,  1911,  chap.  160,  amending  sec.  6693). 
Silsby  v.  Strong,  38  Ore.  36;    62  Pac.  633. 

6.  Liabilities.  —  Directors  are  liable  for  the  illegal  declaration  of  dividends, 
and  for  the  unlawful  withdrawal  of  capital  (sec.  5066) . 

Patterson  v.  Thompson,  86  Fed.  85;  90  Fed.  647. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent  of 

their  unpaid  stock  subscriptions  (Cons.,  Art.  XL      Laws  of  1911,  p.  519). 

Lee  v.  Imbrie,  13  Ore.  510;  11  Pac.  270;  Brundage  v.  Companv,  12  Ore.  322;  7  Pac. 
314;  Hawkins  v.  Company,  38  Ore.  544;  64  Pac.  320;  Aldrich  v.  A.  C.  &  D.  Co.,  24  Ore. 
32;  32  Pac.  756;   Balfour  v.  Company,  27  Ore.  300;   41  Pac.  164. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
showing  the  number  of  shares  held  by  him,  signed  by  such  officers  as  the  by- 
laws may  prescribe. 

500 


DIGEST    OF    INCORPORATION    ACTS.  —  OREGON. 

15.  Preferred  Stock.  —  There  is  no  express  provision  authorizing  the 
issuance  of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  paid  for  in  money  or 
money's  worth. 

On  the  subject  of  payment  of  capital  stock  the  Supreme  Court,  of  Oregon 
has  recently  given  utterance  to  the  following  valuable  opinion: 

"The  appellant's  contention  is  that  the  corporation,  through  its  board  of 
directors,  exercised  its  best  judgment  as  to  values  of  properties  taken  over  in 
exchange  for  stock,  and  acted  in  good  faith  in  accepting  the  property,  includ- 
ing the  good- will  of  a  partnership  concern,  in  full  payment  of  the  capital  stock 
issued,  and  therefore  the  transaction  is  unimpeachable  at  the  suit  of  creditors; 
in  other  words,  the  stockholders  must  be  held  to  be  exonerated  from  all  liability 
to  the  corporation  for  the  benefit  of  the  creditors,  except  in  case  of  actual  fraud 
charged  against  the  corporation  and  stockholders,  and  affirmatively  proven. 

''The  directors  of  a  corporation,  in  the  absence  of  a  constitutional  or  statu- 
tory inhibition  to  the  contrary,  may  receive  property  in  payment  for  stock  in 
any  case  in  which  they  are  authorized  under  the  charter  to  purchase  for  the 
benefit  of  the  corporation,  and  to  subserve  the  purposes  for  which  it  is  organized. 

"  If  the  nature  of  the  property  [so  purchased]  and  the  extent  of  the  over- 
valuation thereof  [by  the  directors]  are  such  that  the  excess  valuation  may  have 
possibly  been  due  to  error  in  honest  conviction  or  judgment,  then,  to  render 
the  transaction  invalid,  actual  fraud  must  be  shown,  and  it  is  one  of  fact.  The 
real  question  in  cases  of  this  character  being  whether  the  property  was  placed 
and  taken  at  a  high  valuation  with  a  fraudulent  intent  of  evading  the  plain 
meaning  of  the  law.  It  is  competent  for  the  determination  of  this  question  to 
take  into  consideration  the  value  of  the  property,  the  purposes  for  which  it  is 
accepted,  and  all  the  conditions  and  circumstances  attending  and  surrounding 
the  transaction,  and  if,  from  the  whole,  it  appears  that  the  board  has  acted  in 
good  faith  in  the  honest  exercise  of  its  best  judgment,  no  adverse  presumption 
impeding,  then  are  its  acts  conclusive,  otherwise  not."  Macbeth  v.  Banfield 
(Ore.),  78  Pac.  G93. 

17.  Books.  —  The  stock  book  and  all  other  books  of  the  corporation,  neces- 
sary in  carrying  on  its  business,  must  be  kept  within  the  State  at  the  principal 
office  (sec.  50G3).    They  are  open  to  inspection  at  all  reasonable  hours. 

18.  Office  and  Agent.  —  Every  corporation  must  maintain  an  office  within 
the  State  at  all  times  (sec.  5055).  In  the  case  of  mining  and  those  corporations 
specially  authorized  to  have  a  majority  of  the  directors  non-residents  of  the 
State  (see  ante,  sec.  12),  the  law  provides  that  such  corporations  must  file  with 
their  annual  statement  a  power  of  attorney  appointing  a  person  therein  named 
a-  its  .Inly  authorized  agent  to  receive  service  of  process  upon  it.  This  power 
of  attorney  must  also  give  the  full  name  and  residence  of  the  agent  (Laws  of 
1907.  chap,  l  Mi). 

19.  Reports.  —  All  corporations  shall,  during  the  month  of  June  of  each 
year,  furnish  the  Secretary  of  State  with  a  statement  sworn  to  by  one  of  the 
officers,  setting  forth  the  name  of  the  corporation,  location  of  its  principal  office, 
names  of  its  president,  secretary,  and  treasurer,  and  their  post-office  addn 

date  of  annual  election  of  officers  and  directors,  amount  of  authorized  capital 
stock,  number  and  par  value  of  shares,  amount  of  capital  stock  subscribed) 
amount  issued  and  paid  up  (Act  of  Feb.   L6,  L903,  sec  .">).     In  the  case  of  mining 

and  other  corporations  specially  authorized  to  have  a  majority  of  their  board 
of  directors  non-residents  of  the  State  (see  ""/<  ,  sec.  12),  there  must  be  filed  with 

501 


DIGEST    OF    INCORPORATION    ACTS.  —  OREGON. 

the  annual  statement  a  power  of  attorney  appointing  a  person  therein  named 
as  duly  authorized  agent  of  the  corporation  for  service  of  process  upon  it.  This 
power  of  attorney  shall  state  the  agent's  full  name  and  residence  (Laws  of  1907, 
chap.  146).  Mining  corporations  must,  during  the  month  of  June  in  each  year, 
furnish  to  the  Secretary  of  State  a  report  setting  forth  certain  particulars  as  to 
their  business.  Mining  corporations  whose  annual  output  shall  not  exceed  the 
sum  of  $1,000,  shall,  upon  the  filing  of  such  report,  be  exempt  from  the  payment 
of  the  annual  license  fee  now  provided  by  law,  and  in  lieu  thereof  shall  pay  an 
annual  license  fee  of  $10.  They  can,  however,  avoid  the  making  of  such  report, 
if  they  shall  pay  the  annual  license  fee  required  of  other  domestic  corporations 
of  like  capitalization  (Laws  of  1905,  chap.  50;  Laws  of  1911,  pp.  40,  41). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  in  force  in 
Oregon. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited,  if  the  corporation  for  any  period  of  six  months  after  the  commence- 
ment of  business  neglects  or  ceases  to  carry  on  the  same.  They  may  also  be 
forfeited  for  abuse  or  misuser  of  corporate  powers,  or  for  failure  to  elect  directors 
and  commence  business  within  one  year  after  riling  articles  of  incorporation 
(sec.  5067).  The  right  to  transact  business  is  in  abeyance  while  the  annual 
franchise  tax  is  in  default  (Laws  of  1903,  p.  39  et  seq.).  The  charter  may  be 
forfeited  for  non-payment  of  license  fee  for  two  successive  years  (Laws  of  1905, 
chap.  172).  Charter  may  be  forfeited  for  violation  of  statute  law,  for  non- 
user  of  its  franchise,  for  doing  or  omitting  to  do  any  act  which  amounts  to  a 
surrender  of  its  franchise,  or  for  exercising  a  franchise  or  privilege  not  conferred 
upon  it  by  law  (sees.  366,  367). 

22.  Amendments.  —  Any  corporation  may,  at  any  meeting  of  the  stock- 
holders called  for  that  purpose,  by  a  vote  of  a  majority  of  the  stock,  increase 
or  diminish  its  capital  stock  or  the  amount  of  shares  thereof  (sec.  3235,  Hills' 
Annotated  Laws  of  Oregon).  The  stockholders  may,  by  a  majority  vote  of 
the  stock,  change  the  general  place  of  business  (sec.  5072). 

The  directors  of  any  corporation  may  file  supplemental  articles  of  incor- 
poration at  any  time  when  a  three-fourths  vote  of  all  the  stock  subscribed  shall 
so  determine,  for  the  purpose  of  engaging  in  any  business  cognate  or  germane 
to  the  original  objects  or  primary  purposes  of  said  corporation  not  in  violation 
of  law,  or  at  any  time  when  a  seven-eighths  vote  of  all  the  stock  subscribed 
shall  so  determine,  for  the  purpose  of  engaging  in  any  new  enterprise  or  pur- 
suit not  in  violation  of  law,  or  for  the  purpose  of  change  in  part  of  their  road  or 
canal  or  other  terminus,  or  both,  when  not  in  violation  of  law  or  any  contract 
entered  into  by  such  corporation ;  the  directors  shall  cause  a  notice  to  be  pub- 
lished of  the  filing  of  such  supplemental  articles  setting  forth  the  object  of  the 
same  (sec.  5073;  Laws  of  1905,  chap.  50). 

23.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for  the 
extension  of  corporate  existence. 

24.  Dissolution.  —  Corporations  may  be  dissolved  by  a  majority  vote  of 
the  stockholders  of  the  corporation  (sec.  5070;    Laws  of  1903,  p.  41). 

25.  Annual  License  Fee.  —  Every  corporation  organized  under  the  laws 
of  the  State  of  Oregon,  except  corporations  formed  or  organized  for  any  edu- 
cational, literary,  scientific,  religious,  or  charitable  purpose,  and  every  foreign 
corporation,  joint-stock  company,  or  association  now  doing  business  in  this 
State,  or  that  may  hereafter  do  business  within  this  State,  except  fire,  marine, 
fire  and  marine,  life,  accident,  life  and  accident,  plate  glass  and  steam  boiler 

502 


DIGEST    OF    INCORPORATION    ACTS.  —  OREGON. 

insurance  companies,  and  surety  companies,  shall  pay  an  annual  license  fee  in 
proportion  to  the  amount  of  its  authorized  capital  stock;  viz.:  Where  total 
authorized  capital  stock  is  not  in  excess  of  $5,000,  $10;  where  it  exceeds  $5,000 
and  does  not  exceed  $10,000,  $15;  where  it  exceeds  $10,000  and  does  not 
exceed  $25,000,  $20 ;  where  it  exceeds  S25,000  and  does  not  exceed  S50,000, 
$30;  where  it  exceeds  $50,000  and  does  not  exceed  $100,000,  $50;  where  it 
exceeds  $100,000  and  does  not  exceed  $250,000,  $70 ;  where  it  exceeds  $250,000 
and  does  not  exceed  $500,000,  $100;  where  it  exceeds  $500,000  and  does  not 
exceed  $1,000,000,  $125;  where  it  exceeds  $1,000,000  and  does  not  exceed 
$2,000,000,  $175;  where  it  exceeds  $2,000,000,  $200  (Laws  of  1903,  p.  43). 
The  tax  becomes  due  and  payable  August  15th  of  each  year. 

Every  corporation  formed  or  organized  under  and  pursuant  to  the  laws  of 
the  State  of  Oregon,  for  the  purpose  of  engaging  in  the  business  of  mining  for 
any  of  the  precious  metals,  and  whose  business  it  shall  be  to  engage  in  said 
business  only,  and  whose  annual  output  or  products  shall  not  exceed  in  value 
the  sum  of  $1,000,  shall  thereupon  be  exempt  from  the  payment  of  the  annual 
license  fee  above  set  forth,  but  in  lieu  thereof  shall  pay  an  annual  license  fee 
of  $10  (Laws  of  1907,  chap.  237;  see  also  Laws  of  1909,  chap.  40). 

26.  Foreign  Corporations.  —  A  foreign  corporation  must  file  with  the 
Secretary  of  State  a  declaration  of  its  purposes  to  engage  in  business  within 
the  State,  and  state  name  under  which  it  proposes  to  transact  business,  name 
of  State  under  whose  laws  it  is  organized,  location  of  its  home  office,  date  of 
its  incorporation,  amount  of  capital  stock,  nature  of  its  business,  location  of  its 
principal  office  within  the  State,  name  of  its  attorney  in  fact,  names  and  ad- 
dresses of  its  principal  officers  and  directors,  and  name  and  residence  of  prin- 
cipal agent  within  the  State ;  also  certified  copy  of  its  charter,  certified  to  by 
the  legal  keeper  of  the  original,  together  with  a  certificate  of  the  Secretary  of 
State  of  the  State  issuing  the  charter  as  to  whether  said  articles  of  incorporation 
are  genuine ;  and  must  pay  to  the  Secretary  of  State  $50  for  filing  and  record- 
ing the  same,  together  with  annual  license  fee  for  the  succeeding  fraction  of 
the  year.  The  amiual  license  tax  is  the  same  as  for  domestic  corporations. 
Must  also  file  annual  reports  same  as  domestic  corporations,  and  must  appoint 
an  attorney  within  the  State  upon  whom  process  may  be  served  (Act  of  February 
16,  1903,  sees.  6,  7).  The  attorney  so  appointed  must  be  a  citizen  of  the  United 
States,  and  a  citizen  and  resident  of  Oregon  (Laws  of  1903,  p.  47,  sec.  7.  See 
also  Laws  of  1911,  pp.  71-73). 

O.  &  W.  T.  J.  Co.  v.  Rathburn,  5  Saw.  32;  Commercial  Bank  v.  Sherman,  28  Ore.  573; 
43  Pac.  658;  Singer  Mfg.  Co.  v.  Graham,  8  Ore.  18;  Aldrich  v.  Anchor  Coal,  etc.  Co.,  24 
Ore.  32;    32  Pac.  756. 


503 


DIGEST    OF    INCORPORATION    ACTS.  —  PENNSYLVANIA. 


PENNSYLVANIA. 

(The  references  below  are  to  the  Legislative  Assembly  Laws  of  Pennsylvania  for  the  vari- 
ous years  mentioned,  and  are  referred  to  under  the  date  the  act  was  adopted,  together  with 
the  reference  to  pages  of  the  Pamphlet  Laws  of  that  particular  year.  The  latter  are  referred 
to  as  P.  L.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 

Much  of  the  hopeless  confusion  that  may  be  discovered  upon  a  cursory  examina- 
tion of  the  Business  Corporation  Laws  of  Pennsylvania  may  be  removed  by  the 
following  explanatory  statement:  On  April  7,  1849,  the  Legislature  of  Penn- 
sylvania passed  an  act  for  the  incorporation  of  manufacturing  companies.  This 
was  followed  in  1854  by  the  enactment  of  the  Mining  Company  Act,  providing 
for  the  incorporation  of  mechanical  and  mining  companies.  On  July  18,  1863, 
an  act  was  passed  providing  for  the  incorporation  of  quarrying,  manufacturing, 
and  mechanical  companies.  On  April  29,  1874,  a  general  act  was  passed  pro- 
viding for  the  organization  of  a  large  number  of  classes  of  corporations.  Under 
this  act  corporations  could  be  organized  for  any  specific  purpose  mentioned  in 
the  act.  It  was,  however,  limited  at  that  time  in  its  operation  and  did  not 
permit  of  incorporation  for  all  purposes.  The  act  was  later  amended  so  as  to 
permit  of  incorporation  for  any  one  kind  of  business  not  otherwise  provided 
for  (1901,  July  9,  P.  L.  624,  sec.  1).  Corporations  are  now  incorporated  under 
the  Act  of  April  29,  1874,  and  acts  amendatory  thereof.  The  various  statutes 
in  Pennsylvania  referring  to  the  earlier  Incorporation  Acts  of  1849,  1854,  and 
1863  are  binding  only  upon  corporations  previously  created  under  these  acts. 
The  Corporation  Act  of  July  9,  1901  (P.  L.  313),  provides  that  all  previous  acts 
inconsistent  therewith  shall  be  repealed  by  the  provisions  of  this  act  (see  Laws 
of  1909,  P.  L.  2887).  Special  acts  are  provided  for  banks,  trust  companies, 
railway,  canal,  navigation,  insurance,  building,  and  loan  companies,  and  elee- 
mosynary corporations  (1874,  April  29,  P.  L.  73;  1893,  June  10,  P.  L.  435;  1901, 
July  9,  P.  L.  624,  sec.  1;   1903,  April  23,  P.  L.  204;  April  26,  1911),  P.  L.  79. 

2.  Incorporators.  —  Three  or  more  persons,  one  of  whom  must  be  a  citizen 
of  Pennsylvania  (1901,  May  29,  P.  L.  326,  sec.  1 ;    1903,  April  23,  P.  L.  273). 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate  must 
set  forth : 

a.  Name.  —  Similarity  of  names  is  forbidden.  A  charter  will  be  refused 
where  the  proposed  name  is  already  in  use  by  another  domestic  corporation 
(1874,  April  29,  P.  L.  73,  sec.  3;  1903,  April  22,  P.  L.  251;  Laws  of  1909, 
P.  L.   215). 

American  Clay  Mfg.  Co.  v.  Company,  198  Pa.  189;  47  Atl.  936;  Nether  Providence  Ass'n, 
12  Pa.  C.  C.  666. 

b.  Purposes.  —  Purposes  for  which  corporation  is  formed.  Only  one  pur- 
pose may  be  inserted.  Certificates  for  incorporation  of  manufacturing  or 
mercantile  companies  must  describe  in  a  general  way  the  goods  to  be  manu- 
factured or  sold  (1874,  April  29,  P.  L.  73,  sec.  3;  1893,  June  10,  P.  L.  435. 
See  cases  in  Vol.  3  of  Pepper  &  Lewis'  Digest  of  Pennsylvania  Decisions,  pp. 
4769-4777,  4S01-480S). 

c.  Domicile.  —  Place  or  places  where  business  is  to  be  transacted  (1874, 
April  29,  P.  L.  73,  sec.  3). 

504 


DIGEST  OF  INCORPORATION  ACTS.  —  PENNSYLVANIA. 

d.  Duration.  —  Term  of  existence.  May  be  perpetual,  if  desired  (1874, 
April  29,  P.  L.  sees.  1,  3,  4). 

e.  Subscribers'  Names  and  Subscriptions.  —  Names  and  residences  of  sub- 
scribers and  number  of  shares  subscribed  for  by  each  (1874,  April  29,  P.  L.  73, 

sec.  3). 

/.  Directors.  — Number  of  directors  to  be  not  less  than  three;  also  names 
and  residences  of  those  for  the  first  year  (1S74.  April  29,  P.  L.  73,  sec.  :; ;  1901, 
April  19,  P.  L.  51).  Where  a  corporation  has  only  three  director-;,  it  lias  been 
held  that  the  treasurer  cannot  be  named  as  one  of  these  (Corporation  Officers, 
3  Pa.  Cir.  Ct.  188). 

g.  Capital  Stock.  —  Amount  thereof.  Number  and  par  value  of  shares. 
Capital  stock  may  be  any  amount.  Par  value  of  shares  must  not  exceed  S100 
(1S74,  April  29,  P.  L.  73,  sees.  3,  11,  39;  1899,  May  3,  P.  L.  120;  1901,  Feb.  9, 
P.  L.  1 ;  1901,  July  2,  P.  L.  302).  Par  value  of  shares  in  the  case  of  mining 
companies  may  be  SI  (1865,  March  27,  P.  L.  34,  sec.  8).  If  any  stork  is  issued 
for  property,  a  statement  of  the  amount  so  issued  must  be  inserted  (187G,  April 
17,  P.  L.  10,  sec.  4). 

h.  Preliminary  Payment  of  Stock  Subscriptions.  —  A  statement  that  ten  per 
cent  of  the  capital  stock  has  been  paid  in  in  cash  to  the  treasurer,  together 
with  his  name  and  residence  (1874,  April  29,  P.  L.  73,  sec.  2). 

Cook  v.  Marshall,  191  Pa.  315;  43  Atl.  314. 

4.  Statutory  Powers.  —  The  statute  enumerates  the  common  law  powers 
of  corporations  (1S74,  April  29,  P.  L.  73,  sec.  1).  The  following  additional 
powers  are  also  conferred:  To  consolidate  with  other  corporations  (1901,  May 
29,  P.  L.  349;  1905,  March  31,  P.  L.  95  (1909,  P.  L.  229).  To  purclu.se  and 
hold  stock  in  other  corporations  (1905,  March  31,  P.  L.  95;  1895,  June  26,  P.  I.. 
27S,  sec.  1 ;  1901,  July  2,  P.  L.  298;  1887,  June  17,  P.  L.  411,  sec.  3).  To  issue 
preferred  stock  (1874,  April  29,  P.  L.  73,  sees.  16,  39;  1S72.  April  3,  P.  L.  39, 
sec.  1 ;  1873,  April  28,  P.  L.  39,  sec.  1).  To  vote  by  proxy  (1874,  April  29,  P.  L. 
73,  sec.  6;  1820,  March  28,  7  Sm.  L.  320,  sec.  1;  1903,  March  5,  P.  L.  14).  To 
enforce  a  lien  for  corporate  debts  (1S74,  April  29,  P.  L.  73,  sec.  39.)  To  forfeit 
stock  for  non-payment  of  assessments  (1895,  June  26,  P.  L.  27S,  sec.  1).  To 
cumulate  votes  in  the  election  of  directors  and  to  classify  directors  (ls76,  April 
25,  P.  L.  47,  see.  1;  1887,  June  17,  P.  L.  411,  sees.  1.  2).  The  power  to  adopl 
by-laws  may  be  delegated  in  the  charter  to  the  board  of  directors  (189 1 .  May  14, 
P.  L.  61,  sec.  1.  See  generally  on  Corporate  Powers,  Constitution,  XVI.  sees.  6, 
7;  1874,  April  29,  P.  L.  73,  sees.  38,  39,  43;  1887.  May  24,  P.  I..  188,  sec.  1; 
1868,  March  31,  P.  L.  50,  sec.  1 ;  1893,  May  18,  P.  L.  81,  sec.  1 ;  1905,  March  31 , 
P.  L.  95).  (As  to  reorganization  of  corporations  see  I'.  L.  of  1911,  June  -'(). 
p.  192). 

5.  Procuring  the  Charter. — The  certificate  must  be  subscribed  and 
acknowledged  by  at  least  two  of  the  incorporators,  who  must  swear  thai  the 
statements  contained  in  the  certificate  are  true.  This  certificate  must  be  ac- 
knowledged before  a  recorder  of  the  county  in  which  the  corporation  is  to  be 
located,  or  before  any  notary  public  of  Pennsylvania.  Notice  of  intention  to 
apply  for  charter  must  be  published  in  Hie  legal  journal,  if  any  of  Hie  proper 
county  in  which  court  notices  usually  appear,  which  journal  for  such  publica- 
tion shall  be  deemed  a  newspaper  of  general  circulation,  provided  that  the 
rati-  charged  for  such  publication  shall  not  be  in  excess  of  the  usual  current 
rates  charged  by  such  newspapers.    This  notice  must  be  published  once  a  wet  k 

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DIGEST  OF  INCORPORATION  ACTS.  —  PENNSYLVANIA. 

for  three  weeks  and  must  state  the  character  and  object  of  the  proposed  cor- 
poration (Laws  of  1909,  P.  L.  215).  The  notice  of  intention  to  apply  for  charter 
should  give  the  names  of  at  least  three  incorporators,  designating  the  time 
when  application  will  be  made  to  the  Governor  for  the  charter,  the  Act  of  the 
Assembly  under  which  it  is  made,  and  the  purposes  proposed.  The  proof  of 
publication  of  the  notice  must  be  filed  in  the  office  of  the  Secretary  of  State 
upon  the  recording  of  the  certificate.  The  certificate  of  incorporation  should 
be  on  file  in  this  office  during  the  period  of  publication.  Re-advertisements 
will  be  required  for  applications  received  thirty  days  after  the  time  designated 
in  the  notice.  The  certificate  must  have  at  least  two  subscribers,  one  of  whom 
must  be  a  citizen  of  the  Commonwealth,  and  must  be  acknowledged  and  veri- 
fied by  at  least  two  subscribers.  The  object  of  the  corporation  should  be  re- 
stricted to  the  purposes  set  forth  definitely  in  the  incorporation  act,  and  so 
concisely  stated  as  to  be  void  of  diversity.  Special  care  should  be  taken  that 
only  the  purpose  is  stated  and  not  the  powers  which  come  to  the  corporation 
by  grant  of  law,  and  that  the  certificate  be  confined  to  the  statement  of  a  single 
purpose.  Certificates  for  the  incorporation  of  manufacturing  and  mercantile 
companies  should  describe  in  a  general  way  the  character  of  the  articles  to  be 
manufactured  and  sold.  The  certificate,  together  with  proof  of  publication, 
must  then  be  forwarded  to  the  Governor,  who,  if  he  approves  of  it,  endorses 
his  approval  thereon  and  directs  letters  patent  to  issue.  The  certificate  is  then 
recorded  in  the  office  of  the  Secretary  of  State,  registered  with  the  Auditor- 
General,  and  the  original  articles,  with  the  endorsement  mentioned,  must  then 
be  recorded  in  the  office  of  the  recorder  of  deeds  of  the  county  where  the  chief 
operations  of  the  company  are  to  be  carried  on  (1874,  April  29,  P.  L.  73,  sees.  3, 
4,  26,  45;  1891,  April  15,  P.  L.  18;  1874,  May  15,  P.  L.  107;  1901,  May  29, 
P.  L.  207 ;    1903,  April  23,  P.  L.  273). 

M.  B.  Co.  v.  Company,  196  Pa.  St.  25;  46  Atl.  99. 

6.  Corporate  Indebtedness.  —  Loans  to  an  amount  not  exceeding  one- 
half  the  capital  stock  may  be  made  on  real  estate  and  machinery,  or  on  real 
estate  alone.  Corporations  belonging  to  classes  designated  in  the  statute  as 
4,  5,  6,  7,  9,  11,  24,  may  borrow  money  to  an  amount  not  exceeding  double 
the  amount  of  capital  stock  paid  in.  Under  the  Laws  of  1905,  chap.  190,  all 
other  business  corporations  are  given  right  to  mortgage,  borrow,  and  pledge 
without  limit  as  to  amount  (Cons.,  Art.  XVI.  sec.  7 ;  1874,  April  29,  P.  L.  73, 
sees.  38,  39;  1874,  April  18,  P.  L.  61,  sec.  1;  1874,  May  15,  P.  L.  86,  sec.  1; 
1879,  May  13,  P.  L.  57,  sec.  1 ;  1881,  June  8,  P.  L.  69,  sec.  1 ;  1889,  May  21, 
P.  L.  257,  sec.  1 ;   1901,  Feb.  9,  P.  L.  1,  sec.  1). 

7.  Organization  Tax.  —  A  bonus  of  one-third  of  one  per  cent  upon  the 
authorized  capital  stock  must  be  paid  (1878,  May  22,  P.  L.  97,  sec.  1 ;  1897, 
June  15,  P.  L.  155;  1899,  May  3,  P.  L.  120;  1899,  May  7,  P.  L.  115,  sec.  1; 
1901,  Feb.  9,  P.  L.  1). 

8.  Filing  and  Recording  Fees.  —  Filing  fees  in  the  office  of  the  Secretary 
of  State,  $30 ;  for  making  copy  of  certificate,  25  cents  per  typewritten  page  and 
75  cents  for  certificate,  and  $1  for  affixing  great  seal  of  State.  Recording 
fees  in  local  county  office,  25  cents  per  folio ;  fee  upon  organization  for  filing 
statements,  $5;  cost  of  publishing  notice  of  application  for  letters  patent, 
usually  about  $9.  In  Philadelphia  the  cost  of  publishing  notice  is  usually 
about  $13. 

9.  Commencing  Business.  —  Before  the  corporation  can  commence  busi- 

506 


DIGEST    OF    INCORPORATION    ACTS.  —  PENNSYLVANIA. 

ness  ten  per  cent  of  the  authorized  capital  stock  must  have  been  paid  in  in  cash 
to  the  treasurer  of  the  intended  corporation.  The  corporation  cannot  com- 
mence business  without  first  filing  with  the  Auditor  of  the  Commonwealth  the 
name  of  the  corporation,  the  date  of  the  incorporation,  the  authority  under  which 
incorporated,  place  of  business,  post-office  address  and  names  of  the  president, 
secretary,  and  treasurer,  the  amount  of  capital  authorized  by  the  charter,  and 
amount  of  capital  paid  in  to  the  treasurer  of  the  company  (1S76,  April  17,  P.  L. 
30,  sec.  6;  1879,  June  7,  P.  L.  112,  sec.  1;  1889,  June  1,  P.  L.  420,  sec.  19). 
Business  must  be  commenced  within  two  years  after  incorporation  (1889,  May 
16,  P.  L.  241,  sec.  2 ;  1883,  June  13,  P.  L.  122,  sec.  5 ;  see  Corporation  Officers. 
3  Pa.  C.  C.  1SS;  Potter  Gas  Co.,  15  Pa.  C.  C.  347).  One-fourth  of  the  capital 
stock  must  be  paid  up  within  two  years  (1883,  June  13,  P.  L.  122,  sec.  5).  Work 
must  be  begun  in  two  years  and  finished  in  five  years  (18S9,  May  16,  P.  L.  241, 

sec.  2). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  Commonwealth,  unless  a  majority  of  the  incorporators  or  stock- 
holders are  citizens  of  another  State  (1891,  May  14,  P.  L.  61,  sec.  1).  When 
a  majority  of  the  directors,  corporators,  or  stockholders  thereof  are  citizens  of 
another  State,  the  corporation  may  be  organized  without  the  State,  if  desired 
{1865,  Nov.  27,  P.  L.  (1866)  1228,  sec.  1 ;  1874,  April  29,  P.  L.  73,  sec.  38;  1826, 
March  28,  7  Sm.  L.  320,  sees.  1,  2). 

11.  Meetings  of  Stockholders  and  Directors.  —  The  annual  meetings 
for  the  election  of  officers  must  be  held  in  the  State  of  Pennsylvania.  Special 
stockholders'  meetings  and  meetings  of  the  board  of  directors  may  be  held 
without  the  State,  if  a  majority  of  the  stockholders  and  a  majority  of  the  direc- 
tors are  respectively  citizens  of  another  State  (1865,  Nov.  27,  P.  L.  (1866)  1228, 
sec.  1).  Iron  and  steel  corporations  may  hold  all  meetings  without  the  State,  if 
desired  (1820,  March  28,  7  Sm.  L.  320,  sees.  1,  2 ;  1874,  April  29,  P.  L.  73,  sec.  38 ; 
1893,  June  8,  P.  L.  351). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  at  least  three  directors,  one  of  whom  must  be  a  resident  of  the 
State.  Directors  need  not  be  stockholders  (Corporate  Directors,  7  Pa.  C.  C.  178). 
If  the  by-laws  so  provide,  the  number  of  directors  may  be  changed  from  time 
to  time  by  the  directors  without  a  vote  of  the  stockholders  and  without  amend- 
ing the  certificate  of  incorporation.  Directors  may  be  classified,  if  desired.  If 
the  certificate  so  provides,  directors  may  adopt  by-laws  (1891,  May  14,  P.  L.  61, 
sec.  1).  The  right  of  stockholders  to  cumulate  their  votes  in  the  election  of 
directors  is  a  constitutional  right  (1874,  April  29,  P.  L.  74,  sec.  38;  1876,  April 
25,  P.  L.  47;  1877,  June  17,  P.  L.  411,  sees.  1,  2;  1887,  May  31,  P.  L.  281,  sec. 
1 ;'  1887,  June  17,  P.  L.  411 ;   1901,  April  19,  P.  L.  80,  sec.  1). 

Commonwealth  v.  Stevenson,  200  Pa.  St.  509;  50  Atl.  91. 

b.  Liabilities.  —  Directors  are  liable  for  the  declaration  of  illegal  dividends 
and  for  the  illegal  withdrawal  of  capital  stock.  They  are  also  liable  to  creditors 
and  stockholders  for  moneys  embezzled  by  officers  (1874,  April  29,  P.  L.  73,  sec. 
39 ;  1878,  June  12,  P.  L.  196,  sec.  1).  Directors  absent  or  objecting  to  any  such 
action  may  exempt  themselves  from  liability  by  filing  objection  in  writing  with 
the  clerk  of  the  company  (1874,  April  29,  P.  L.  73,  sec.  39).  Directors  of  all 
corporations  organized  under  the  Act  of  July  18,  1863  (P.  L.  1102,  sec.  1),  are 
liable:  First,  for  property  used  for  other  purposes  than  that  stated  in  the  charter 
(1S63,  July  18,  P.  L.  1102,  sec.  2);   second,  for  neglect  of  duties  relative  to  filing 

507 


DIGEST    OF    INCORPORATION    ACTS.  —  PENNSYLVANIA. 

certificates  of  amendments  to  increase  and  reduce  capital  stock  (1863,  July  18, 
P.  L.  1102,  sees.  21-22);  third,  for  loans  to  stockholders  (1863,  July  18,  P.  L. 
1102,  sec.  25);  fourth,  for  permitting  the  corporation  to  contract  debts  in 
excess  of  the  capital  stock  paid  in  (1863,  July  18,  P.  L.  1102,  sec.  26).  Probably 
this  last  provision  is  repealed  by  Laws  of  1905,  chap.  190.  Directors  are  also 
liable  for  making  false  certificates  (1863,  July  18,  P.  L.  1102,  sees.  27,  34). 
Strunk  v.  Owen,  199  Pa.  St.  73;  48  Atl.  888. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent  of 

their  unpaid  stock  subscriptions.     They  are  also  liable  for  debts  to  laborers, 

clerks,  and  operatives  for  services  rendered  within  six  months  after  demand 

made  and  neglect  or  refusal  on  the  part  of  the  corporation  to  make  payment. 

This  liability  extends  to  the  amount  of  stock  held  by  each  stockholder.    They 

are  also  jointly  and  severally  liable  for  all  debts  contracted  by  them  for  work 

or  labor  done  or  materials  furnished  for  opening,  improving,  and  preparing 

their  lands  for  mining  purposes.    They  are  also  liable  for  the  illegal  withdrawal 

of  capital  (Cons.,  XVI.  sec.  7;   1854,  April  21,  P.  L.  437,  sec.  5;   1874,  April  29, 

P.  L.  73,  sees.  15,  24,  38,  39;    1876,  April  17,  P.  L.  32,  sec.  3;    1863,  July  18, 

P.  L.  1102,  sees.  39,  47). 

Adv.  Ben.  Order  v.  Company,  195  Pa.  St.  602;  46  Atl.  102;  Bates  v.  Day,  198  Pa.  St. 
513;    48  Atl.  407;    McNeal  Pipe,  etc.  Co.  v.  Bullock,  174  Pa.  St.  93;    34  Atl.  594. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
signed  by  the  president  or  vice-president  and  countersigned  by  the  treasurer, 
and  sealed  with  the  seal  of  the  corporation  (1874,  April  29,  P.  L.  73,  sec.  7 ;  1895, 
June  24,  P.  L.  258). 

15.  Preferred  Stock.  —  Preferred  stock  may  be  issued,  if  authorized  in  the 
certificate  of  incorporation,  or  with  the  consent  of  a  majority  in  interest  of  the 
stockholders  after  incorporation.  It  may  be  divided  into  classes,  if  desired. 
The  amount  of  preferred  stock  cannot  at  any  time  exceed  one-half  of  the  au- 
thorized capital  stock.  The  amount  of  dividends  thereon  is  limited  to  twelve 
per  cent.  The  holders  of  preferred  stock  are  not  liable  for  debts  of  the  corpora- 
tion (1872,  April  3,  P.  L.  37,  sec.  1 ;  1873,  April  28,  P.  L.  79.  sec.  1 ;  1874,  April 
29,  P.  L.  73,  sees.  16,  39 ;    1876,  April  17,  P.  L.  30,  sec.  4). 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  in  exchange  for 
money,  labor  done,  or  property  actually  received.  Stock  may  be  issued  for  real 
and  personal  estate,  mineral  rights,  patent  rights,  and  other  property  necessary 
for  the  purposes  of  organization.  The  stock  so  issued  shall  be  declared  and 
taken  to  be  full  paid  stock  and  not  liable  to  any  further  calls  or  assessments. 
One-quarter  of  the  capital  stock  must  be  paid  up  within  two  years.  No  note 
of  a  stockholder  can  be  accepted  in  payment  of  stock.  The  president  and 
directors,  with  the  treasurer  and  clerk,  must,  in  the  case  of  manufacturing  com- 
panies, before  the  payment  of  the  last  instalment  of  the  capital  stock,  make  a 
certificate  stating  the  amount  of  the  capital  so  fixed  and  paid  in,  which  certifi- 
cate must  be  signed  and  sworn  to  by  the  officers  last  mentioned,  and  must  be 
recorded  in  the  office  of  the  recorder  of  deeds  for  the  county  wherein  the  corpo- 
ration has  its  principal  place  of  business.  (See  Cons.,  XVI.  sec.  7;  1874,  April 
29,  P.  L.  73,  sec.  39 ;  1876,  April  17,  P.  L.  30,  sec.  4 ;  1895,  June  26,  P.  L.  369, 
sec.  1 ;  1905,  March  24,  P.  L.  39.) 

17.  Books.  —  Directors  of  manufacturing,  mechanical,  mining,  quarrying, 
and  other  business,  provided  in  sec.  18  of  the  enumeration  of  the  classes  of  busi- 
ness corporations,  are  required  to  keep  a  stock  book  or  stock  register,  which 

508 


DIGEST    OF    INCORPORATION    ACTS.  —  PENNSYLVANIA. 

must  be  opened  for  inspection  during  business  hours  to  all  persons  (1S49,  April 
7,  P.  L.  563,  sec.  24 ;  1891,  May  14,  P.  L.  61,  sec.  1 ;  1893,  May  26,  P.  L.  141, 
sees.  1,  2 ;  June  8,  P.  L.  355,  sec.  1 ;    1849,  April  7,  P.  L.  563,  sec.  24). 

Commonwealth  v.  Phoenix  Iron  Co.,  105  Pa.  111. 

IS.  Office  and  Agent.  —  Aside  from  all  iron  and  steel  manufacturing  com- 
panies, the  principal  office  of  all  business  corporations  must  be  located  in  the 
State,  and  the  place  where  the  business  is  to  be  transacted  must  be  designated 
in  the  certificate.  In  the  case  of  iron  and  steel  companies,  the  latter  may  have 
an  office  without  the  State,  if  the  by-laws  so  authorize,  where  meetings  of  stock- 
holders and  directors  may  be  held  (1874,  April  29,  P.  L.  73,  sees.  3,  38). 

19.  Reports.  —  Every  corporation  shall  make  an  annual  report  to  the 
Auditor-General  in  the  month  of  November  of  the  condition  of  the  corporation. 
This  report  must  state :  (1)  Total  authorized  capital  stock;  (2)  total  author- 
ized number  of  shares;  (3)  number  of  shares  issued;  (4)  par  value  of  each 
share ;  (5)  amount  paid  on  each  share ;  (6)  amount  of  capital  stock  paid  in ; 
(7)  amount  of  capital  stock  on  which  dividends  have  been  declared ;  (8)  date 
of  each  dividend  during  the  year  ending  the  1st  Monday  in  November; 
(9)  rate  per  cent  of  each  dividend ;  (10)  amount  of  dividend  during  the 
year  ending  1st  Monday  of  last  month;  (11)  gross  earnings  during  the  year; 
(12)  net  earnings  during  said  year;  (13)  amount  of  surplus;  (14)  amount 
of  profits  added  to  sinking  fund  during  said  year;  (15)  highest  price  on  sales 
of  stock  between  November  1st  and  15th;  (16)  highest  price  on  sales  of  stock 
during  the  year  (1901,  May  8,  P.  L.  150).  Two  officers  of  the  company  are  re- 
quired to  appraise  the  stock  between  November  1st  and  15th,  and  one  of  these 
must  verify  the  report  (1905,  April  14,  P.  L.  166  ;  1905,  April  17,  P.  L.  186). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute.  (See  Nester  v. 
Company,  161  Pa.  St.  473 ;  29  Atl.  102.)  Combinations  of  telegraph,  railroad, 
or  canal  companies  running  parallel  or  competing  lines  and  discrimination  in 
rates  are  prohibited  (Cons.,  Art.  XVI.  sec.  12;  Art.  XXIII.  sees.  4,  7,  8;  see 
also  Morris  R.  C.  Co.  v.  Company,  68  Pa.  St.  173). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charter  maybe 
forfeited  for  failure  to  organize  within  two  years  after  the  issuance  of  charter. 
It  may  also  be  forfeited  for  misuser  or  non-user,  or  by  the  commission  of  any 
act  whereby  forfeiture  thereof  shall  by  law  be  created.  Neglect  to  pay  the 
bonus  tax  renders  the  charter  liable  to  forfeiture  (1836,  June  14,  P.  L.  621, 
sec.  2;  1883,  June  13,  P.  L.  123,  sec.  5;  1901,  May  21,  P.  L.  176;  1870,  April  I, 
P.  L.  45,  sec.  1 ;  1872,  April  4,  P.  L.  46,  sec.  1 ;  1883,  June  13,  P.  L.  122,  sec.  5  ; 
1889,  May  16,  P.  L.  241,  sec.  2). 

22.  Amendments.  —  Charters  may  be  amended  for  the  purpose  of  improv- 
ing, amending,  or  altering  the  conditions  upon  which  they  were  formed  and 
established,  by  securing  the  approval  of  the  Governor  to  such  proposed  amend- 
ment. Notice  of  intention  to  apply  for  such  amendment  must  be  given  by 
publication  thereof  in  two  newspapers  of  general  circulation,  printed  in  the 
county  wherein  the  corporation's  principal  place  of  business  is  located,  once 
a  week  for  three  weeks.  This  notice  must  set  forth  briefly  the  character  and 
objects  of  the  desired  improvements,  amendments,  or  alterations,  and  the  inten- 
tion to  make  application  therefor.  Thereupon  the  corporation  shall  prepare 
a  certificate  under  its  corporate  seal,  setting  forth  the  character  and  objects  of 
the  proposed  amendment;  also  setting  forth  that  all  reports  required  by  the 
Auditor-General  of  the  Commonwealth  have  been  filed,  and  thai  all  taxes  due 

509 


DIGEST    OF    INCORPORATION    ACTS. — PENNSYLVANIA. 

the  Commonwealth  of  Pennsylvania  have  been  paid.  This  certificate  must 
be  acknowledged  by  the  president  and  secretary  of  the  corporation  before  the 
recorder  of  deeds  of  the  county  wherein  such  corporation  has  its  principal 
office  or  place  of  business,  which  certificate,  together  with  proof  of  publication 
of  notice,  shall  then  be  produced  to  the  Governor  of  the  Commonwealth  for 
his  approval.  After  this  is  obtained,  the  certificate  shall  then  be  recorded  in 
the  office  of  the  Secretary  of  the  Commonwealth,  and  with  all  these  endorse- 
ments shall  then  be  recorded  in  the  office  of  the  recorder  of  deeds  in  and  for 
the  proper  county  wherein  the  principal  place  of  business  of  such  corporation 
is  located  (1883,  June  13,  P.  L.  122,  sees.  1-4,  as  amended  by  1905,  March  31, 
P.  L.  93). 

The  capital  stock  or  indebtedness,  or  both,  of  any  corporation  created  by  gen- 
eral or  special  law  may,  with  the  consent  of  all  persons  or  bodies  corporate  hold- 
ing the  larger  amount  in  value  of  its  stock,  be  increased  to  such  amount  in  the 
aggregate  of  each,  without  regard  to  the  amount  of  the  other  and  regardless 
of  any  limitation  upon  the  amount  of  either,  prescribed  in  any  general  or  special 
law  regulating  any  such  corporation  as  it  shall  deem  necessary  to  accomplish, 
carry  on,  and  enlarge  the  business  and  purposes  of  such  corporation.  Such 
increase  of  either  may  be  made  at  once  or  from  time  to  time,  as  a  majority 
in  interest  of  the  stockholders  shall  determine,  as  aforesaid;  and  upon  the 
authorization  of  any  such  increase  of  indebtedness  by  the  stockholders  of  such 
corporation  in  the  manner  herein  provided  for,  it  shall  be  lawful  for  such  corpora- 
tion to  secure  the  payment  of  the  principal  or  interest,  or  both,  of  all  or  any 
part  of  such  indebtedness  by  mortgage  or  deed  of  trust  or  other  pledge  or  con- 
veyance by  way  of  security  of  all  or  any  part  of  its  real  and  personal  property, 
rights,  privileges,  and  franchises,  and  in  such  manner  and  upon  such  terms  as 
its  board  of  directors  shall  determine  (1899,  May  3,  P.  L.  189,  sec.  2;  1901, 
Feb.  9,  P.  L.  sec.  1 ;   1905,  April  22,  P.  L.  280). 

As  preliminary  to  the  increase  of  stock,  the  board  of  directors,  by  a  majority 
vote,  must  call  a  meeting  of  the  stockholders  to  vote  thereon.  The  question 
may  be  presented  either  at  any  annual  meeting  or  a  special  meeting  called 
by  publishing  notice  of  the  time,  place,  and  object  thereof  once  a  week  for 
sixty  days  prior  thereto,  in  at  least  one  newspaper  published  in  the  locality 
wherein  the  corporation's  principal  place  of  business  is  located.  Within 
thirty  days  after  the  proper  consent  is  given  to  such  increase,  the  corporation 
must  file  in  the  office  of  the  Secretary  of  the  Commonwealth  one  of  the  copies 
of  the  certificate  of  the  president  and  secretary  of  the  annual  meeting,  or 
one  of  the  copies  of  the  return  of  such  election  at  the  special  meeting  held  for 
that  purpose,  with  a  copy  of  the  resolution  and  notice  calling  the  same  thereto 
annexed.  Also  the  president  and  treasurer  must,  within  thirty  days  thereafter, 
make  a  return  to  the  Secretary  of  the  Commonwealth,  under  oath,  of  the  amount 
of  such  increase  actually  made ;  and  concurrently  therewith  the  bonus  tax  on 
the  increase  must  be  paid  (1901,  Feb.  9,  P.  L.  1,  sees.  1-3).  The  capital  stock 
of  any  corporation  created  by  general  or  special  law  may  be  reduced  from 
time  to  time  by  consent  of  the  persons  or  bodies  corporate  holding  the  larger 
amount  in  value  of  the  stock  of  such  corporation,  provided  that  such  reduc- 
tion shall  not  be  below  the  minimum  amount  of  capital  stock  required  by  law 
for  the  formation  of  corporations  formed  for  similar  purposes  (1905,  April  22, 
P.  L.  264). 

To  change  the  par  value  of  the  shares  requires  that  such  change  shall  be 
authorized  by  a  majority  of  the  stockholders  at  any  annual  or  special  meeting 

510 


DIGEST  OF  INCORPORATION  ACTS.  —  PENNSYLVANIA. 

called  for  that  purpose.  Upon  the  adoption  of  any  such  amendment,  the 
proper  officers  of  the  company  must  file  a  certificate  of  that  fact  in  the  office 
of  the  Secretary  of  the  Commonwealth,  under  the  seal  of  the  corporation  (1901, 
July  2,  P.  L.  606,  sec.  2). 

The  board  of  directors  may  change  the  location  of  the  principal  office, 
place,  and  time  of  the  annual  meeting  of  stockholders  by  a  two-thirds  vote  of 
the  board,  approved  by  two-tlnrds  vote  of  the  stockholders.  Upon  such  action 
being  taken,  the  president  must  file  in  both  the  office  of  the  Secretary  of  State 
and  Auditor-General  a  report  under  seal  of  the  corporation  specifying  the  changes 
so  made  (1830,  Feb.  6,  P.  L.  42,  sec.  2 ;    1893,  June  8,  P.  L.  355,  sec.  1). 

Cook  v.  Marshall,  191  Pa.  St.  315;  43  Atl.  Rep.  315. 

To  change  the  corporate  name  requires  a  resolution  of  the  board  of  directors, 
adopted  by  a  two-thirds  vote  thereof,  approved  at  any  annual  or  special  meet- 
ing of  the  stockholders  duly  called  by  a  two-thirds  vote  thereof.  Thereupon 
the  president  of  the  corporation  shall  file  in  the  office  of  the  Secretary  of  the 
Commonwealth  a  certificate  under  the  seal  of  the  company,  setting  forth  the 
resolution  adopted  by  the  board  of  directors  and  approved  by  the  stockholders, 
the  date  of  the  adoption  of  such  resolution  by  the  board  of  directors,  the  date 
of  the  approval  by  the  stockholders,  the  date  of  the  original  incorporation  of  the 
company,  the  Act  of  Assembly  under  which  the  said  corporation  was  created, 
the  name  under  which  it  was  originally  incorporated,  and  the  name  which  the 
corporation  desires  to  adopt.  All  corporations  required  to  record  the  original 
certificate  of  incorporation  in  the  office  for  the  recording  of  deeds  must  like- 
wise record,  in  the  office  for  the  recording  of  deeds  where  the  original  certificate 
of  incorporation  was  recorded,  the  certificate  granted  by  the  Secretary  of  the 
Commonwealth  authorizing  the  use  of  the  new  corporate  name  (1903,  April  22, 
P.  L.  251).  The  Act  of  March  27,  1865  (P.  L.  34,  sec.  6),  provides  that  errors 
in  incorporation  may  be  corrected  at  a  meeting  of  stockholders  specially  called 
for  that  purpose.  Thereafter  a  certificate  must  be  first  submitted  to  the  Attorney- 
General  and  certified  to  by  him  to  the  effect  that  the  same  is  in  conformity  with 
law.  Thereupon  this  certificate,  after  being  duly  attested  by  the  proper  officers 
of  the  corporation,  must  be  filed  with  the  Secretary  of  the  Commonwealth. 

23.  Extension  of  Corporate  Existence.  —  Provision  is  made  for  the  ex- 
tension of  corporate  existence  of  business  corporations  (1874,  April  29,  P.  L. 
73,  sees.  4,  40;  1895,  June  25,  P.  L.  310). 

24.  Dissolution.  —  Court  of  Common  Pleas  may  accept  surrender  of 
powers  and  enter  a  decree  dissolving  corporation,  with  consent  of  a  majority 
of  the  stockholders  and  after  advertisement  in  two  newspapers  (1856,  April 
9,  P.  L.  283,  sec.  1 ;  1872,  April  4,  P.  L.  40,  sec.  1 ;  1887,  May  31,  P.  L.  278, 
sees.  1,  3;  1903,  March  27,  P.  L.  79;    1907,  May  23,  P.  L.  105). 

M.  B.  Co.  v.  Company,  196  Pa.  St.  25;  46  Atl.  99. 

25.  Annual  License  Fee.  —  Five  mills  upon  each  dollar  of  the  actual 
value  of  its  whole  capital  stock  of  all  kinds,  including  common,  special,  and 
preferred,  must  be  paid  to  the  Treasurer  of  the  Commonwealth  annually  within 
thirty  days  from  date  of  settlement  of  the  accounl  by  the  Auditor-General 
and  State  Treasurer.  Manufacturing  companies  with  property  exclusively  in 
the  State  are  generally  exempt  from  this  annual  license  fee  ( 1893,  June  8,  P.  L. 
353,  sec.  1 ;   1899,  May  3,  P.  L.  120;    Laws  of  1907,  June  7,  P.  L.  29  I ). 

26.  Foreign  Corporations.  -  -Statement  must  he  filed  with  the  Secretary 
of  the  Commonwealth,  showing  name  and  object  of  the  corporation,  location  of 

;,1  1 


DIGEST    OF    INCORPORATION    ACTS.  —  PENNSYLVANIA. 

its  office,  and  resident  agent  therein ;  must  also  pay  State  Treasurer  a  bonus 
of  one-third  of  one  per  cent  upon  the  capital  actually  employed  or  to  be  em- 
ployed wholly  within  the  State ;  must  file  annual  report  with  the  Auditor- 
General.  Foreign  corporations  may  become  domestic,  if  they  so  desire,  by 
complying  with  the  statute  in  such  case  made  and  provided.  The  same  annual 
tax  is  required  as  of  domestic  corporations,  based,  however,  upon  the  amount 
of  capital  actually  employed  within  the  State  (1881,  June  9,  P.  L.  sees.  1,  3; 
1887,  May  23,  P.  L.  176,  sees.  1,  2;  1893,  June  8,  P.  L.  389,  sees.  1,  2;  1893, 
June  16,  P.  L.  466,  sec.  1;  1901,  May  8,  P.  L.  121;  1903,  April  15,  P.  L.  200; 
1903,  Feb.  5,  P.  L.  4;  1903,  March  11,  P.  L.  23;  1903,  March  26,  P.  L.  67;  1905, 
Feb.  28,  P.  L.  27;  Laws  of  1907,  June  7,  P.  L.  294).  Every  foreign  corporation, 
before  doing  any  business  in  this  Commonwealth,  shall  appoint  in  writing  the 
Secretary  of  the  Commonwealth  and  his  successor  in  office  to  be  his  true  and 
lawful  attorney  and  authorized  agent  upon  whom  all  lawful  process  in  any 
action  or  proceeding  against  it  may  be  served;  and  service  of  process  on  the 
Secretary  of  the  Commonwealth  shall  be  of  the  same  legal  force  and  validity  as 
if  served  on  it;  and  the  authority  for  such  service  of  process  shall  continue  in 
force  so  long  as  any  liability  remains  outstanding  against  it  in  the  Commonwealth. 
The  power  of  attorney  shall  be  executed  with  the  seal  of  the  corporation  and 
signed  by  the  president  and  secretary  thereof,  and  shall  contain  a  statement, 
showing  the  title  and  purpose  of  such  corporation  and  location  of  its  principal 
place  of  business  in  the  Commonwealth,  and  the  post-office  address  witlun  the 
Commonwealth  to  which  the  Secretary  of  the  Commonwealth  shall  send  by 
mail  any  process  against  it  served  on  him;  which  address  such  corporation  may 
change  from  time  to  time  as  it  may  find  occasion,  by  filing  a  certificate  under 
its  corporate  seal  with  the  Secretary  of  the  Commonwealth,  setting  forth  such 
change  of  address.  Upon  the  payment  of  a  fee  of  $10  for  the  use  of  the  Common- 
wealth, the  said  power  of  attorney  and  statement  shall  be  filed  in  the  office  of 
the  Secretary  of  the  Commonwealth,  and  copies,  certified  by  him,  shall  be  suffi- 
cient evidence  thereof.  Service  of  such  process  shall  be  made  by  attorney  of 
Dauphin  County  by  leaving  two  copies  of  the  process  and  a  fee  of  $2  in  the 
hands  or  at  the  office  of  the  Secretary  of  the  Commonwealth,  and  he  shall  make 
due  return  of  his  service  of  such  process  to  the  court,  magistrate  or  justice  of 
the  peace  issuing  the  same.  Such  process  may  be  issued  by  any  court,  or  magis- 
trate or  justice  of  the  peace  having  jurisdiction  of  the  subject  matter  in  contro- 
versy, in  any  county  of  the  Commonwealth  in  which  such  corporation  shall 
have  its  principal  place  of  business,  or  any  such  county  in  which  the  right  of 
action  arose.  Upon  the  filing  of  the  said  power  of  attorney  with  the  Secretary 
of  the  Commonwealth  it  shall  be  his  duty  to  certify  forthwith  to  the  auditor- 
general  the  corporate  name  of  the  corporation  filing  the  same  and  the  location 
of  its  principal  place  of  business  in  the  Commonwealth  as  set  forth  in  said  power 
of  attorney  (P.  L.  1911,  p.  710,  sec.  2). 

Sec.  3.  When  legal  process  against  any  such  corporation  has  been  served 
upon  the  Secretary  of  the  Commonwealth  it  shall  be  sent  by  mail,  postage  pre- 
paid, and  one  copy  of  such  process  directed  to  the  corporation  at  the  post-office 
address  designated  by  it  as  hereinbefore  provided.  The  fee  of  $2  paid  by  the 
plaintiff  to  the  Secretary  of  the  Commonwealth  at  the  time  of  the  service  shall 
be  taxed  in  his  costs  if  he  prevails  in  the  suit.  The  Secretary  of  the  Common- 
wealth shall  keep  a  record  of  the  day  and  hour  of  the  service  of  such  process  on 
him,  and  a  certified  copy  of  such  report  shall  be  sufficient  evidence  thereof  (P.  L. 
1911,  p.  711). 

512 


DIGEST   OF   INCORPORATION*   ACTS. PENNSYLVANIA.. 

Sec.  5.  The  act  entitled  "  An  Act  to  prohibit  foreign  corporations  from 
doing  business  in  Pennsylvania  without  having  a  known  place  of  business  and 
authorized  agent,"  approved  the  22d  day  of  April,  1S74,  P.  L.  10S)  be  and  the 
same  is  hereby  repealed,  and  all  other  acts  of  Assembly  inconsistent  with  the 
provisions  hereof  or  supplied  hereby  are  also  hereby  repealed;  provided,  how- 
ever, that  the  license  fee  or  fine  of  $250  prescribed  in  the  fourth  section  of  tins 
act  shall  not  be  required  or  imposed  upon  any  foreign  corporations  now  duly 
registered  under  such  act  approved  the  22d  day  of  April,  1874,  and  hereby  re- 
pealed, if  such  foreign  corporation  shall  file  the  power  of  attorney  and  statement 
provided  for  in  section  2  of  this  act  in  the  office  of  the  Secretary  of  the  Com- 
monwealth within  one  year  after  the  date  of  the  approval  hereof;  nor  shall  the 
repeal  of  such  act  be  construed  as  in  any  wise  affecting  the  existing  rights  or 
liabilities  of  any  foreign  corporation  now  duly  registered  therein ;  and  provided 
further,  that  this  act  shall  not  be  construed  to  apply  to  foreign  insurance  com- 
panies, but  the  doing  of  business  in  this  Commonwealth  by  such  companies 
shall  be  regulated  by  existing  laws  (P.  L.  1911,  p.  712,  sec.  5).  Every  foreign 
corporation  must  further,  before  commencing  business  in  the  State,  make  a 
report,  under  oath,  to  the  Auditor-General,  stating:  (1)  State  or  country  in 
which  incorporated  or  created;  (2)  date  of  incorporation;  (3)  location  of  chief 
office  in  the  State;  (4)  name  and  address  of  president;  (5)  amount  of  bonded 
indebtedness;  (6)  amount  of  authorized  capital  stock;  (7)  amount  of  capital 
paid  in;  (8)  amount  of  capital  employed  wholly  in  Pennsylvania.  A  similar 
report  must  be  filed  annually  thereafter  before  November  30th  of  each  year 
(1901,  May  8,  P.  L.  121).  A  fifing  fee  of  $10.75  must  accompany  the  applica- 
tion for  permit  to  do  business  within  the  State.  With  some  few  exceptions 
foreign  corporations  have  no  power  to  hold  real  estate  in  Pennsylvania  (1893, 
Acts  296,  338;  P.  L.  65,  April  20,  1911;  see  also  as  to  foreign  iron  and  steel 
corporations,  1893,  June  8,  P.  L.  389,  sec.  1;  1901,  April  19,  P.  L.  86,  sec.  1). 

Mr  ('anna  &  Fraser  Co.  v.  Citizens'  Trust,  etc.  Sur.  Co.,  76  Fed.  420;  24  CCA.  11 ;  Com- 
monwealth v.  Company,  98  Penn.  90;  In  re  Hovey's  Estate,  198  Pa.  St.  385;  48  Atl.  311; 
P  B.  L.  &  S.  Ass'n  v. "Berlin,  201  Pa.  St.  1;  50  Atl.  308;  Madden  v.  Company,  199  Pa.  St. 
454;  49  Atl.  296. 


33  513 


DIGEST    OF    INCORPORATION    ACTS.  —  PHILIPPINE   ISLANDS. 


PHILIPPINE   ISLANDS. 

(The  references  below  are  to  Acts  of  the  Philippine  Commission,  1459,  enacted  March  1, 
1906.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. 
—  On  March  1,  1906,  the  Philippine  Commission  enacted  a  General  Business 
Corporation  Act,  to  take  effect  on  April  1,  1906.  Special  provision  is  made  for 
railways,  savings  and  mortgage  banks,  banking  corporations,  trust  companies, 
insurance  companies,  building  and  loan  associations,  colleges,  and  eleemosy- 
nary corporations.  Under  the  General  Act  no  corporation  can  be  authorized 
to  conduct  the  business  of  buying  and  selling  real  estate,  nor  is  it  permitted  to 
hold  or  own  real  estate  except  such  as  may  be  reasonable  and  necessary  to  enable 
it  to  carry  out  the  purposes  for  which  it  was  created.     (See  sec.  13,  sub.  5.) 

2.  Incorporators.  —  Not  less  than  five  nor  more  than  fifteen.  A  ma- 
jority thereof  must  be  residents  of  the  Philippine  Islands  (sec.  6). 

3.  Contents  of  the  Articles  of  Incorporation.  —  The  articles  of  incor- 
poration must  contain : 

a.  Name.  —  Any  name  is  permitted  not  already  in  use  by  another  domestic 
corporation,  or  by  a  foreign  corporation  authorized  to  transact  business  in  the 
Philippines. 

b.  Purpose.  —  The  purpose  for  which  the  corporation  is  formed.  The  in- 
sertion of  more  than  one  line  of  business  is  permitted,  provided  the  same  is  not 
covered  by  special  act. 

c.  Domicile.  —  The  place  where  the  principal  office  is  to  be  established  or 
located,  which  place  must  be  within  the  Philippine  Islands. 

d.  Corporate  Existence.  —  The  term  for  which  it  is  to  exist,  not  exceeding 
fifty  years. 

e.  Incorporators.  —  The  names  and  residences  of  the  incorporators. 

/.  Directors.  —  The  number  of  directors  of  the  corporation,  not  less  than 
five  nor  more  than  eleven.  The  names  and  residences  of  the  directors  who  are 
to  serve  until  their  successors  are  elected  and  qualify  must  be  set  forth. 

g.  Capital  Stock.  —  Amount  of  capital  stock  in  Philippine  currency  and  the 
number  of  shares  into  which  it  is  divided.  The  par  value  of  the  shares  may  be 
any  amount. 

h.  Stock  Subscriptions.  —  The  amount  of  capital  stock  actually  subscribed, 
the  names  and  residences  of  the  persons  subscribing,  the  amounts  subscribed 
by  each,  and  the  sum  paid  by  each  on  his  subscription  (sees.  6,  7). 

4.  Statutory  Powers.  —  The  statutory  powers  enumerated  in  the  act  are 
in  the  main  the  usual  common  law  powers  of  corporations.  In  addition  to  these 
the  following  extraordinary  powers  are  granted:  To  delegate  to  the  directors 
the  power  to  adopt  and  amend  by-laws;  to  remove  directors;  to  forfeit  stock 
for  non-payment  of  assessments.  Voting  by  proxy  is  also  permitted  (sees.  13, 
21,  22,  34). 

5.  Procuring  the  Charter. — The  articles  of  incorporation  must  first  be 
drawn  in  accordance  with  the  form  set  forth  in  the  Corporation  Act.  The  arti- 
cles must  then  be  signed  by  the  incorporators,  and  the  execution  thereof  be 
duly  acknowledged  before  a  notary  public.  To  the  articles  must  be  annexed 
the  affidavit  of  the  treasurer  elected  by  the  incorporators,  to  the  effect  that  he 

514 


DIGEST    OF    INCORPORATION    ACTS.  —  PHILIPPINE   ISLANDS. 

was  duly  elected  by  the  subscribers  named  in  the  articles  of  incorporation  as 
treasurer  of  the  corporation,  to  act  as  such  until  his  successor  has  been  duly 
elected  and  qualified  in  accordance  with  the  by-laws  of  the  corporation,  and 
that  as  such  treasurer  he  has  been  authorized  by  the  subscribers  to  receive  for 
the  corporation  all  subscriptions  paid  in  by  the  subscribers  for  the  capital 
stock.  Next,  he  must  name  the  amount  of  money  in  pesos  that  has  been  actu- 
ally subscribed  and  the  amount  that  has  been  actually  paid  in  for  the  benefit 
and  to  the  credit  of  the  corporation.  He  must  further  certify  that  at  least 
twenty  per  cent  of  the  capital  stock  has  been  subscribed  and  at  least  twenty- 
five  per  cent  of  subscriptions  have  been  actually  paid  in  to  him  for  the  benefit 
and  to  the  credit  of  the  corporation.  Next,  the  articles  must  be  filed  in  the 
office  of  the  Chief  of  the  Division  of  Archives,  Patents,  Copyrights,  Trade  Marks, 
of  the  Executive  Bureau.  At  the  same  time  there  must  be  paid  to  lnm  the 
organization  tax  provided  by  law. 

It  will  be  noted  that  before  the  articles  can  be  filed  the  subscribers  to  the 
capital  stock  of  the  corporation  as  named  in  the  articles  must  meet  and  elect  a 
treasurer,  who  is  required  to  take  subscriptions  to  at  least  twenty  per  cent  of 
the  entire  capital  stock  and  to  receive  at  least  twenty-five  per  cent  of  the  stock 
subscribed  for.  The  Chief  of  the  Division  of  Archives,  Patents,  Copyrights,  and 
Trade  Marks  issues  a  certificate  of  incorporation  as  soon  as  the  requirements 
named  above  have  been  complied  with  (sees.  6-11  inclusive). 

6.  Corporate  Indebtedness.  —  There  is  no  limit  upon  the  amount  of 
indebtedness  which  a  corporation  may  incur. 

7.  Organization  Tax.  —  There  is  an  organization  tax  or  filing  fee  of 
twenty-five  pesos  imposed  without  regard  to  the  amount  of  capitalization 
(sec.  8). 

8.  Filing  and  Recording  Fees.  —  Payment  of  the  organization  tax  of 
twenty-five  pesos  includes  the  fees  of  the  Chief  of  the  Division  of  Archives, 
Patents,  Copyrights,  and  Trade  Marks  for  filing  the  articles  of  incorporation. 
The  charge  for  issuing  a  certified  copy  of  articles  of  incorporation  is  approxi- 
mately five  pesos  (sec.  8). 

9.  Commencing  Business. — The  corporation  must  be  properly  organ- 
ized and  commence  the  transaction  of  its  business  or  the  construction  of  its 
works  within  two  years  from  the  date  of  its  incorporation;  otherwise,  its  cor- 
porate powers  shall  cease.  Before  any  business  may  be  transacted,  twenty  per 
cent  of  the  entire  capital  stock  must  be  subscribed,  and  at  least  twenty-five 
per  cent  of  the  subscription  paid  in  to  the  treasurer  of  the  corporation  for  the 
benefit  and  to  the  credit  of  the  corporation.  Within  one  month  after  the  filing 
of  the  articles  of  incorporation  a  code  of  by-laws  must  be  adopted  by  a  majority 
vote  of  all  the  subscribed  capital  stock.  The  by-laws  must  be  signed  by  the 
stockholders  voting  for  them,  and  kept  in  the  principal  office  of  the  corpora- 
tion subject  to  the  inspection  of  the  stockholders  during  office  hours.  A  copy 
thereof,  duly  certified  to  by  a  majority  of  the  directors,  countersigned  by  the 
secretary  of  the  corporation,  shall  be  filed  with  the  Chief  of  the  Division  of 
Archives,  Patents,  Copyrights,  and  Trade  Marks,  who  shall  attach  the  same 
to  the  original  articles  of  incorporation,  and  collect  a  fee  of  two  pesos  for  the 
filing  thereof  (sec.  20). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  Philippine  Islands.  The  act  provides  that  it  shall  be  held  where  the 
principal  office  of  the  corporation  is  established  or  located,  and,  where  prac- 
ticable, in  the  principal  office  of  the  corporation  (sec.  24). 

515 


DIGEST    OF   INCORPORATION    ACTS.  —  PHILIPPINE    ISLANDS. 

11.  Meetings  of  Stockholders  and  Directors. — The  stockholders' 
meetings  must  be  held  in  the  Philippine  Islands  at  the  place  where  the  principal 
office  of  the  corporation  is  established  or  located,  and,  where  practicable,  in  the 
principal  office  of  the  corporation.  Directors'  meetings  may  be  held  at  the 
place  fixed  by  the  by-laws  (sec.  24). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  at  least  five  and  not  more  than  eleven  directors,  all  of  whom 
must  be  stockholders.  At  least  two  of  the  directors  must  be  residents  of  the 
Philippine  Islands.  Any  director  who  ceases  to  be  the  owner  of  at  least  one 
share  of  stock  of  the  corporation  of  which  he  is  a  director  shall  thereby  cease 
to  be  a  director  (sees.  6,  28). 

b.  Liabilities.  —  Directors  are  liable  for  the  declaration  of  illegal  dividends 
and  for  the  distribution  of  the  capital  stock  or  property  other  than  actual  profits 
among  the  stockholders  without  having  first  paid  the  debts  of  the  corporation 
(sec.  16). 

13.  Removal  of  Directors.  —  Directors  of  a  corporation  may  be  removed 
from  office  by  a  vote  of  two-thirds  of  the  members  entitled  to  vote,  or,  if  the 
corporation  be  a  stock  corporation,  by  a  vote  of  the  stockholders  holding  or 
representing  two-thirds  of  the  subscribed  capital  stock  entitled  to  vote ;  pro- 
vided, however,  that  such  removal  shall  take  place  either  at  a  regular  meeting 
of  the  corporation  or  at  a  special  meeting  called  for  that  purpose,  and  in  either 
case  after  previous  notice  to  stockholders  or  members  of  the  intention  to  pro- 
pose such  removal  at  the  meeting.  A  special  meeting  of  the  stockholders  or 
members  of  a  corporation  for  the  purpose  of  removal  of  directors,  or  any  of 
them,  must  be  called  by  the  secretary  or  clerk  on  order  of  the  president,  or  on 
the  written  demand  of  a  majority  of  the  members  entitled  to  vote,  or,  if  it  be  a 
stock  corporation,  on  the  written  demand  of  the  stockholders  representing  or 
holding  at  least  one-half  of  the  shares  entitled  to  be  voted.  Should  the  secretary 
or  clerk  fail  or  refuse  to  call  the  special  meeting  demanded,  or  fail  or  refuse  to 
give  the  notice,  or  if  there  is  no  secretary  or  clerk  the  call  for  the  meeting  may 
be  addressed  directly  to  the  members  or  stockholders  by  any  member  or  stock- 
holder of  the  corporation  signing  the  demand.  Notice  of  the  time  and  place  of 
such  meeting,  as  well  as  of  the  intention  to  propose  such  removal,  must  be  given 
by  publication  or  by  written  notice  as  prescribed  in  sec.  29.  In  case  of  removal 
on  the  vote  of  the  stockholders  or  the  members,  as  the  case  may  be,  the  vacancy 
so  created  may  be  filled  by  election  at  the  same  meeting  without  further  notice 
or  at  any  general  meeting  or  at  any  special  meeting  called  for  the  purpose,  after 
giving  notice  as  prescribed  by  sec.  29  (sec.  34). 

14.  Stockholders'  Liabilities.  —  Stockholders  are  personally  liable  to 
creditors  to  an  amount  equal  to  their  unpaid  stock  subscriptions  (sees.  36-50). 

15.  Stock  Certificates.  —  Stock  certificates  must  be  signed  by  the  presi- 
dent or  vice-president  and  countersigned  by  the  secretary  or  clerk  and  sealed 
tvith  the  seal  of  the  corporation.  Any  share  of  stock  against  which  the  corpora- 
tion holds  any  unpaid  claim  is  not  transferable  on  the  books  of  the  corporation. 
No  certificate  of  stock  shall  be  issued  to  a  subscriber  as  fully  paid,  until  the  par 
value  thereof  has  been  paid  by  him  (sees.  35,  36). 

16.  Preferred  Stock. — The  issuance  of  preferred  stock  is  not  specifi- 
cally authorized  by  the  act.  Provision  may,  however,  be  made  for  the  issuance 
of  preferred  stock  by  reference  thereto  in  the  articles  of  incorporation. 

17.  Payment  of  Capital  Stock.  — No  corporation  can  issue  stock  except 
in  exchange  for  actual  cash  paid  to  the  corporation,  or  for  property  actually 

516 


DIGEST    OF    INCORPORATION    ACTS.  —  PHILIPPINE    ISLANDS. 

received   by  it   at  a  fair  valuation  equal  to  the  par  value  of  the  stock  issued 
against  it  (sec.  16). 

18.  Books.  —  All  business  corporations  must  keep  a  record  of  all  their 
business  transacted  and  the  minutes  of  all  meetings  of  directors  ami  stockhold- 
ers. Such  records  and  minutes  are  open  to  the  inspection  of  any  director  or 
stockholder  of  the  corporation  at  reasonable  hours.  A  stock  and  transfer  book 
must  also  be  kept ;  this  is  likewise  open  to  the  inspection  of  any  stockholder  or 
director  at  reasonable  hours  (sees.  51,  52). 

19.  Office.  —  Every  corporation  must  maintain  a  principal  office  within  the 
Philippine  Islands  (sec.  6). 

20.  Reports.  —  No  public  reports  are  required  to  be  regularly  made  or 
published.     (See,  however,  sees.  54.  55.) 

21.  Anti-Trust  Statute.  —  There  is  no  local  anti-trust  statute  exclusively 
applicable  to  the  Philippine  Islands  in  force  and  effect  therein. 

22.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  If  a  corporation 
does  not  formally  organize  and  commence  the  transaction  of  its  business  or  the 
construction  of  its  works  within  two  years  from  the  date  of  its  incorporation  its 
charter  may  be  forfeited  by  proper  action  brought  in  that  behalf  by  the  At- 
torney-General. 

23.  Amendments.  —  To  increase  or  diminish  the  capital  stock  requires  a 
two-thirds  vote  of  the  entire  capital  stock  subscribed  cast  in  favor  thereof  at 
a  stockholders'  meeting  regularly  called  for  that  purpose.  "Written  or  printed 
notice  of  the  proposed  increase  or  diminution  of  the  capital  stock,  and  of  the 
time  and  place  of  the  stockholders'  meeting  at  which  the  proposed  increase  or 
diminution  of  the  stock  is  to  be  considered,  must  be  addressed  to  each  stock- 
holder at  his  place  of  residence  as  shown  by  the  books  of  the  corporation  and 
registered  and  deposited  so  addressed  in  the  post-office  with  postage  prepaid. 

A  certificate  in  duplicate  must  be  signed  by  a  majority  of  the  directors  of  the 
corporation  and  countersigned  by  the  chairman  and  secretary  of  the  stock- 
holders' meeting,  showing  compliance  with  the  requirements  of  this  section, 
the  amount  of  the  increase  or  diminution  of  the  capital  stock,  the  amount  of 
stock  represented  at  the  meeting,  and  the  vote  authorizing  the  increase  or 
diminution  of  the  capital  stock.  One  of  the  duplicate  certificates  shall  be  kept 
on  file  in  the  office  of  the  corporation  and  the  other  shall  be  filed  in  the  office  of 
the  Chief  of  the  Division  of  Archives,  Patents,  Copyrights,  and  Trade  Marks  of 
the  Executive  Bureau,  and  attached  by  him  to  the  original  articles  of  incorpora- 
tion. From  and  after  the  filing  of  the  duplicate  certificate  with  the  Chief  of  the 
said  division  the  capital  stock  shall  stand  increased  or  reduced. 

The  Chief  of  the  said  Division  of  Archives,  Patents,  Copyrights,  and  Trade 
Marks  shall  be  entitled  to  collect  the  sum  of  twenty  pesos  for  filing  said  duplicate 
certificate  (sec.  17). 

Any  corporation  may  amend  its  articles  of  incorporation  by  a  majority  vote 
of  the  board  of  directors  or  trustees  and  the  vote  or  written  assent  of  two-thirds 
of  its  members,  if  it  be  a  non-stock  corporation,  or,  if  it  be  a  stock  corporation,  by 
the  vote  or  written  assent  of  the  stockholders  representing  at  least  two-thirds 
of  the  subscribed  capital  stock  of  the  corporation.  A  copy  of  the  articles  of  in- 
corporation as  amended,  duly  certified  to  be  correct  by  the  president  and  the 
secretary  of  the  corporation  and  a  majority  of  the  board  of  directors  or  trustees, 
shall  be  filed  in  the  office  of  the  Chief  of  the  Division  of  Archives,  Patents.  Copy- 
rights, and  Trade  Marks  of  the  Executive  Bureau  and  attached  to  the  original 
articles  of  incorporation,  and  from  time  of  filing  of  such  copy  of  the  amended 

517 


DIGEST    OF    INCORPORATION    ACTS.  —  PHILIPPINE    ISLANDS. 

articles  of  incorporation  the  corporation  shall  have  the  same  powers,  and  it  and 
the  members,  or  stockholders  thereof  shall  thereafter  be  subject  to  the  same 
liabilities,  as  if  such  amendment  had  been  embraced  in  the  original  articles  of 
incorporation:  provided,  however,  that  the  life  of  said  corporation  shall  not 
be  extended  by  said  amendment  beyond  the  time  fixed  in  the  original  articles ; 
and  provided,  that  the  original  articles  and  the  amended  articles  together  shall 
contain  all  provisions  required  by  law  to  be  set  out  in  the  articles  of  incorpora- 
tion ;  and  provided  further,  that  nothing  in  this  section  shall  be  construed  to 
authorize  any  corporation  to  increase  or  diminish  its  capital  stock  so  as  to  affect 
any  rights  or  actions  which  accrued  to  others  between  the  time  of  the  filing  of 
the  original  articles  of  incorporation  and  the  filing  of  the  amended  articles 
(sec.  18). 

The  number  of  directors  may  be  increased  to  any  number  not  exceeding 
eleven,  or  diminished  to  any  number  not  less  than  five,  by  the  assent  of  the  stock- 
holders of  the  corporation  at  a  regular  or  special  meeting  of  stockholders  repre- 
senting the  holders  of  a  majority  of  the  stock.  Thereafter  a  certificate  setting 
out  such  increase  or  diminution  in  the  number  of  directors  of  any  corporation 
shall  be  duly  signed  and  sworn  to  by  the  president,  managing  agent,  secretary, 
or  clerk  or  treasurer  of  such  corporation  and  forthwith  filed  in  the  office  of  the 
Chief  of  the  Division  of  Archives,  Patents,  Copyrights,  and  Trade  Marks  of 
the  Executive  Bureau  (sec.  6). 

24.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for  the 
extension  of  corporate  existence. 

25.  Dissolution.  —  The  corporation  may  be  dissolved  by  the  Court  of 
First  Instance  for  the  province  where  the  principal  office  of  the  corporation  is 
situated  upon  the  voluntary  application  of  stockholders  holding  at  least  two- 
thirds  of  the  stock  issued  or  subscribed.  Application  for  dissolution  must  be 
in  writing,  and  shall  set  forth  all  claims  and  demands  against  the  corporation. 
It  must  be  signed  by  a  majority  of  the  board  of  directors  or  other  officers  having 
the  management  of  the  affairs  of  the  corporation,  and  must  be  verified  by  the 
president,  secretary  or  clerk,  or  some  director  of  the  corporation  (sees.  62-67 
inclusive). 

26.  Annual  Franchise  Tax.  —  There  is  no  annual  franchise  tax  imposed. 

27.  Foreign  Corporations.  —  No  foreign  corporation  or  corporations 
formed,  organized,  or  existing  under  any  laws  other  than  those  of  the  Philippine 
Islands  shall  be  permitted  to  transact  business  in  the  Philippine  Islands  until 
after  it  shall  have  obtained  a  license  for  that  purpose  from  the  chief  of  the 
division  of  archives,  patents,  copyrights,  and  trade-marks  of  the  executive 
bureau  upon  order  of  the  secretary  of  finance  and  justice  in  case  of  banks,  sav- 
ings and  loan  banks,  trust  corporations,  and  banking  institutions  of  all  kinds, 
and  upon  order  of  the  Secretary  of  Commerce  and  Police  in  case  of  all  other 
foreign  corporations.  No  order  for  a  license  shall  be  issued  by  either  of  said 
secretaries  except  upon  a  statement  under  oath  of  the  managing  agent  of  the 
corporation,  showing  to  the  satisfaction  of  the  proper  secretary  that  the  cor- 
poration is  solvent  and  in  sound  financial  condition,  and  setting  forth  the 
resources  and  liabilities  of  the  corporation  within  sixty  days  of  the  date  of 
presenting  the  statement,  as  follows : 

(1)  Name  of  the  corporation. 

(2)  The  purpose  for  which  it  was  organized. 

(3)  The  location  of  its  principal  or  home  office. 

(4)  The  capital  stock  of  the  corporation  and  the  amount  thereof  actually 

518 


DIGEST    OF    INCORPORATION    ACTS.  —  PHILIPPINE    ISLANDS. 

subscribed  and  paid  into  the  treasury  on  the day  of (here  in- 
sert date,  month,  year). 

(5)  The  net  assets  of  the  corporation  over  and  above  all  debts,  liabilities, 
obhgations,  and  claims  outstanding  against  it  on (here  in- 
sert date,  month,  year). 

(6)  The  name  of  an  agent  residing  in  the  Philippine  Islands  authorized  I>y 
the  corporation  to  accept  service  of  summons  and  process  in  all  legal  proceed- 
ings against  the  corporation  and  of  all  notices  affecting  the  corporation. 

Upon  filing  in  the  division  of  archives,  patents,  copyrights  and  trade  marks, 
of  the  executive  bureau  the  said  statement,  a  certified  copy  of  its  charter  and 
the  order  of  the  secretary  of  finance  and  justice  or  of  the  secretary  of  commerce 
and  police,  as  the  case  may  be,  for  the  issuance  of  a  license,  the  chief  of  the  said 
division  shall  issue  to  the  foreign  corporation  as  directed  in  the  order  a  license 
to  do  business  in  the  Philippine  Islands,  and  for  the  issuance  of  said  license  the 
chief  of  the  said  division  shall  collect  a  fee  of  fifty  pesos,  provided,  however, 
that  the  secretary  of  finance  and  justice  or  the  secretary  of  commerce  and  police, 
as  the  case  may  be,  may  issue  to  any  foreign  commercial  corporation  transact- 
ing business  in  the  Plulippine  Islands  at  the  time  of  the  passage  of  this  act  and 
continuously  in  the  Philippine  Islands  for  more  than  three  years  prior  thereto 
a  license  to  do  business  in  the  Philippine  Islands  without  requiring  the  state- 
ment prescribed  by  this  section,  but  the  license  to  so  transact  business  shall  be 
secured  and  the  fee  paid  therefor  by  such  corporation  (sec.  68). 

On  May  8,  1907  (Act  No.  659)  the  following  statute  was  enacted : 
"Any  corporation  operating  at  the  time  of  the  passage  of  this  act  under  a 
special  franchise  granted  by  the  Philippine  Commission  is  hereby  exempted  from 
compliance  with  the  provisions  of  sixty-eight,  sixty-nine,  seventy,  and  seventy- 
one  of  the  corporation  lawT :  Provided,  however,  that  the  corporation  so  exempted 
shall  be  obliged  to  name  an  agent  residing  in  the  Philippine  Islands  authorized 
by  the  corporation  to  accept  service  of  summons  and  process  in  all  legal  proceed- 
ings against  the  corporation,  and  of  all  notices  affecting  the  corporation,  and 
shall  file  its  designation  of  such  agent  in  the  division  of  archives,  patents,  copy- 
rights, and  trademarks  of  the  executive  bureau,  together  with  a  duly  authenti- 
cated copy  of  its  articles  of  incorporation,  and  pay  a  fee  of  fifty  pesos  for  the 
filing  of  said  designation  and  copy  of  articles  of  incorporation,  on  or  before  the 
first  day  of  August,  nineteen  hundred  and  seven:  And  provided  further,  that 
any  corporation  by  this  section  exempted  from  compliance  with  sections  sixty- 
eight,  sixty-nine,  seventy,  and  seventy-one  of  the  corporation  law,  as  above 
provided,  shall  file  with  the  division  of  archives,  patents,  copyrights,  and  trade- 
marks of  the  executive  bureau  a  statement  of  the  amount  of  stocks  and  bonds 
actually  issued  and  the  cash  or  property  consideration  for  such  issue  of  stocks 
or  bonds.  In  case  stocks  or  bonds  were  issued  in  consideration  of  property 
transferred  or  conveyed  to  such  corporation,  then  such  statement  shall  contain 
a  declaration  of  the  fair  valuation  of  such  property.  And  provided,  further, 
that  all  other  sections  of  the  corporation  law  which  are  applicable  to  foreign 
corporations  or  to  corporations  not  formed  <>r  organized  under  the  laws  of  the 
Philippine  Islands  shall  be  applicable  to  corporations  exempted  by  this  section 
from  compliance  with  the  provisions  of  sections  sixty-eight,  sixty-nine,  seventy, 
and  seventy-one  of  the  said  corporation  law." 


519 


DIGEST   OF   INCORPORATION    ACTS. — PORTO    RICO. 


PORTO   RICO. 

(The  references  cited  below  are  to  the  Civil  Code  of  Porto  Rico,  Revision  of  1902,  unless 
otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Law  of  Porto  Rico  is  to  be  found  in  the  Revised 
Statutes  and  Acts  of  1902,  Title  II,  of  the  Civil  Code,  sees.  32-71.  Under  the 
general  law  corporations  may  be  formed  for  any  lawful  purpose,  except  bank- 
ing, building  and  loan,  insurance,  railroad,  telegraph,  telephone,  canal  or  turn- 
pike companies. 

2.  Incorporators.  —  Three  or  more,  of  full  legal  capacity  (sec.  35).  There 
are  no  residential  requirements. 

3.  Contents  of  Articles  of  Incorporation.  — The  articles  must  contain 
(sec.  36): 

a.  Name.  —  Similarity  of  names  is  forbidden  (sec.  36,  1"). 

b.  Domiciliary  Office.  —  The  location,  including  the  town,  or  city,  street  and 
number  if  there  be  any,  of  the  principal  office  in  Porto  Rico  (sec.  36,  2). 

c.  Duration.  —  The  period,  if  any,  limited  for  the  duration  of  the  corpora- 
tion.   The  duration  may  be  perpetual  if  desired  (sec.  36,  3). 

d.  Pur-poses.  —  The  object  or  objects  for  which  the  corporation  is  formed 
(sec.  36,  4). 

e.  Capital  Stock.  —  The  amount  of  the  total  authorized  capital  stock,  which 
cannot  be  less  than  $2,000.  Also  the  number  of  shares  into  which  the  same  is 
divided  and  the  par  value  of  each  share.  (The  par  value  may  be  any  amount.) 
The  amount  of  paid  in  capital  with  which  the  corporation  may  commence  busi- 
ness, which  shall  not  be  less  than  $1,000  (sec.  36,  5). 

/.  Incorporators.  —  Names  and  post-office  addresses  of  the  incorporators  and 
the  number  of  shares  subscribed  for  and  the  amount  of  subscriptions  paid  in  by 
each  (sec.  36,  6). 

g.  Provision  for  Regulation  of  Internal  Affairs.  —  Any  provision  which  the 
incorporators  may  choose  to  insert  for  the  regulation  of  the  business  and  the 
conduct  of  the  affairs  of  the  corporation,  or  for  creating,  defining,  or  limiting 
and  regulating  the  powers  of  the  corporation,  directors,  or  of  the  stockholders 
(sec.  36,  7). 

4.  Statutory  Powers.  —  The  usual  common  law  powers  are  enumerated. 
Under  the  act  banking  powers  are  specifically  prohibited  (sec.  33).  Only 
such  property  may  be  held  as  may  be  necessary  to  accomplish  the  purposes 
stated  in  the  articles  of  incorporation  (sec.  32).  Agricultural  corporations  are 
limited  to  holding  five  hundred  acres  of  land.  Corporations  other  than  agri- 
Cultural  corporations  may  hold  stock  in  other  corporations,  provided  such  cor- 
porations own  property  necessary  for  its  business  (sec.  45).  Other  express 
powers  conferred  are  the  right  to  permit  stockholders  to  vote  by  proxy  (sec.  42), 
to  classify  directors  (sec.  40) ;  to  confer  upon  directors  power  to  adopt  by-laws 
(sec.  39). 

5.  Procuring  the  Charter.  —  The  articles  must  be  subscribed  and  ac- 
knowledged by  each  of  the  corporators.  They  must  then  be  filed  and  recorded 
in  the  office  of  the  Secretary  of  Porto  Rico  and  payment  of  filing  fees  made  to 
that  official.    Thereupon  there  is  issued  to  the  corporation  a  certificate  of  due 

520 


DIGEST    OF    INCORPORATION    ACTS.  —  PORTO    RICO. 

incorporation  (sec.  37).    Corporate  existence  commences  as  soon  as  the  articles 
are  so  filed  (sec.  37). 

6.  Corporate  Indebtedness. — Corporate  indebtedness  must  never  ex- 
ceed the  paid  up  value  of  the  capital  stock  or  the  value  of  the  corporation's  prop- 
erty or  assets  (sec.  62). 

7.  Organization  Tax.  —  The  organization  tax  is  15  cents  on  each  one 
thousand  dollars  of  authorized  capital  stock.  This  is  further  regulated  by  the 
provision  that  the  minimum  fee  shall  be  S25  and  the  maximum  fee  S500  (sec. 
G3,  1,  Code,  sec.  59). 

8.  Filing  and  Recording  Fee.  —  For  recording  articles,  20  cents  per 
folio ;  for  making  certified  copies  thereof,  20  cents  per  folio ;  for  affixing  cer- 
tificate and  seal  thereto,  SI  ;  for  issuing  certificate  of  corporate  existence,  S3; 
for  filing  notice  of  removal  of  place  of  business,  or  other  certificates  of  amend- 
ment. 55  ;  for  filing  certificate  of  continuance  of  corporate  existence,  S3  (sec.  44, 
Pol.  Code,  sec.  59). 

9.  Commencing  Business.  —  Before  beginning  business  an  authenti- 
cated copy  of  the  articles  of  incorporation  must  be  filed  with  the  treasurer  of 
Porto  Rico,  together  with  a  statement  verified  by  the  oath  of  the  president,  and 
attested  by  a  majority  of  the  directors,  stating  the  name  of  the  corporation, 
its  domicile  and  the  kind  of  business  engaged  in,  branches  elsewhere,  and  the 
commercial  registry  in  which  the  articles  have  been  recorded  (Pol.  Code,  sec.  353). 
Another  requirement  is  that  business  cannot  be  commenced  until  the  amount 
of  capital  is  paid  in  which  is  designated  in  the  articles  of  incorporation  as  the 
amount  with  which  it  will  commence  business  (sec.  36). 

10.  Organization  Meeting.  —  Within  sixty  days  after  the  filing  of  the 
articles  of  incorporation  the  first  meeting  of  the  corporation  shall  be  called  by 
a  notice  subscribed  by  a  majority  of  the  incorporators,  designating  the  time, 
place,  and  purpose  of  the  meeting.  Such  notice  shall  be  served  upon  each  of 
the  subscribers  to  the  said  articles  of  incorporation  either  personally  or  by 
publication  of  the  said  notice  on  two  successive  weeks  in  a  newspaper  of  Porto 
Rico,  and  by  mailing  a  copy  of  such  notice  by  registered  mail,  addressed  to 
each  subscriber  at  the  post-office  address  mentioned  in  the  articles  of  incorpora- 
tion. This  notice,  however,  may  be  waived  in  writing  by  all  of  the  incorporators 
(sec.  38). 

11.  Meetings  of  Stockholders  and  Directors.  —  The  articles  of  incor- 
poration, or  the  by-laws  of  every  corporation,  may  determine  the  time  and 
manner  of  calling  and  conducting  all  stockholders'  meetings  (sec.  42).  In  all 
cases  where  it  is  not  otherwise  provided  by  law,  the  meetings  of  stockholders 
must  be  held  at  the  principal  office  of  the  corporation  in  Porto  Rico  (sec.  42  a). 
Voting  by  proxy  is  provided  for  (sees.  42,  48).  To  permit  of  cumulative  voting 
for  directors,  provision  therefor  must  be  made  in  the  articles  of  incorporation 
(sec.  49).  Xo  share  of  stock  can  be  voted  upon  which  has  been  transferred  on 
the  books  of  the  company  within  twenty  days  before  the  election  i.^-v.  49). 
Directors,  if  the  by-laws  or  articles  of  incorporation  so  provide,  may  hold  their 
meetings  and  have  an  office  outside  of  Porto  Rico  (sec.  41). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  The 
directors  must  not  be  less  than  three  in  number  (sec.  38).  They  must  all  be 
stockholders  (sec.  40).  At  lea  I  one  musl  be  a  resident  of  Porto  Rico  (sec.  38). 
They  may  be  classified,  provided  no  class  shall  hold  office  for  less  than  one 
year  nor  more  than  iive  years.  At  least  one-fifth  must  be  elected  cad!  year 
(sec.  40).     If  desired,  the  stockholders  may  delegate  to  the  directors  the  adop- 

521 


DIGEST    OF    INCORPORATION    ACTS.  —  PORTO    RICO. 

tion  of  by-laws  (sec.  39).    Unless  otherwise  provided  in  the  by-laws  they  may 
fill  vacancies  in  the  board  and  among  officers  (sec.  40). 

b.  Liabilities.  —  Directors  are  liable  for  contracting  debts  in  excess  of  the 
paid  up  capital  stock  or  the  value  of  the  corporation's  assets  (sec.  62).  They 
are  also  liable  for  making  any  dividend  except  from  surplus  profits,  or  for 
dividing  and  paying  capital  stock  in  any  manner  except  as  provided  by  law 
(sec.  46).  Directors  are  also  liable  for  making  false  statements  in  certificate 
of  public  notice  (sec.  61).  The  Code  provides  punishment  for  contempt,  for 
failure  on  the  part  of  the  directors  to  obey  the  order  of  the  court  directing  them 
to  bring  books  of  the  corporation  into  the  island  (sec.  41 ;  see  also  Penal  Code, 
chap.  11). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  only  to  the 
extent  of  the  unpaid  balance  due  on  their  stock  subscriptions  (sees.  42  b,  45). 
Stock  may  be  forfeited  for  non-payment  of  assessments  (sec.  42). 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  a  certificate 
signed  by  the  president  and  treasurer,  certifying  the  number  of  shares  owned 
by  him  (sec.  42).     The  par  value  may  be  any  amount  (sec.  36). 

15.  Preferred  Stock.  —  The  statute  does  not  in  express  terms  authorize 
the  issuance  of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Any  corporation  may  purchase  prop- 
erty necessary  for  its  business  or  shares  in  the  stock  of  any  other  corporation 
owning  property  necessary  for  its  business,  and  may  issue  shares  to  the  amount 
of  the  value  thereof  in  payment  of  the  same,  and  the  shares  so  issued  shall  be 
fully  paid  stock  and  not  liable  to  any  further  call.  In  the  absence  of  actual 
fraud  in  the  transaction,  the  judgment  of  the  directors  as  to  the  value  of  the 
property  purchased  shall  be  conclusive.  In  all  statements  and  reports  of  the 
corporation  published  or  filed,  its  shares  of  stock  shall  be  reported  according 
to  the  facts  (sec.  45). 

17.  Books.  —  The  stock  and  transfer  books  of  the  corporation  must  be 
kept  at  the  principal  office  of  the  corporation  in  Porto  Rico  (sec.  41).  If  the 
articles  so  provide,  all  other  books  may  be  kept  outside  of  Porto  Rico.  The 
stock  and  transfer  books  must  be  open  to  the  inspection  of  stockholders  during 
business  hours  (sec.  47). 

18.  Office  and  Agent.  —  All  domestic  corporations  must  maintain  a  prin- 
cipal office  in  the  island,  and  have  an  agent  in  charge  thereof  wherein  shall  be 
kept  the  stock  and  transfer  books  (sec.  41). 

19.  Reports.  —  Upon  the  payment  of  any  instalment  of  capital  stock 
made  subsequent  to  the  filing  of  articles  of  incorporation  and  of  each  instal- 
ment of  every  increase  thereof,  the  president,  secretary  or  treasurer,  shall  make 
a  certificate  stating  the  amount  so  paid,  and  whether  paid  in  cash  or  by  the  pur- 
chase of  property,  stating  also  the  total  amount  of  capital  stock  previously 
paid  and  reported,  which  certificate  shall  be  signed  and  sworn  to  by  them,  and 
the  same  witliin  ten  days  after  such  payment  be  filed  in  the  office  of  the  Secre- 
tary of  Porto  Rico.  If  any  of  said  officers  shall  neglect  or  refuse  to  perform 
the  duty  thus  imposed  upon  them  for  thirty  days,  at  the  written  request  so  to 
do  by  a  creditor  or  stockholder  of  any  corporation,  they  shall  be  jointly  and 
severally  liable  for  all  its  debts  contracted  before  the  filing  of  such  certificate 
(sec.  43). 

Every  domestic  corporation  and  every  foreign  corporation  doing  business  in 
the  island  of  Porto  Rico  shall  file  in  the  office  of  the  Secretary  of  Porto  Rico 
annually,  and  witliin  the  month  of  July,  a  report  authenticated  by  the  signature 
522 


DIGEST    OF    INCORPORATION    ACTS.  —  PORTO    RICO. 

of  the  president  and  one  other  officer,  or  by  any  two  directors  of  the  company, 
stating:  (1)  The  name  of  the  corporation;  (2)  The  location,  town  or  city,  street 
and  number,  if  number  there  be,  of  its  principal  office  in  the  island  of  Porto 
Rico,  and  if  a  foreign  corporation,  the  name  of  the  agent  upon  whom  process 
against  the  corporation  may  be  served;  (3)  The  object  or  objects  of  its  busi- 
ness; (4)  The  amount  of  its  authorized  capital  stock,  the  amount  actually 
issued,  and  outstanding,  and  the  amount  thereof  actually  paid  in.  a  statement 
of  its  existing  liabilities ;  (5)  The  names  and  post-office  addresses  of  all  of  the 
directors  and  officers  of  the  company,  and  the  time  when  the  term  of  office  of 
each  expires;  (6)  The  date  appointed  for  the  next  annual  meeting  of  stock- 
holders for  the  election  of  directors;  (7)  Whether  such  corporation  has  kept 
at  its  principal  office  in  the  island  of  Porto  Rico  a  transfer  book  in  which  trans- 
fers are  made,  and  a  stock  book  containing  the  names  and  addresses  of  all  the 
stockholders  and  the  number  of  shares  held  by  them  respectively,  open  at  all 
times  to  the  inspection  of  stockholders,  as  required  by  law.  Any  corporation 
failing  to  make  such  a  full  report  shall  forfeit  to  the  island  of  Porto  Rico  $200, 
to  be  recovered  with  costs  in  an  action  to  be  prosecuted  by  the  Attorney- 
General  (sec.  56). 

20.  Anti-Trust  Statute.  —  The  Territory  of  Porto  Rico  has  no  anti- 
trust statute. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  Legislative 
Assembly  of  Porto  Rico  has  power  to  dissolve  all  corporations  (sec.  34).  The 
corporation  may  also  be  dissolved  for  failure  to  bring  books  into  the  island 
when  ordered  so  to  do  by  the  court  (sec.  41). 

22.  Amendments.  —  Every  corporation  organized  under  this  code  may 
amend  its  articles  of  incorporation  by  changing  the  corporate  object  or  objects, 
changing  the  name,  increasing  or  decreasing  the  capital  stock,  changing  the 
par  value  and  number  of  shares  of  its  capital  stock,  changing  the  location  of 
its  principal  office  in  the  island  of  Porto  Rico,  extending  the  term  of  corporate 
existence  limited  in  the  articles  of  incorporation,  or  making  such  other  amend- 
ments, change,  or  alteration  as  may  be  required,  provided  that  said  certificate 
of  amendment,  change,  or  alteration  shall  contain  only  such  provisions  as  it 
will  be  lawful  and  proper  to  insert  in  original  articles  of  incorporation  made  at 
the  time  of  making  such  amendment,  and  provided  also  that  for  filing  such 
amendment  to  the  articles  of  incorporation  the  Secretary  of  Porto  Rico  shall 
charge  the  same  fees  as  for  filing  original  articles.  Such  amendments,  changes, 
or  alterations  shall  be  made  in  the  following  manner.  The  board  of  directors 
shall  pass  a  resolution  declaring  that  such  change  or  alteration  is  advisable  and 
calling  a  meeting  of  the  stockholders  to  take  action  thereon.  The  meeting  shall 
be  held  upon  such  notice  as  the  by-laws  provide,  and  in  the  absence  of  such 
notice  upon  thirty  days'  notice  given  personally  or  by  registered  mail.  If 
holders  of  two-thirds  in  amount  of  the  capital  stock  issued  shall  vote  in  favor 
of  such  amendment,  alteration,  or  change,  a  certificate  thereof  shall  be  signed 
by  the  president  and  secretary  under  the  corporate  seal,  and  acknowledged  by 
a  Notarial  Act,  and  such  certificate,  together  with  the  assent  given  in  person  or 
by  proxy  of  stockholders  representing  two-thirds  of  the  total  number  of  shares 
issued,  shall  be  filed  in  the  office  of  the  Secretary  of  Porto  Rico,  and  upon  the 
filing  of  the  same  the  articles  of  incorporation  shall  be  deemed  amended  accord- 
ingly (sec.  44). 

23.  Extension  of  Corporate  Existence.  —  This  may  be  effected  by 
amendment  to  the  articles  of  incorporation.     (See  ante,  6ec.  22.) 

523 


DIGEST    OF    INCORPORATION    ACTS.  —  PORTO    RICO. 

24.  Annual  License  Tax.  — There  is  no  annual  license  tax. 

25.  Dissolution.  —  The  corporation  may  be  dissolved  by  joint  action  of 
the  board  of  directors  and  stockholders.  A  two-thirds  vote  of  the  stockholders 
is  required  to  carry  into  effect  a  dissolution.  When  two-thirds  of  the  stock- 
holders shall  have  consented  to  dissolution  in  writing,  such  consent,  together 
with  the  names  and  residences  of  the  directors  and  officers,  certified  by  the 
president  or  secretary  and  treasurer,  shall  be  filed  in  the  office  of  the  Secretary 
of  Porto  Rico,  who,  on  being  satisfied  by  due  proof  that  the  requirements  of 
law  have  been  complied  with,  shall  cause  such  certificate  to  be  published  four 
wreeks  successively  in  a  newspaper  published  in  Porto  Rico.  Upon  affidavit 
being  made  that  such  certificate  has  been  published,  the  corporation  shall  be 
dissolved,  and  the  board  of  directors  shall  proceed  to  liquidate  the  business 
and  affairs  of  such  corporation.  Whenever  all  the  stockholders  shall  consent 
in  writing  to  a  dissolution  in  meeting,  the  notice  thereof  shall  be  inserted,  and 
the  Secretary  of  Porto  Rico  shall  forthwith  issue  a  certificate  of  dissolution  on 
filing  such  consent  in  his  office,  which  certificate  shall  be  published  as  above 
provided  (sees.  55-60  inclusive). 

26.  Foreign  Corporations.  —  All  foreign  corporations  before  commencing 
business  in  Porto  Rico  must  file  in  the  office  of  the  Secretary  of  Porto  Rico  a 
duly  authenticated  copy  of  its  charter  or  articles  of  incorporation  (sec.  65). 
A  statement  must  also  be  made,  verified  by  the  oath  of  its  president  and  sec- 
retary and  attested  by  a  majority  of  its  board  of  directors,  showing:  (1)  The 
name  of  such  corporation,  the  location  of  its  principal  place  or  places  of  busi- 
ness in  Porto  Rico,  if  it  have  any  place  or  places  of  business  or  principal  office 
within  Porto  Rico,  then  the  location  thereof  must  be  given;  (2)  The  amount 
of  its  capital  stock;  (3)  The  amount  of  its  capital  stock  actually  paid  in  in 
money ;  (4)  The  amount  of  its  capital  stock  paid  in  in  any  other  way,  and  in 
what ;  (5)  The  amount  of  the  assets  of  the  corporation  and  what  the  assets 
consist  of,  with  the  actual  cash  value  thereof;  (6)  The  liabilities  of  such  cor- 
poration, and  if  any  of  its  indebtedness  is  secured,  how  secured,  and  upon  what 
property  (sec.  65).  The  president  or  acting  head  of  the  corporation  and  the 
secretary  under  the  corporate  seal  must  also  file  a  certificate  consenting  to  be 
sued  in  the  courts  of  Porto  Rico  upon  all  causes  of  action  arising  against  it 
therein,  and  further  that  sendee  of  process  may  be  made  in  its  behalf  upon 
some  person  a  resident  of  Porto  Rico  and  whose  name  and  place  of  residence 
shall  be  designated  in  such  certificate  (sec.  66).  To  this  must  be  attached  the 
written  consent  of  the  person  so  designated  to  act  as  such  agent  (sec.  67). 
Foreign  corporations  must  make  the  same  annual  reports  as  are  required  of 
domestic  corporations  (sec.  69 ;  see  ante,  sec.  19).  In  order  to  procure  a  license 
all  foreign  corporations  must  pay  to  the  Treasurer  of  Porto  Rico  a  license  fee 
of  $25,  and  the  same  fee  must  be  paid  annually  on  or  before  the  1st  day  of  July 
of  each  year  following  (Political  Code,  sec.  353 ;  see  also  sec.  68,  Penal  Code, 
sec.  498).  They  must  also  keep  a  stock  and  transfer  book  at  the  principal  office 
in  the  island  (sec.  52).  They  must  also  make  the  same  tax  returns  as  are  re- 
quired of  domestic  corporations.     (See  Pol.  Code,  sees.  316-320.) 


524 


DIGEST    OF    INCORPORATION    ACTS.  —  RHODE    ISLAND. 


RHODE    ISLAND. 

(The  references  cited  below  are  to  General  Laws,  1896,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Rhode  Island  is  to  be  found  in  the  General 
Laws,  chaps.  176,  177,  180.  LTnder  this  act  corporations  may  be  formed  for  the 
transaction  of  any  ordinary  business,  except  railroad,  canal,  turnpike,  insurance, 
banking  and  trust  companies,  and  corporations  created  for  dealing  in  bonds, 
notes,  and  other  evidences  of  indebtedness  (see  also  Const.,  Art.  IX.). 

2.  Incorporators.  — Three  or  more  persons  of  lawful  age.  No  residential 
requirements  (chap.  176,  sec.  2). 

3.  Contents  of  the  Articles  of  Incorporation.  —  The  certificate  must  set 
forth: 

a.  Name.  —  Agreement  to  constitute  an  ordinary  business  corporation  under 
a  designated  name.  The  latter  must  be  one  that  must  not  be  mistaken  for  that 
of  a  copartnership,  and  one  not  in  use  by  an  existing  domestic  corporation. 

6.  Purposes.  —  Business  for  which  it  is  constituted.  State  officials  construe 
this  to  authorize  the  insertion  of  any  number  of  purposes  in  the  articles  not 
covered  by  special  acts. 

c.  Domiciliary  Office.  —  Town  or  city  in  which  it  is  to  be  located. 

d.  Capital  Stock.  —  Amount  of  capital  stock,  whether  common  or  preferred, 
and  how  much  of  it,  and  the  par  value  of  shares.  Capital  stock  may  be  any 
amount.  The  par  value  of  shares  may  be  any  amount.  If  preferred  stock  is 
desired,  the  articles  must  set  forth  the  advantages  thereof  over  common  stock 
(chap.  176,  sec.  2). 

e.  If  desired,  provision  may  be  made  that  the  corporation  shall  have  a  lien 
on  all  shares  for  indebtedness  of  the  shareholders  due  to  the  corporation.  The 
right  may  also  be  given  to  the  corporation  in  case  of  sale  of  stock  by  any  stock- 
holder to  purchase  said  stock  at  the  lowest  price  at  which  he  is  willing  to  sell 
before  the  same  shall  be  sold  by  him  to  any  other  party  (sec.  9)  (Laws  of 
1906,  chap.  1326). 

The  duration  of  a  corporation  is  perpetual  unless  it  shall  expire  by  its  own 
limitation  or  shall  be  legally  annulled  (G.  C.  L.,  sees.  1,  9,  chap.  177). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers,  the  following  additional  powers  are  conferred :  The  right  to 
authorize  voting  by  proxy ;  the  right  to  issue  preferred  stock ;  the  creation  of 
a  hen  upon  shares  for  assessments  or  indebtedness  due  the  corporation ;  the 
right  to  forfeit  such  stock  for  non-payment  of  assessments  (chap.  177,  sees.  1, 
3,  9).  Corporations  may  be  dissolved  for  certain  causes  enumerated  in  the 
statute  upon  the  petition  of  either  stockholders  or  creditors  (see  Laws  of  1909, 
chap.  424). 

5.  Procuring  the  Charter.  —  The  articles  (if  incorporation  must  be  signed 
by  each  of  the  corporators  (setting  forth  the  place  of  residence  of  each)  and 
must  be  acknowledged  in  the  same  manner  in  which  deeds  of  real  estate  are 
required  to  be  acknowledged  within  the  State.  The  agreemenl  must  then  be 
filed  in  the  office  of  the  Secretary  of  State,  together  with  the  certificate  of  the 
general  Treasurer,  that  the  organization  tax  lias  been  paid  (chap.  17(i,  sec 

4).    Upon  payment  of  $1  the  Secretary  of  State  issues  a  certificate  of  incor- 

525 


DIGEST    OF   INCORPORATION   ACTS.  —  RHODE   ISLAND. 

poration  in  the  form  prescribed  by  statute  (chap.  176,  sec.  4).  As  soon  as  a 
treasurer  is  elected,  his  name  and  address  must  be  filed  with  the  Secretary 
of  State  (chap.  176,  sec.  16).  If  the  treasurer  be  a  non-resident,  then  the  cor- 
poration must  appoint  an  agent  residing  within  the  State  with  authority  to 
accept  service  of  process  in  behalf  of  the  corporation. 

6.  Corporate  Indebtedness.  —  Corporate  indebtedness  in  manufactur- 
ing corporations  cannot  be  created  beyond  the  amount  of  the  actual  capital  paid 
in  without  subjecting  the  directors  to  personal  liability  therefor  (chap.  180, 
sec.  15). 

7.  Organization  Tax.  —  On  capital  stock  less  than  $100,000,  the  tax  is 
$100 ;  on  capitalization  of  $100,000  or  more,  the  tax  is  one-tenth  of  one  per  cent 
on  authorized  capital  stock.    The  tax  is  payable  to  .the  General  Treasurer. 

8.  Filing  and  Recording  Fees.  — The  payment  of  the  organization  tax 
includes  the  filing  and  recording  fees  in  the  office  of  the  Secretary  of  State.  The 
Secretary  of  State  charges  10  cents  per  folio  of  100  words  for  making  copy  of 
certificate  of  incorporation,  and  $1  for  affixing  certificate  thereto.  The  fee  for 
issuing  certificate  of  incorporation  is  $1,  for  fifing  appointment  of  agent  in 
behalf  of  a  foreign  corporation,  $1.50. 

9.  Commencing  Business.  —  Business  may  be  commenced  as  soon  as  the 
articles  are  filed  as  prescribed  by  law.  Within  thirty  days  after  organization 
there  must  be  filed  with  the  Secretary  of  State  a  certificate  under  oath  of  the 
treasurer,  or  other  officer  authorized  to  make  same,  setting  forth  the  name  of 
the  corporation,  date  of  organization,  amount  of  capital  stock  actually  paid  in 
upon  organization,  the  town  in  which  such  corporation  is  located,  and  the  name 
and  post-office  address  of  its  treasurer  (chap.  177,  sec.  24).  Corporation  must 
be  organized  within  two  years  after  incorporation  (chap.  177,  sec.  23). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  State,  in  the  absence  of  any  statute  providing  otherwise.  The  meet- 
ing of  the  incorporators  to  form  the  corporation  shall  be  called  by  a  notice 
signed  by  one  or  more  of  the  corporators,  stating  the  time,  place,  and  purpose  of 
the  meeting,  and  copy  of  which  shall  be  mailed  at  least  five  days  before  the 
date  appointed  for  the  meeting  to  each  corporator,  addressed  to  his  usual  place 
of  business  or  residence,  which  notice  may  be  given  as  soon  as  said  agreement 
and  the  certificate  of  the  general  treasurer  have  been  filed  with  the  Secretary 
of  State,  provided,  however,  that  such  first  meeting  may  be  held  by  agreement 
in  writing  of  all  the  corporators  without  such  notice;  said  first  meeting  to  be 
held  in  any  event  subsequent  to  the  issuing  of  said  certificate  by  the  Secretary 
of  State  (chap.  176,  sec.  6). 

The  first  meeting  of  the  corporation,  unless  notice  be  waived  in  writing  by 
all  of  the  corporators,  must  be  called  by  a  notice  signed  by  one  or  more  of  the 
corporators  setting  the  time,  place,  and  object  of  the  meeting,  and  such  notice 
shall,  seven  days  before  such  meeting,  be  delivered  to  each  member,  or  published 
in  some  newspaper  of  the  county  where  such  corporation  may  be  established, 
or  if  there  be  no  newspaper  in  the  county,  then  in  some  newspaper  of  an  ad- 
joining county  (chap.  177,  sec.  4.  As  to  contents  of  by-laws,  see  chap.  177, 
sec.  3). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  within  the  State.  Voting  by  proxy  at  all  stockholders'  meet- 
ings is  permitted  (chap.  177,  sec.  3).  Directors'  meetings  may  be  held  with- 
out the  State  if  the  by-laws  so  provide  (chap.  177,  sec.  3). 

12.  Directors' Qualifications  and  Liabilities,    a.  Qualifications. — The 

526 


DIGEST    OF    INCORPORATION    ACTS.  —  RHODE    ISLAND. 

number  of  directors  is  not  limited;  nor  are  there  any  residential  requirements. 
The  practice  in  Rhode  Island  is  to  require  that  all  directors  shall  hold  at  least 
one  share  of  stock  in  order  to  qualify  them  to  act. 

b.  Liabilities.  —  Directors  of  manufacturing  corporations  are  liable  to  the 
creditors  for  failure  to  file  a  certificate  executed  by  themselves,  together  with 
the  president,  treasurer,  and  clerk  of  the  company,  within  ten  days  after  the 
payment  of  the  last  instalment  of  the  capital  stock  fixed  and  limited  by  the 
charter,  or  by  vote  of  the  company,  stating  the  amount  of  the  capital  so  fixed 
and  paid  in.  The  certificate  must  then  be  recorded  within  the  said  ten  days 
in  the  office  of  the  town  clerk  of  the  town  wherein  the  manufactory  shall  be 
established.  They  are  also  liable  for  illegal  declaration  of  dividends.  They 
are  also  liable  under  certain  conditions  (see  chap.  180,  sees,  15,  16)  to  the 
extent  of  the  debts  created  by  them  in  excess  of  the  amount  of  stock  actually 
paid  in.  Directors  are  also  liable  for  making  false  certificates,  knowing  them 
to  be  false.  They  are  also  liable  for  making  loans  to  stockholders  to  the  extent 
of  such  loan  and  interest  thereon  (chap.  ISO,  sees,  2,  3,  6,  7,  15,  16,  20,  21). 
Officers  and  directors  are  also  liable  for  wilfully  making  any  false  statement  in 
the  tax  statement  required  by  the  Tax  Act  of  1912  (see  Laws  of  1912,  chap.  769, 
sec.  17). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent  of 
their  unpaid  stock  subscriptions  (Laws  of  1901,  chap.  839).  The  members  of 
every  incorporated  manufacturing  company  shall  be  jointly  and  severally  liable 
for  all  debts  and  contracts  made  and  entered  into  by  such  company  except  as 
hereinbefore  provided,  until  the  whole  amount  of  the  capital  stock  fixed  and 
limited  by  the  charter  of  such  company,  or  by  vote  of  the  company,  in  pur- 
suance of  the  charter,  or  of  law,  shall  have  been  paid  in,  and  a  certificate  thereof 
shall  have  been  made  and  recorded  in  a  book  kept  for  that  purpose  in  the  office 
of  the  town  clerk  of  the  town  wherein  the  manufactory  is  established  and  no 
longer,  except  as  hereinafter  provided  (chap.  180,  sec.  1). 

The  president  and  directors,  with  the  treasurer  and  clerk  of  such  company, 
within  ten  days  after  the  payment  of  the  last  instalment  of  the  capital  stock 
fixed  and  limited  by  the  charter  or  by  vote  of  the  company,  in  pursuance  of 
the  charter  or  of  law,  shall  make  a  certificate,  stating  the  amount  of  the  capital 
so  fixed  and  paid  in,  which  certificate  shall  be  signed  and  sworn  to  by  the 
president,  treasurer,  and  clerk  and  by  a  majority  of  the  directors,  and  they 
shall  within  said  ten  days  lodge  the  same  to  be  recorded  in  the  book  kept  as 
aforesaid  in  the  office  of  the  town  clerk  of  the  town  wherein  the  manufactory 
shall  be  established.  In  case  of  increase  of  the  capital  stock  of  said  companies, 
like  proceedings  shall  be  had  as  to  the  amount  added  and  paid  in  (chap.  180, 
sec.  2). 

The  liability  provided  by  section  1  of  chapter  ISO  is  specifically  limited  to 
the  shares  of  such  stockholders  in  such  corporation  paid  up  and  the  par  value 
thereof. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  stock  certifi- 
cate showing  the  number  of  shares  held  by  him,  signed  by  such  officers  as  the 
bydaws  may  prescribe. 

15.  Preferred  Stock.  —  The  issue  of  preferred  stock  is  expressly  authorized 
by  law,  and  provision  therefor  must  be  made  in  the  articles  of  incorporation 
(chap.  176,  sees.  2,  7). 

16.  Payment  of  Capital  Stock.  —  Capital  stock  may  be  paid  for  either  in 
money  or  in  property.     This  no!  by  virtue  of  any  specific  statute,  but  under 

527 


DIGEST    OF    INCORPORATION    ACTS.  —  RHODE    ISLAND. 

well-recognized  principles  of  corporation  law  (see  in  this  connection,  chap.  180, 
sees.  8,  9,  10). 

17.  Books.  —  Records  of  transfers  of  stock  of  domestic  corporations  shall 
be  made  and  kept  within  the  State,  and  the  officer  of  every  such  corporation 
whose  duty  it  may  be  to  record  the  transfers  of  shares  in  the  capital  stock 
thereof,  shall  at  the  time  of  his  election  or  appointment  be  a  resident  of  the 
State  (chap.  177,  sec.  19). 

18.  Office  and  Agent.  —  All  corporations  must  have  a  place  of  business 
within  the  State,  and  shall  have  a  clerk,  treasurer,  or  other  agent,  who  shall 
reside  therein  (chap.  177,  sec.  21).  The  officer  whose  duty  it  is  to  record  stock 
transfers  must  be  a  resident  of  the  State  (chap.  177,  sec.  1).  If  the  treasurer 
of  a  domestic  corporation  does  not  reside  within  the  State,  the  corporation 
must  forthwith  appoint  some  competent  person  resident  in  the  State  as  its 
attorney  upon  whom  service  of  process  upon  the  corporation  may  be  made.  A 
copy  of  the  power  of  attorney  designating  such  agent  duly  certified  and  au- 
thenticated must  be  filed  with  the  Secretary  of  State  (chap.  176,  sec.  16). 

19.  Reports. — -Annual  reports  are  required  to  be  filed  with  the  Board  of 
Tax  Commissioners  on  or  before  the  first  day  of  March  of  each  year  (as  to  con- 
tents of  report,  see  sec.  25,  Annual  Franchise  Tax).  By  section  39,  chapter  557 
of  the  Laws  of  1910,  it  is  provided  as  follows: 

"  No  stock,  shares,  or  instalment  shares  in  any  investment  company  or  in  any 
real  estate,  mining,  or  co-operative  corporation,  society,  association,  or  organi- 
zation other  than  building  and  loan  associations,  or  notes  or  bonds  or  other  securi- 
ties thereof,  shall  be  sold  or  offered  for  sale  in  this  State  by  any  such  company, 
corporation,  society,  organization,  or  association,  or  by  any  agent  or  broker 
representing  such  company,  corporation,  society,  organization,  or  association 
until  such  company,  corporation,  society,  organization,  or  association  has  filed 
in  the  office  of  the  Secretary  of  State  a  statement  and  certificate  showing  its 
financial  condition,  the  location  of  its  property  or  properties  with  plans  of  the 
same,  the  amount  of  work  done  thereon,  the  amount  of  cash  expended  for  im- 
provements thereon,  and  the  condition  of  the  plant  and  machinery,  if  any,  con- 
nected therewith.  Such  statement  and  certificate  shall  be  subscribed  and 
sworn  to  by  the  president,  treasurer,  and  secretary  of  such  company,  corporation, 
society,  organization,  or  association.  A  like  statement  and  certificate  shall  be 
filed  annually  thereafter  on  or  before  the  1st  day  of  July  of  each  year.  For 
the  filing  of  such  statement  or  certificate  a  fee  of  $10  shall  be  paid  to  the 
Secretary  of  State,  and  such  statements  and  certificates  shall  be  recorded  by  the 
Secretary  of  State  in  a  book  kept  for  that  purpose  and  open  for  public 
inspection. 

"Any  company,  corporation,  society,  organization,  or  association,  or  any 
agent  or  broker  representing  such  company,  corporation,  society,  organization, 
or  association,  selling  or  offering  for  sale  any  stock,  shares,  or  instalment  shares, 
or  any  notes,  bonds,  or  other  securities  in  any  such  company,  corporation,  society, 
organization,  or  association  which  has  failed  to  file  a  statement  or  certificate  as 
herein  provided,  shall  be  fined  not  exceeding  §5500  for  each  offence  (Laws  of 
1910,  chap.  557,  sec.  40)." 

"The  provisions  of  this  act  shall  not  apply  to  any  corporation  incorporated 
under  the  laws  of  this  State  where  at  least  ninety  per  centum  of  the  property 
of  such  corporation  is  located  in  this  State  (Laws  of  1910,  chap.  557,  sec.  41)." 

On  the  request  of  the  governor  or  Secretary  of  State,  the  bank  commissioner 
shall  privately  examine  the  books  and  accounts  of  any  such  company,  corpora- 

528 


DIGEST   OF    INCORPORATION   ACTS.  —  RHODE    ISLAND. 

tion,  society,  organization,  or  association,  and  if  in  his  opinion  such  company, 
corporation,  society,  organization,  or  association  is  insolvent,  or  its  condition  is 
such  as  to  render  a  continuance  of  the  business  hazardous  to  the  public,  said 
bank  commissioner  may  petition  the  Superior  Court  for  the  counties  of  Provi- 
dence and  Bristol  for  the  appointment  of  a  receiver  of  the  estate  and  effects  in 
tliis  State  of  such  company,  corporation,  society,  organization,  or  association 
and  for  an  injunction  to  restrain  such  company,  corporation,  society,  organiza- 
tion, or  association,  its  officers  or  agents,  from  doing  business  in  this  State,  and 
from  selling  or  offering  for  sale  in  this  State  its  stock,  shares,  notes,  bonds,  or 
other  securities,  and  if  incorporated  under  the  laws  of  this  State,  for  a  dissolution, 
and  said  court  shall  have  jurisdiction  in  equity  of  such  petition.  Such  receiver 
shall  have  the  rights  and  powers  given  to  receivers  under  the  provisions  of 
sections  28,  29,  and  30  of  this  chapter,  and  all  acts  in  amendment  thereof  or  in 
addition  thereto.  The  actual  expenses  of  such  examination  of  the  books  and 
accounts  of  such  company,  corporation,  society,  organization,  or  association 
shall  be  paid  by  such  company,  corporation,  society,  organization,  or  associa- 
tion, if  found  by  the  bank  commissioner  to  be  insolvent  or  the  continuance  of 
its  business  to  be  hazardous  to  the  public,  or  of  failing  to  file  any  report  as 
required  by  law'"  (Laws  of  1910,  chap.  557,  sec.  42). 

"  If  any  company,  corporation,  society,  organization,  or  association  refuses 
to  allow  an  examination  of  its  books  and  accounts  by  the  bank  commissioner, 
he  shall  apply  to  the  Superior  Court  for  the  counties  of  Providence  and  Bristol 
alleging  such  fact,  and  said  court,  on  proof  thereof,  shall  enjoin  such  company, 
corporation,  society,  organization,  or  association  from  doing  business  within 
this  State,  and  from  selling  or  offering  for  sale  in  this  State  its  stock,  shares, 
notes,  bonds,  or  other  securities,  and  if  such  corporation  is  incorporated  under 
the  laws  of  this  State,  the  court  may  order  a  dissolution  of  said  corporation  and 
may  appoint  a  receiver,  who  shall  have  the  rights  and  powers  above  referred 
to"  (Laws  of  1910,  chap.  557,  sec.  42). 

20.  Anti-trust  Statutes.  —  There  is  no  anti-trust  statute  in  force  in 
Rhode  Island. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  — The  charter  may 
be  forfeited  for  failure  to  organize  within  two  years  after  filing  articles  of  agree- 
ment (chap.  177,  sec.  23). 

Any  corporation  having  a  non-resident  treasurer  and  failing  for  the  period 
of  one  year  to  appoint  a  resident  agent  within  the  State  may  be  dissolved  upon 
application  by  any  creditor  or  by  any  other  party  in  interest  to  the  appellate 
division  of  the  Supreme  Court  (chap.  176,  sec.  16). 

22.  Amendments.  —  Whenever  a  corporation  is  created  as  provided  by 
law,  and  more  capital  than  the  amount  prescribed  in  the  articles  of  agreement 
shall  be  necessary  or  desirable,  such  articles  may  be  amended  in  pursuance  of  a 
vote  therefor  representing  in  amount  three-quarters  of  the  whole  capital  stock 
passed  at  a  meeting  of  the  corporation  duly  called  for  that  purpose,  by  the 
filing  in  the  office  of  the  Secretary  of  State  of  a  certificate  of  such  vote  duly 
attested  by  the  president  and  secretary  of  said  corporation,  together  with  the 
certificate  of  the  general  treasurer  thai  said  corporation  has,  with  previous  pay- 
ments to  the  general  treasurer,  paid  into  the  treasury,  for  the  use  of  the  State,  a 
sum  equal  to  one-tenth  of  one  per  centum  of  its  capital  stock  when  .so  increased. 
Such   vote  shall  set    forth  the  amount,  the  par  value,  and  kinds,  of  additional 

stock  and  the  advantages  of  the  preferred,  if  any,  over  the  common  stock.  Such 
agreement  may  be  amended  in  any  other  particular,  excepting  as  provided  in 

34  529 


DIGEST   OF   INCORPORATION   ACTS. — RHODE    ISLAND. 

the  following  section,  by  like  vote  of  the  corporation,  and  the  filing  in  the  office 
of  the  Secretary  of  State  of  a  copy  of  such  vote  duly  attested  by  the  president 
and  secretary  of  said  corporation  (chap.  176,  sec.  7). 

Whenever  a  corporation  is  created  as  provided  by  law  and  it  is  deemed 
necessary  or  desirable  to  decrease  the  amount  of  capital  stock  of  the  corpora- 
tion, prescribed  in  the  articles  of  agreement  or  any  amendment  thereof,  said 
articles  may  be  so  amended  in  pursuance  of  a  vote  therefor  representing  in 
amount  three  quarters  of  the  whole  capital  stock  passed  at  a  meeting  of  the 
corporation  duly  called,  when  a  copy  of  such  vote  duly  attested  by  the  president 
and  secretary  of  said  corporation,  has  been  duly  filed  in  the  office  of  the  Secre- 
tary of  State ;  and  the  secretary  of  such  corporation  shall  immediately  notify 
in  writing  every  stockholder  of  record  of  such  decrease,  and  each  stockholder 
shall  forthwith  present  his  certificate  or  certificates  to  be  exchanged  for  others, 
or  to  have  endorsed  thereon  proper  evidences  of  the  decrease  of  the  par  value 
thereof,  as  the  case  may  be  (chap.  176,  sec.  8). 

The  articles  of  incorporation  may  be  amended  so  as  to  provide  that  the 
corporation  shall  have  a  lien  upon  all  shares  for  assessments  or  other  indebted- 
ness due  from  shareholders,  or  they  may  amend  so  as  to  give  the  corporation  the 
right  in  case  of  sale  of  stock  by  any  stockholder  to  purchase  such  stock  at  the 
lowest  price  at  which  he  is  willing  to  sell,  before  the  same  shall  be  sold  by  him 
to  any  other  party,  by  compliance  with  the  following  provisions: 

The  amendment  must  be  carried  by  a  vote  of  the  stockholders  representing 
the  whole  capital  stock,  passed  at  a  meeting  of  the  corporation  duly  called  for 
that  purpose,  and  followed  by  the  filing  in  the  office  of  the  Secretary  of  State  of 
a  certificate  of  such  vote,  duly  attested  by  the  president  and  secretary  of  the 
corporation  (chap.  176,  sec.  9,  as' amended  by  Laws  of  1906,  chap.  1326). 

23.  Extension  of  Corporate  Existence.  —  There  is  no  statutory  pro- 
vision for  the  extension  of  corporate  existence. 

24.  Dissolution.  —  Corporate  powers  cease  if  organization  is  not  com- 
pleted within  two  years,  and  court  of  common  pleas  may  dissolve  any  company 
for  non-user.  May  also  dissolve  voluntarily  by  resolution  of  stockholders  rep- 
resenting a  majority  of  capital  stock  (chap.  177,  sec.  27,  as  amended  by  Laws  of 
1909,  chap.  424).  Whenever  any  corporation  incorporated  under  the  laws  of 
this  State,  except  a  bank,  savings  bank  or  trust  company  incorporated  under 
the  laws  of  this  State,  is  insolvent  or  whenever  by  reason  of  fraud,  negligence, 
misconduct  or  continued  absence  from  the  State  of  the  executive  officers  of  any 
such  corporation,  or  whenever  by  reason  of  the  neglect,  refusal,  or  omission  by 
the  stockholders  of  any  such  corporation  for  an  unreasonable  time  to  hold 
meetings  or  attend  to  its  concerns,  the  estate  and  effects  of  such  corporation  are 
being  misapplied  or  are  in  danger  of  being  wasted  or  lost,  or  whenever  any  such 
corporation  has  done  or  omitted  to  do  any  act,  which  act  or  omission  is  ground 
for  the  forfeiture  of  its  charter,  or  whenever  a  majority  in  interest  of  the  members 
of  such  corporation  having  a  capital  stock,  or  a  majority  of  the  members  of 
such  corporation  having  no  capital  stock,  shall  have  voted  to  dissolve  said  cor- 
poration, and  to  wind  up  its  affairs,  the  Superior  Court  may,  upon  the  petition 
of  any  stockholder  or  creditor  of  such  corporation,  and  upon  such  reasonable 
notice  as  the  court  may  prescribe,  decree  a  dissolution  of  such  corporation  and 
appoint  a  receiver  of  its  estate  and  effects,  or  may  decree  such  dissolution 
without  appointing  a  receiver,  or  may  appoint  such  receiver  without  decreeing 
a  dissolution  (Laws  of  1912,  chap.  780,  sec.  27). 

25.  Annual    License    Fee.  —  All    business    corporations,    except    public 

530 


DIGEST    OF    INCORPORATION   ACTS. RHODE    ISLAND. 

utility  and  those  organized  for  banking  purposes,  etc.,  in  addition  to  a  tax  on 
their  real  estate  and  tangible  personal  property  locally  or  otherwise  assessed, 
must  pay  an  annual  tax  to  the  State  on  the  value  of  that  part  of  its  tangible 
property,  called  its  corporate  excess,  and  must  on  or  before  the  first  day  of  March 
in  each  year,  return  to  the  Board  of  Tax  Commissioners,  under  the  oath  of  its 
treasurer  or  other  duly  authorized  agents  or  officers,  as  of  December  31st  next 
preceding,  unless  otherwise  provided: 

(1)  The  name  and  location  within  this  State  of  such  corporation;  and  if  it 
have  no  location  within  this  State,  where  such  corporation  is  located. 

(2)  The  amount  of  its  capital  stock  authorized  and  the  amount  outstanding, 
with  the  number  of  shares  of  each;  and  if  there  are  different  classes  of  stock, 
the  amounts  and  numbers  of  shares  of  each  class. 

(3)  The  average  fair  cash  value  of  each  class  of  its  capital  stock  for  three 
years  next  prior  to  the  first  day  of  the  next  preceding  January,  or  for  such 
lesser  time  as  such  corporation  has  been  carrying  on  business;  Provided,  that 
until  the  year  1915  such  value  shall  be  returned  for  one  year  prior  to  the  first 
day  of  the  next  preceding  January.  A  majority  of  the  Board  of  Directors,  or  the 
president,  chairman,  treasurer,  assistant  treasurer,  or  secretary,  or  any  duly 
authorized  agent  or  officer  of  such  corporation,  shall  estimate  and  appraise  the 
capital  stock  at  its  average  fair  cash  value  for  such  time.  Such  estimate  shall 
be  signed  by  the  directors  or  officer  or  agent  making  it,  and  shall  be  attached  to 
the  corporate  return. 

(4)  The  amount  and  value  of  its  bonded  indebtedness;  the  amount  and  value 
of  its  indebtedness  evidenced  by  debentures;  and  also  the  amount  and  value  of 
its  other  indebtedness  incurred  for  the  acquisition  of  real  estate,  or  of  tangible 
personal  property;  and  if  at  any  time  the  Boajd  of  Tax  Commissioners  believes 
that  any  other  indebtedness  is  not  bona  fide,  but  is  used  as  a  cover  for  distribution 
of  profits,  the  Board  may  require  the  return  of  the  several  classes  of  indebted- 
ness. 

(5)  The  value  in  each  city  or  town,  as  assessed  for  taxation  at  the  next 
prior  assessment,  of  its  real  estate  and  tangible  personal  property  located  in 
this  State,  including  the  value,  as  fixed  by  the  assessors  of  taxes  in  any  city  or 
town  or  any  property  exempt  under  any  local  exemption. 

(6)  The  location  and  the  fair  cash  value  of  the  real  estate  and  tangible  per- 
sonal property,  if  any,  used  in  its  business,  and  located  outside  this  State,  to 
the  best  knowledge  and  belief  of  the  person  making  the  return.  And  the  return 
shall  show  whether  the  valuation  returned  is  the  value  assessed  of  taxes  in  other 
jurisdiction  or  is  an  estimated  value. 

(7)  A  list  of  the  securities  and  other  property  and  the  value  thereof  owned 
by  such  corporation  as  its  own  property  and  not  used  in  its  business,  or  which 
is  exempt  from  taxation  by  the  laws  of  the  United  States  or  of  this  State,  and 
any  other  property  which  such  corporation  claims  to  be  exempt  from  taxation 
in  this  State  or  not  taxable  by  law  in  this  State,  with  the  reason  for  any  such 
exemption  or  non-taxation  (Laws  of  1912,  chap.  7G1),  sec.  '.)). 

The  Board  of  Tax  Commissioners  shall  annually  fix  from  the  return  afore- 
said, or  from  other  information,  the  average  fair  cash  value  of  each  class  of  the 
capital  stock  of  each  corporation,  for  the  said  three  years  or  lesser  time  tin- 
corporation  has  carried  on  business  (except   as  otherwise  provided  in  this  act), 

and  notify  each  corporation  of  such  value  on  or  before  the  first  day  of  May  m 
each  year,  and  if  any  corporation  is  not  satisfied  with  the  valuation  so  fixed, 
said  Board  upon  being  so  notified,  on  or  before  the  tenth  day  of  May,  shall  fix  an 

531 


DIGEST    OF   INCORPORATION   ACTS. RHODE    ISLAND. 

early  day  at  its  office  when  said  corporation  can  be  heard,  to  show  cause  why 
said  valuation  should  be  changed,  and  after  such  hearing  said  Board  shall  fix 
such  valuation  as  is  proper  (Laws  of  1912,  chap.  769,  as  amended  by  chap. 
784,  sec.  2). 

Each  of  the  corporations  required  to  make  the  return  aforesaid  shall  be 
taxed  upon  the  value  of  its  corporate  excess,  which  shall  be  determined  by  the 
Board  of  Tax  Commissioners,  for  the  purposes  of  assessment  and  taxation  as 
follows: 

(1)  To  the  value  of  the  total  number  of  its  shares  outstanding,  determined  as 
aforesaid,  there  shall  be  added  as  part  of  the  measure  of  value  of  the  property 
of  such  corporation:  (a)  the  total  value  of  its  outstanding  bonded  indebted- 
ness, if  any;  (b)  the  total  value  of  its  outstanding  indebtedness  evidenced  by 
debentures,  if  any;  (c)  the  total  value  of  its  other  indebtedness,  if  any,  in- 
curred for  the  acquisition  of  real  estate  or  of  tangible  personal  property,  and 
such  other  of  its  indebtedness  as  such  corporation  shall  return;  (d)  and  such 
other  of  its  indebtedness,  if  any,  as  is  a  cover  for  a  division  of  its  profits  (Laws 
of  1912,  chap.  769,  sec.  11,  sub  sec.  1). 

(2)  In  case  of  corporations  also  carrying  on  business  outside  of  this  State, 
a  portion  of  the  value  ascertained  under  the  prior  clause  shall  be  apportioned 
to  this  State  as  follows:  "  In  the  case  of  corporations  deriving  their  profits 
principally  from  ownership  sale,  or  rental  of  real  estate,  and  in  the  case  of  man- 
ufacturing corporations,  and  such  other  corporations  as  derive  their  profits 
principally  from  the  sale  or  use  of  tangible  personal  property,  such  a  proportion 
of  the  fair  cash  value  of  their  real  estate  and  tangible  personal  property  in  this 
State  on  December  thirty-first  next  preceding  bears  to  the  fair  cash  value  of 
their  entire  real  estate  and  tangible  personal  property  then  used  in  their  business, 
without  any  deduction  on  account  of  any  mortgage  or  incumbrance  thereon; 
in  the  case  of  corporations  deriving  their  profits  principally  from  the  holding  or 
sale  of  intangible  property,  such  a  proportion  as  their  gross  receipts  for  the  year 
ending  on  December  thirty-first  next  preceding  in  this  State  bears  to  their  total 
gross  receipts  for  such  year,  both  within  and  without  this  State;  and  in  any  case 
to  which  these  proportions  are  not  equitably  applicable,  in  such  proportion  as  is 
equitable.  And  said  Board  shall  have  power  to  require  from  time  to  time,  such 
reports,  sworn  to  as  hereinbefore  provided  as  will  give  said  Board  the  informa- 
tion necessary  to  make  said  apportionment  "  (Laws  of  1912,  chap.  769,  sec.  11, 
sub  sec.  2,  as  amended  by  Laws  of  1912,  chap.  784,  sec.  3). 

(3)  From  the  total  value  ascertained  under  the  first  clause  of  this  section; 
or,  in  the  case  of  corporations  also  carrying  on  business  outside  of  this  State, 
from  the  portion  of  the  value  apportioned  to  this  State  under  the  next  preced- 
ing clause,  there  shall  be  deducted  the  assessed  value  of  their  real  estate  and 
tangible  personal  property  located  in  this  State  as  last  assessed  for  local  or 
State  taxation,  including  in  the  deduction  the  value  of  any  such  property  ex- 
empt from  taxation  by  local  authority  (Laws  of  1912,  chap.  769,  sec.  11,  sub 
sec.  3). 

(4)  Said  Board  shall  also  make  such  allowance  for  such  property  as  is  ex- 
empt from  taxation,  or  is  not  taxable  in  this  State,  by  deducting  it  from  the  entire 
value  ascertained  under  the  first  clause  of  this  section,  or  from  the  portion  as- 
signed to  this  State,  or  from  the  portion  assigned  to  other  jurisdictions  as  the 
circumstances  make  equitable  (Laws  of  1912,  chap.  769,  sec.  11,  sub  sec.  4). 

(5)  The  remainder  shall  constitute  the  value  of  the  "  corporate  excess  " 
for  the  taxation  of  said  corporation  (Laws  of  1912,  chap.  769,  sec.  11). 

532 


DIGEST    OF    INCORPORATION    ACTS. RHODE    ISLAND. 

Said  Board,  on  the  first  business  day  of  Juno  in  each  year,  shall  make  up  a 
list  of  all  corporations  subject  to  tax  upon  their  corporate  excess,  with  the 
amount  of  the  corporate  excess  of  each,  and  shall  assess  a  tax  upon  each  such 
corporation  at  the  rate  of  forty  cents  for  each  one  hundred  dollars  of  the  amount 
of  its  corporate  excess,  and  enter  the  amount  of  the  tax  against  t  lie  name  of  each 
such  corporation.  Said  Board  shall  certify  to  the  correctness  of  such  lisl  ami 
deliver  a  duly  attested  copy  thereof  as  a  public  record  to  the  general  treasurer, 
who  shall  receive  and  collect  the  taxes  so  assessed  in  the  same  manner  and  with 
the  same  powers  as  are  prescribed  for,  and  given  to,  collectors  of  taxes  by  chap- 
ter 60  of  the  General  Laws,  and  by  any  acts  in  amendment  thereof  or  in  addition 
thereto.  Said  Board  shall  also  forthwith  mail  a  notice  of  the  amount  of  the 
tax  to  each  such  corporation,  but  the  failure  to  receive  such  notice  shall  not 
excuse  the  non-payment  of  said  tax.  The  tax  assessed  as  aforesaid  shall  be 
payable  on  the  first  day  of  July  next  after  its  assessment  as  aforesaid,  and  if 
not  paid  by  the  fifteenth  day  of  such  July  shall  bear  interest  from  the  first  day 
of  such  July  at  the  rate  of  eight  per  centum  per  annum  until  paid,  if  such  pay- 
ment is  made  before  the  commencement  of  legal  proceedings  for  the  recovery 
of  the  tax,  and  at  the  rate  of  ten  per  centum  per  annum  if  made  after  the  com- 
mencement of  such  proceedings.  Such  tax,  if  unpaid,  shall  constitute  a  lien 
upon  the  real  estate  of  such  corporation  within  this  State  for  the  space  of  two 
years  after  the  assessment  thereof,  and  if  such  real  estate  be  not  aliened,  then 
until  the  same  is  collected  (Laws  of  1912,  chap.  769,  sec.  11). 

26.  Foreign  Corporations.  —  Foreign  corporations  must  file  with  the 
Secretary  of  State  declaration  designating  principal  place  of  business  in  State 
and  name  of  agent  to  receive  service  of  process,  and  must  also  file  in  same 
office  copy  of  the  charter  and  by-laws  with  amendments.  Must  also  file  annual 
statement  showing  residence  of  corporation,  amount  of  capital  stock  actually 
paid,  names  of  officers  and  board  of  directors,  with  their  residences  (Stat.,  sees. 
1466,  1467,  1469).  Foreign  corporations  must  appoint  by  written  powers  some 
resident  of  the  State  as  their  attorney  with  authority  to  accept  service  of  process 
against  such  corporation  in  this  State,  and  upon  whom  all  process  may  be  served. 
A  copy  of  such  power  of  attorney  duly  certified  and  authenticated  shall  be  filed 
with  the  Secretary  of  State  (Laws  of  1902,  chap.  980). 

Pierce  v.  Compton,  13  R.  I.  312;  Stafford  &  Co.  v.  American  Mill  Co.,  13  R.  I.  310;  Evans 
v.  Pease,  21  R.  I.  187;  42  Atl.  506. 


533 


DIGEST    OF    INCORPORATION    ACTS.  —  SOUTH  CAROLINA. 


SOUTH   CAROLINA. 

(The  references  cited  below  are  to  the  Code  of  Laws,  1902,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  South  Carolina  is  found  in  the  Code  of  Laws 
of  1902,  chaps.  47,  48.  Parties  may  incorporate  under  this  act  for  any  purpose 
whatsoever. 

2.  Incorporators. — Two  or  more  persons.  There  are  no  residential  re- 
quirements (chap.  48,  sec.  1880). 

3.  Contents  of  the  Petition  for  Incorporation  (chap.  48,  sec.  1880).  — 
The  petition  must  set  forth : 

a.    Incorporators.  —  Names  and  residences  of  the  incorporators. 
6.   Name.  —  Name  of  the  proposed  corporation.     Similarity  of  names  not 
forbidden. 

c.  Domiciliary  Office.  —  Principal  place  of  business. 

d.  Purposes.  —  May  be  formed  for  any  number  of  purposes  not  covered  by 
special  acts. 

R.  G.  Co.  v.  Company,  126  Fed.  712. 

e.  Capital  Stock.  —  Amount  of  capital  stock,  and  how  and  when  payable. 
Both  capital  and  par  value  of  shares  may  be  any  amount. 

/.    Number  and  Par  Value  of  Shares  (see  e,  ante). 

g.  Provisions  for  Internal  Regulation  of  Affairs.  —  Any  other  matter  may  be 
inserted  which  it  is  deemed  desirable  to  set  forth.  Duration  may  be  unlimited, 
if  desired  (sec.  1891). 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of  com- 
mon law  powers,  the  following  additional  powers  are  granted  by  statute :  To 
cumulate  votes  in  the  election  of  directors;  to  have  a  lien  upon  the  shares  of 
stockholders;  to  issue  preferred  stock;  to  enforce  payment  of  assessments 
due  upon  capital  stock ;  to  forfeit  the  stock  for  non-payment  thereof ;  to  vote 
by  proxy  in  the  election  of  directors ;  to  enforce  a  lien  upon  the  stock  of  stock- 
holders for  debts  due  the  corporation  (chap.  47,  sees.  1843,  1846,  1848,  1856, 
1863 ;  chap.  48,  sec.  1893 ;  see  also  Laws  of  1903,  pp.  74,  79 ;  Laws  of  1905, 
chap.  418). 

Ex  parte  Fisher,  20  S.  C.  190. 

5.  Procuring  the  Charter.  — The  petition  must  be  signed  and  acknowl- 
edged by  each  of  the  incorporators,  and  then  be  recorded  by  the  Secretary  of 
State.  He  then  issues  to  the  incorporators  a  commission  constituting  them 
a  board  of  corporators,  and  authorizing  them  to  open  books  of  subscription  to 
the  capital  stock  of  the  proposed  corporation,  after  such  public  notice,  not 
exceeding  ten  days,  as  may  be  required  in  such  commission.  When  not  less 
than  fifty  per  cent  of  the  capital  stock  shall  have  been  subscribed  by  bona  fide 
purchasers,  the  board  of  corporators  shall  call  the  subscribers  together.  At 
this  meeting  the  company  shall  organize  by  the  election  of  a  board  of  directors, 
not  to  exceed  nine  in  number.  They  shall  also  adopt  by-laws.  The  board 
of  directors  shall  then  elect  from  their  number  a  president,  a  secretary,  and  a 
treasurer.  Upon  the  payment  to  the  treasurer  of  the  corporation  of  at  least 
.twenty  per  cent  of  the  aggregate  amount  of  the  capital  subscribed,  payable  in 

534 


DIGEST    OF    INCORPORATION    ACTS.  —  SOUTH    CAROLINA. 

money,  and  also  upon  securing  the  delivery  to  such  officer  of  at  least  twenty 
per  cent  of  the  property  subscribed  to  the  aggregate  amount  of  the  capital 
stock,  the  board  of  corporators,  or  a  majority  of  them,  shall  certify  to  the 
Secretary  of  State  that  all  the  requirements  of  law  have  been  y  mplied  with. 
This  certificate  is  known  as  the  "return  of  the  corporators."  Upon  the  filing 
of  the  return  and  the  receipt  of  the  charter  fee,  and  upon  payment  of  all  fil- 
ing fees,  the  Secretary  of  State  issues  to  the  board  of  corporators  a  certificate 
known  as  a  charter.  Thereupon  a  copy  of  the  charter  must  be  recorded  in 
the  office  of  the  register  of  conveyances  or  clerk  of  each  county  wherein  the 
corporation  shall  have  a  business  office.  In  cases  where,  by  the  terms  of  the 
declaration,  the  capital  stock  of  the  corporation  is  to  be  paid  in  instalments, 
the  treasurer  may  issue  stock  when  fifty  per  cent  of  the  first  instalment  of  the 
capital  stock  has  been  paid  in  and  the  provisions  of  the  act  have  in  other 
respects  been  complied  with.  Collateral  inquiry  into  validity  of  corporate 
existence  is  forbidden  (chap.  48,  sees.  1880,  18S5). 

6.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon  the 
amount  of  corporate  indebtedness. 

7.  Organization  Tax.  —  On  capital  stock  not  exceeding  $100,000,  one  mill 
on  each  dollar,  but  never  less  than  $5  on  any  authorized  capital ;  over  SI 00,000 
and  not  exceeding  $1,000,000,  one-half  mill  on  each  dollar  in  addition  to  the 
$100  tax  on  the  first  $100,000;  exceeding  $1,000,000,  one-fourth  of  a  mill  on 
each  one  dollar  exceeding  S1,000,000  (chap.  48,  sees.  1888,  1889;  Laws  of  1904, 
chap.  245;  Laws  of  1905,  chap.  437). 

P.  M.  Co.  v.  Gautt,  68  S.  C.  199;  46  S.  E.  100S. 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State  for  recording 
declaration,  $2.50 ;  for  recording  return,  $2.50 ;  for  each  certificate  under  seal 
of  State,  $1.07;  for  certified  copy  of  the  charter,  $1.07  for  attaching  certificate 
and  10  cents  per  folio  of  one  hundred  words  for  making  copy.  For  recording 
amendments,  $5;  for  fifing  papers  of  foreign  corporations  necessary  to  secure 
permit  to  do  business  within  the  State,  $5;  for  recording  articles  in  local 
county  office,  $2. 

9.  Commencing  Business.  —  (See  also  ante,  "Procuring  Charter.")  The 
corporation  must  organize  and  commence  business  within  two  years  from  the 
date  of  its  incorporation  or  the  date  of  the  commission  appointing  the  board 
of  corporators  (chap.  47,  sec.  1850). 

10.  Organization  Meeting. — The  organization  meeting  must  be  held 
within  the  State,  in  the  absence  of  any  statute  providing  otherwise  (see  chap. 
47,  sec.  1846). 

11.  Meetings  of  Stockholders  and  Directors.  —  At  least  one  meeting 
of  the  stockholders  shall  be  held  annually  within  the  State.  Directors'  meetings 
may  be  held  at  such  place  as  the  by-laws  may  provide  (chap.  47,  sec.  1846). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  may  be  any  number  of  directors  not  exceeding  nine.  There  are  no  resi- 
dential requirements  (chap.  48,  sec.  1883).  A  most  unique  and  unusual  enact- 
ment in  connection  with  directors  of  banking,  insurance,  shipbuilding,  and 
trust  companies  is  to  be  found  in  the  Session  Laws  of  1906,  Act  40.  We  refer 
here  to  the  division  of  "boards"  into  "active"  and  "advisory"  directors. 

b.  Liabilities.  —  Directors  are  liable  for  making  false  representations  as  to 
resources  and  for  misrepresentations  in  certificates  (chap.  18,  sec.  1843).  They 
are  also  liable  for  unlawful  payments  of  dividends  (Laws  of  1909,  Act  110). 

535 


DIGEST    OF    INCORPORATION    ACTS. — SOUTH   CAROLINA. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  creditors  only 
to  the  extent  of  their  unpaid  stock  subscriptions  (Cons.,  Art.  IX.  sec.  18). 
Under  chap.  418  of  the  Laws  of  1905  the  liability  of  the  stockholders  is  ex- 
pressly limited  to  the  amount  remaining  due  to  the  corporation  on  the  stock 
owned  by  them. 

M.  C.  Mills  v.  Springs,  56  S.  C.  534;  35  S.  E.  222;  Lauraglen  Mills  v.  Ruff,  57  S.  C.  53; 
35  S.  E.  387;  Williams  v.  Benet,  34  S.  C.  112;   13  S.  E.  97. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
under  the  seal  of  the  corporation  signed  by  the  secretary  or  treasurer  (chap. 
47,  sec.  1847,  as  amended  byLawsof  1905,  chap.  436;  as  to  right  of  stockholder 
to  require  corporation  to  issue  new  certificate,  in  place  of  lost  certificate,  see 
Laws  of  1911,  chap.  26). 

15.  Preferred  Stock.  —  There  is  express  provision  for  the  issuance  of 
preferred  stock  (chap.  47,  sec.  1856). 

16.  Payment  of  Capital  Stock.  —  Stock  can  be  issued  only  for  labor 
done  or  money  or  property  actually  received  (chap.  47,  sec.  1855 ;  chap.  48, 
sec.  1882).  Unless  the  charter  provides  that  stock  may  be  paid  in  instalments, 
it  cannot  be  issued  until  fully  paid  (chap.  48,  sec.  1894).  No  subscriptions  in 
labor  or  property  can  be  received  unless  the  same  and  value  thereof  are  approved 
by  the  board  of  corporators  (chap.  48,  sec.  1882). 

17.  Books.  —  Books  are  required  to  be  kept  open  to  inspection  of  stock- 
holders, and  it  may  be  inferred  from  the  statute  that  they  must  be  kept  in 
the  State  (chap.  48,  sec.  1897). 

18.  Office  and  Agent.  —  There  are  no  express  requirements  as  to  having 
a  principal  office  or  place  for  the  transaction  of  business  within  the  State,  but 
by  construction  it  is  necessary  to  maintain  a  domiciliary  office.  (See  Cromwell 
v.  Ins.  Co.,  2  Rich.  Law,  512.) 

19.  Reports.  —  All  corporations,  both  domestic  and  foreign,  shall  annually 
during  the  month  of  February  of  each  year  file  with  the  Comptroller-General 
a  statement  containing:  (1)  The  name  of  the  company;  (2)  location  of  princi- 
pal office;  (3)  name  and  post-office  addresses  of  the  president,  secretary, 
treasurer,  superintendent,  and  general  manager,  and  the  members  of  the  board 
of  directors ;  (4)  date  of  annual  election  of  officers ;  (5)  amount  of  authorized 
capital  stock  and  par  value  of  each  share;  (6)  amount  of  capital  stock  sub- 
scribed, issued,  and  outstanding,  and  the  amount  of  capital  stock  paid  up; 
(7)  the  nature  of  the  business  and  location  thereof  (Laws  of  1905,  chap.  407). 

The  president  or  such  other  officer  who  shall  have  the  custody  of  the  affairs 
of  any  corporation  organized  and  doing  business  under  the  laws  of  this  State, 
shall  annually,  on  or  before  the  30th  day  of  December  of  each  and  every  year, 
make  and  submit  to  each  and  every  stockholder  of  any  such  corporation  who 
may  make  such  request  therefor  in  writing,  a  duly  itemized  statement  under 
oath,  showing  the  actual  assets  and  liabilities  of  such  corporation,  and  shall 
deliver  a  copy  of  such  statement  to  each  and  every  such  stockholder  of  such 
corporation  as  herein  provided  for,  either  in  person  or  by  mail,  and  proof  of  the 
mailing  of  any  such  notice  as  required  by  the  terms  of  this  act  shall  be  a  suffi- 
cient compliance  therewith,  provided  that  in  such  report  it  shall  not  be  necessary 
to  state  the  names  of  any  corporate  officer  of  such  corporation  (Laws  of  1909, 
Act  110). 

20.  Anti-Trust  Statute.  —  There  is  an  anti-trust  statute  in  force  in  South 
Carolina.     (See  C.  C,  1902,  sees.  2845,  2847.) 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charter  may  be 

536 


DIGEST    OF    INCORPORATION    ACTS.  —  SOUTH    CAROLINA. 

forfeited  for  non-user  for  five  years,  or  for  non-payment  of  taxes,  or  for  non- 
payment of  annual  franchise  tax,  or  for  violation  of  anti-trust  statute  (chap. 
48,  sec.  1898;  chap.  47,  sec.  1865;  see  also  C.  C,  1902,  sees.  308,  2845,  2847). 
It  may  also  be  forfeited  for  failure  to  organize  and  commence  business  within 
two  years  from  incorporation  (chap.  47,  sec.  1S50). 

22.  Amendments.  —  Any  corporation  may  increase  or  decrease  its  capital 
stock  in  the  manner  following :  Whenever  by  resolution  of  the  board  of  directors 
an  increase  of  the  capital  stock  of  the  corporation  is  determined  upon,  a  meet- 
ing of  the  stockholders  shall  be  called  to  consider  such  resolution,  by  not  ire 
published  at  least  once  a  week  for  four  successive  weeks  previous  to  the  date 
fixed  in  such  notice  for  same  in  some  newspaper  published  in  the  county  where 
the  corporation  has  its  principal  place  of  business,  which  notice  shall  state 
the  time  and  place  of  the  meeting,  the  purpose  for  which  it  is  called,  and  the 
maximum  amount  to  which  it  is  proposed  the  capital  stock  shall  be  increased. 
The  vote  of  two-thirds  of  the  stock  of  the  corporation  shall  be  necessary  to 
make  an  increase,  which  increase  may  be  so  made  to  any  amount  not  exceed- 
ing the  maximum  amount  stated  in  such  notice  of  the  meeting  of  stockholders. 
The  board  of  directors  shall  certify  the  resolution  of  the  stockholders  to  the 
Secretary  of  State,  and  that  all  the  requirements  of  tlus  section  as  to  said 
increase  of  capital  stock  have  been  complied  with.  In  case  the  corporation 
increasing  its  capital  stock  is  incorporated  under  the  general  law,  the  board  of 
directors  shall  likewise  return  to  the  Secretary  of  State  the  original  charter  or 
certificate  of  incorporation  for  the  endorsements  herein  mentioned.  The  Secre- 
tary of  State  shall  thereupon  record  the  said  certificate  of  the  board  of  directors, 
and  shall  likewise  endorse  upon  the  charter  or  certificate  of  incorporation  a 
certificate  of  the  increase  of  the  capital  stock,  and  shall  forthwith  return  the 
charter  or  certificate  of  incorporation  with  such  endorsement  thereon  to  the  board 
of  directors,  and  in  cases  where  the  law  under  which  such  corporation  is  created 
or  organized  requires  the  charter  or  certificate  of  incorporation  to  be  recorded 
in  the  office  of  the  register  of  mesne  conveyances  and  clerk  of  court,  a  certificate 
of  such  increase  of  the  capital  stock  endorsed  by  the  Secretary  of  State.  On 
the  charter  or  certificate  of  incorporation  as  hereinbefore  required  shall  be  re- 
corded across  the  face  of  the  record  of  the  charter  or  certificate  of  incorporation, 
in  the  office  of  the  register  of  mesne  conveyances  or  clerk  of  court  where  the 
charter  or  certificate  of  incorporation  is  required  to  be  recorded,  such  increase 
of  the  capital  stock  of  such  corporation  as  shall  be  authorized  when  the  certifi- 
cate is  lodged  for  record  in  said  office. 

In  cases  where  the  capital  stock  is  increased  as  by  this  section  provided,  the 
stockholder  or  stockholders  thereof  registered  in  the  books  of  such  corporation 
at  the  time  when  said  increase  of  stock  was  authorized  shall  have  the  pref- 
erence of  taking  such  increase  of  stock  in  proportion  to  the  amount  of  stock 
he,  she,  or  they  may  own;  but  if  such  stockholder  or  stockholders  shall 
not  avail  himself,  herself,  or  themselves  of  such  privilege  within  ten  days 
after  the  lodgment  for  record  of  such  certificate  to  increase  their  capital 
stock,  the  board  of  directors  may  dispose  of  the  said  increased  capital  stock 
as  they  may  deem  best  at  its  market  value  in  money  or  property  (haws  of 
1904,  chap.  248). 

23.  Extension  of  Corporate  Existence.  -  Provision  is  made  for  exten- 
sion of  corporate  existence.     (See  chap.  47,  sec.  1871  ;    chap.    IS,  sec.   IX9I.) 

24.  Dissolution.  —  Corporate  powers  cease  if  organization  is  no!  com- 
pleted and  business  commenced  within  two  years,  and  Court  of  Common  Pleas 


DIGEST    OF    INCORPORATION   ACTS. — SOUTH    CAROLINA. 

may  dissolve  any  company  for  non-user;  may  also  dissolve  voluntarily  by  reso- 
lution of  stockholders  representing  a  majority  of  capital  stock  (chap.  47,  sees. 
1866,  1873;  Laws  of  1902,  Act  No.  566;  see  Code  of  Civil  Procedure,  1902, 
sec.  265 ;  Laws  of  1904,  chap.  269 ;  Laws  of  1906,  Act  1). 

25.  Annual  License  Fee.  —  Under  the  franchise  tax  of  1903,  which  did 
not  go  into  effect  until  April  1,  1904,  all  business  corporations  except  those 
of  a  quasi-public  nature  must  pay  to  the  State  Treasurer  on  or  before  April  1 
of  each  year  an  annual  license  fee  of  one-half  mill  upon  every  dollar  paid  in 
upon  the  capital  stock,  and  not  less  than  $5  in  any  case  (Laws  of  1904,  chap. 
269 ;  Laws  of  1905,  chap.  407). 

26.  Foreign   Corporations.  —  Foreign   corporations  must  file  with  the 

Secretary  of  State  a  declaration  designating  principal  place  of  business  in  the 

State  and  the  name  of  agent  to  receive  service  of  process,  and  must  also  file 

in  same  office  a  copy  of  the  charter  and  by-laws  with  amendments.    Must  also 

file  annual  statement  showing  residence  of  corporation,  amount  of  capital  stock 

actually  paid,  names  of  officers  and  board  of  directors,  with  their  residences,  etc. 

They  are  required  to  pay  a  fee  of  one-half  mill  on  each  dollar  of  property  owned 

by  them  within  the  State  (C.  C,  1902,  sees.  1779,  1795,  2360;    Laws  of  1904, 

chaps.  247,  269 ;  Laws  of  1905,  chap.  407).     The  fee  for  filing  necessary  papers 

in  the  Secretary  of  State's  office  for  securing  permit  to  transact  business  within 

the  State  is  $5.00. 

Central  R.  R.,  etc.  Co.  v.  Company,  32  S.  C.  319;  11  S.E.  192;  Cone,  etc.  Co.  v.  Poole,  41 
S.  C.  70 ;  19  S.  E.  203 ;  Hollingsworth  v.  Sou.  R.  R.  Co.,  86  Fed.  353 ;  State  v.  Company  (S.  C), 
61  S.  E.  455. 


538 


DIGEST    OF    INCORPORATION    ACTS. — SOUTH    DAKOTA. 


SOUTH   DAKOTA. 

(The  references  cited  below  are  to  the  Revised  Civil  Code  of  1903  and  to  the  Compiled 
Laws  of  1887,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. 

—  The  Business  Corporation  Act  of  South  Dakota  is  to  be  found  in  Revised 
Civil  Code  of  1903,  sees.  396-479  (Compiled  Laws  of  1887,  sees.  2889-2971). 
Those  relating  to  mining,  manufacturing,  and  other  industrial  corporations  are 
sees.  780-797,  Revised  Civil  Code,  1903  (Compiled  Laws,  1887,  sees.  3108- 
3125;  Laws  of  1907,  chap.  104).  The  provisions  relating  to  amendment  of 
charters  are  found  in  chap.  106,  Session  Laws  of  1903.  As  to  the  extension  of 
corporate  existence  see  chap.  105,  Session  Laws  of  1903.  Many  and  effective 
amendments  to  the  General  Act  are  to  be  found  in  Laws  of  1907,  chap.  104. 
Under  this  act  corporations  may  be  formed  for  any  lawful  purpose.  Special 
acts  are,  however,  provided  for  incorporation  of  railway,  street  railway,  wagon 
road,  irrigation,  insurance,  loan,  trust,  mortgage  companies,  and  for  banks  of 
discount.  Laws  of  1905,  chap.  74,  as  amended  by  Laws  of  1907,  chap.  109, 
provides  for  organization  of  trust  companies. 

2.  Incorporators.  — Three  or  more,  one-third  of  whom  must  be  residents 
of  the  State  (R.  C.  C,  sec.  407 ;  C.  L  ,  sec.  2900;  Laws  of  1907,  chap.  104). 

Singer  Mfg.  Co.  v.  Peck,  9  S.  D.  29;  67  N.  W.  947. 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate  must 
set  forth : 

a.  Name.  —  The  Secretary  of  State  will  not  permit  the  use  of  another  name 
already  in  use  by  a  domestic  corporation. 

b.  Purposes.  —  The  purpose  for  which  it  is  formed.  The  Secretary  of 
State  allows  the  insertion  of  any  number  of  purposes  not  covered  by  special 
acts. 

Vokes  v.  Eaton  (Ky.),  85  S.  W.  174. 

c.  Domicile.  —  Place  where  the  principal  business  of  the  corporation  is  to 
be  transacted.  All  corporations  having  any  business  offices  out  of  the  State 
must  have  their  main  office  for  the  transaction  of  business  within  the  State, 
and  this  must  also  be  designated  in  the  articles  of  incorporation  (Laws  of  1907, 
chap.  104).  Any  corporation  may  provide  in  its  articles  of  incorporation  for 
having  one  or  more  business  offices  without  the  State,  at  any  place  to  be  named 
in  the  articles  of  incorporation  (R.  C.  C.  786,  as  amended  by  Laws  of  1907,  chap. 
104).  If  desired,  the  name  of  the  resident  agent  may  be  inserted  in  the  articles 
of  incorporation  (Laws  of  1907,  chap.  104). 

d.  Duration.  —  Not  to  exceed  twenty-five  years  (Laws  of  1907,  chap.  104). 

e.  Directors.  —  Number  and  names  and  residences  of  those  who  are  to 
serve  until  the  election  of  their  successors,  and  qualifications  must  also  be  set 
forth. 

/.  Capital  Stock.  —  Amount  and  number  of  shares  into  which  the  same  is 
divided.  There  is  no  limit  to  the  amount  of  capital  stock.  The  par  value  of 
shares  may  be  any  amount  (R.  C.  C,  sec.  408;  C.  L.,  sec.  2902).  If  preferred 
stock  is  to  be  issued,  it  shall  be  provided  for  in  the  articles  of  incorporation 
(Laws  of  1907,  chap.  104). 

539 


DIGEST    OF    INCORPORATION   ACTS. — SOUTH   DAKOTA. 

g.  The  articles  of  incorporation  may  prescribe  the  qualifications  of  its 
directors,  trustees,  and  other  officers ;  fix  and  limit  the  number  of  votes  of  stock- 
holders in  such  corporation,  provided  that  no  one  stockholder  shall  be  entitled 
to  more  votes  than  the  number  of  shares  of  stock  owned  by  him,  provided 
that  when  the  number  of  votes  is  limited  to  less  than  one  vote  for  each 
share  of  stock,  such  limit  shall  be  stated  on  the  face  of  each  certificate  of 
stock  issued.  The  articles  may  also  limit  the  liability  of  such  stockholder 
to  the  amount  remaining  unpaid  on  his  capital  stock  (Laws  of  1909,  chap. 
264). 

Any  corporation,  excepting  banking  corporations,  trust  companies,  and 
surety  companies  heretofore  organized  under  the  provisions  of  this  act,  by  each 
stockholder  in  said  corporation  signing  a  statement  in  writing  to  the  effect  that 
such  stockholder  desires  said  corporation  to  have  an  additional  power  granted 
to  such  corporation,  by  subdivision  7  of  section  408  of  the  Revised  Civil  Code 
of  this  State,  and  filing  such  statement  with  the  secretary  of  such  corporation ; 
thereupon  such  corporation  may  amend  its  charter  and  conform  to  the  pro- 
visions of  this  act  in  the  manner  provided  by  section  419  of  the  Revised  Civil 
Code  of  1903,  upon  making  the  proper  proof  by  affidavit  signed  by  all  of  the 
officers  and  directors  of  such  corporation,  that  all  of  the  stockholders  of  such 
corporation  have  signed  and  filed  such  statement  with  the  secretary  of  such 
corporation  (Laws  of  1909,  chap.  264,  sec.  22). 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of 
common  law  powers  the  act  provides  for  voting  by  proxy  at  elections  of  direc- 
tors; for  cumulative  voting;  for  forfeiture  of  shares  for  non-payment  of  sub- 
scriptions; for  having  a  business  office  without  the  State  but  within  the  United 
States,  and  for  holding  therein  any  meeting  of  the  stockholders  or  directors; 
for  removal  of  directors ;  for  extension  of  corporate  existence ;  for  purchase  of 
the  corporation's  own  stock ;  for  issuing  stock  in  exchange  for  property  or  ser- 
vices (R.  C.  C,  sec.  427;  C.  L.,  sec.  2199;  R.  C.  C,  sec.  429;  C.  L.,  sec.  2921 ; 
Cons.,  Art.  XVII.  sec.  5;  R.  C.  C,  sees.  453-649  inclusive;  R.  C.  C,  sec.  786; 
C.  L.,  sec.  3114 ;  R.  C.  C,  sec.  438 ;  C.  L.,  sec.  2930 ;  R.  C.  C,  sec.  439 ;  C.  L.,  sec. 
2931;  Laws  of  1903,  chap.  105;  R.  C.  C,  sec.  425;  C.  L.,  sec.  2917;  R.  C.  C, 
sec.  422 ;  C.  L.,  sec.  2914 ;  R.  C.  C,  sec.  464 ;  C.  L.,  sec.  2956 ;  Cons.,  Art.  XVII. 
sec.  8).  To  issue  preferred  stock  (Laws  of  1907,  chap.  104).  The  board  of  direc- 
tors are  given  power  to  appoint  an  executive  committee  (Laws  of  1907,  chap. 
104).  Cumulative  voting  in  the  election  of  directors  is  provided  for  by  consti- 
tutional provision.  (See  Cons.,  Art.  VII.  sec.  5.)  By  vote  of  three-fourths  of 
the  stockholders  the  corporation  may  direct  the  sale  or  mortgage  of  all  of  its 
corporate  properties  (Laws  of  1909,  chap.  118).  Directors  may  be  classified 
if  provision  is  made  therefor  in  the  articles  of  incorporation  (Laws  of  1911, 
chap.  106). 

Summers  v.  Company,  86  N.  W.  749;  Magowan  v.  Greneweg  (S.  D.),  91  N.  W.  335;  86 
N.  W.  626. 

5.  Procuring  the  Charter.  —  The  certificate  must  be  signed  and  ac- 
knowledged by  the  incorporators  before  the  same  can  be  filed  and  charter  issued. 
Two  of  the  incorporators  must  take  oath  that  the  corporation  is  not  formed 
for  the  purpose  of  enabling  it  to  avoid  the  purposes  of  the  South  Dakota  Anti- 
Trust  Act,  and  upon  the  filing  and  recording  of  the  certificate  in  his  office  the 
Secretary  of  State  issues  a  certificate  of  due  incorporation  (R.  C.  C,  sees.  410, 
411;  C.  L.,  sees.  2904,  2905;  Revised  Penal  Code,  sec.  781). 

Mason  v.  Stevens  et  al.  (S.  D.),  92  N.  W.  424;  B.  &  L.  Ass'n  v.  Chamberlain,  4  S.  D.  271; 
56  N.  W.  897;  Thomas  v.  Wilcox  (S.  D.),  110  N.  W.  1072. 

540 


DIGEST    OF    INCORPORATION*    ACTS.  —  SOUTH    DAKOTA. 

6.  Corporate  Indebtedness.  —  Debts  cannot  be  contracted  beyond  the 
amount  of  stock  subscribed  (R.  C.  C,  sec.  436;  C.  L.,  sec.  2928). 

7.  Organization  Tax.  —  Where  the  authorized  capital  stock  is  $25,000  or 
less,  S10;  over  825,000  and  not  exceeding  S100,000,  815;  over  §100,000  and 
not  exceeding  S500.000,  S20;  over  8500,000  and  not  exceeding  81,000,000, 
$30;  over  S1,000,000  and  not  exceeding  Sl,500,000,  840;  over  81,500,000  and 
not  exceeding  S2,000,000,  850 ;  over  82,000,000  and  not  exceeding  S2,500,000, 
860;  over  S2,500,000  and  not  exceeding  83,000,000,  870;  over  83,000,000  and 
not  exceeding  83,500,000,  880;  over  83,500,000  and  not  exceeding  84,000,000, 
890 ;  over  84.000.000  and  not  exceeding  84,500,000,  8100 ;  over  84,500,000  and 
not  exceeding  S5,000,000,  8110;  over  85,000,000,  8150  (Laws  of  1907,  chap. 
149). 

8.  Filing  and  Recording  Fees.  —  The  payment  of  the  organization  tax 
covers  all  filing  and  recording  fees  in  the  office  of  the  Secretary  of  State.  For 
making  certified  copy  of  articles  of  incorporation  the  charge  is  25  cents  per 
folio  of  one  hundred  words  for  copying,  and  81  for  certificate.  No  charge  is 
made  for  issuing  a  certificate  of  incorporation.  For  examining  and  fifing  amended 
articles  of  incorporation,  810,  where  the  same  does  not  provide  for  the  increase 
of  stock ;  in  the  latter  case  an  organization  tax  must  be  paid  on  the  increased 
capital  stock  as  authorized ;  for  making  transcript  of  articles  of  incorporation, 
25  cents  per  folio;  for  official  certificate,  81 ;  for  examining  and  filing  articles 
of  incorporation  of  foreign  corporations  and  issuing  authority  to  do  business, 
$10 ;  for  examining  and  filing  annual  statement,  $5 ;  for  making  and  filing  and 
recording  appointment  of  resident  agent  of  foreign  corporation,  810. 

9.  Commencing  Business.  —  Where  a  resident  agent  is  not  named  in 
the  certificate  of  incorporation,  all  domestic  corporations  not  doing  business 
within  the  State  must,  before  commencing  business,  appoint  a  resident  agent 
residing  at  the  domiciliary  office  of  the  corporation.  One  of  the  officers  of  the 
corporation  may  be  appointed  as  such  agent,  if  desired  (Laws  of  1907,  chap.  104). 
After  the  issuance  of  the  certificate  of  incorporation,  the  incorporation  act 
directs  (without  providing  any  penalty  therefor)  that  the  directors  must  pro- 
ceed in  the  manner  specified  in  the  by-laws,  or  if  none  is  specified,  then  in  such 
manner  as  they  may  adopt,  to  secure  subscriptions  to  the  full  amount  of  the 
fixed  capital  (R.  C.  C,  sec.  421 ;  C.  L.,  sec.  2913).  Unless  the  corporation  organ- 
izes and  commences  the  transaction  of  business  or  the  construction  of  its  works 
within  one  year  from  the  date  of  its  incorporation,  its  corporate  powers  cease. 
Every  corporation  shall,  within  one  month  after  filing  articles  of  incorporation, 
adopt  a  code  of  by-laws  for  its  government,  but  no  penalty  or  forfeiture  is 
declared  in  case  of  non-compliance  with  this  provision,  and  it  is  regarded  as 
directory  only  (R.  C.  C,  sec.  411 ;  C.  L.,  sec.  2905).  No  collateral  inquiry  into 
corporate  existence  is  permitted  (R.  C,  sec.  399 ;   C.  L.,  sec.  2892). 

10.  Organization  Meeting.  — The  organization  meeting  may  be  held  at 
the  principal  office  of  the  corporation  without  the  State  if  provision  is  made 
therefor  in  the  articles,  otherwise  it  must  be  held  within  the  State  (R.  C.  C, 
sec.  786 ;  C.  L.,  sec.  31 14  ;  R.  C.  C,  sec.  440 ;  C.  L.,  sec.  2932).  The  act  provides 
that  when  all  the  stockholders  of  a  corporation  are  present  at  any  meeting, 
however  called  or  notified,  and  sign  a  written  consent  thereto  on  the  records 
of  such  meeting,  the  doings  of  such  meeting  are  as  valid  as  if  had  at  a  meeting 
legally  called  and  noticed  (R.  C.  C,  sec.  442;    C.  L.,  sec.  2934). 

11.  Meetings  of  Stockholders  and  Directors.  —  Incorporators',  stock- 
holders', and  directors'  meetings  must  be  held  at  the  office  or  principal  place 

541 


DIGEST    OF   INCORPORATION   ACTS.  —  SOUTH   DAKOTA. 

of  business  of  the  company.  All  meetings  of  stockholders  and  directors  of 
mining,  manufacturing,  and  other  industrial  corporations  may  be  held  at  the 
outside  office  named  in  the  articles  of  incorporation;  and  this  may  be  pro- 
vided for  in  the  articles ;  and  the  articles  may  be  amended  to  change  the  loca- 
tion of  the  outside  office.  The  mode  of  calling  meetings  is  as  provided  in  the 
by-laws.  The  domiciliary  office  is  kept  at  the  place  in  the  State  named  in  the 
articles  as  the  principal  place  of  business.  The  original  books  and  records 
may  be  kept  at  the  outside  business  office,  if  there  be  one  (R.  C.  C,  sec.  786; 
C.  L.,  sec.  3114;  see  also  R.  C.  C,  sec.  440;  C.  L.,  sec.  2932).  Under  the 
1907  Amendment  offices  may  be  named  without  the  State,  in  any  other  State, 
or  in  any  foreign  country,  wherein  may  be  held  all  stockholders'  and  directors* 
meetings,  if  desired  (Laws  of  1907,  chap.  104). 

Wrieht  v  Lee,  4  S.  D.  237;  55  N.  W.  931;  In  re  Argus  Printing  Co.,  1  N.  D.  434;  84 
N.  W.  347;  Troy  Min.  Co.  v.  White,  10  S.  D.  475;  74  N.  W.  236. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications. — The 
act  provides  that  one  of  the  directors  or  officers  of  the  corporation  shall  be  a 
resident  of  the  State  (Laws  of  1907,  chap.  104,  sec.  1).  Directors  are  elected 
annually  by  a  majority  vote  of  the  stockholders.  The  board  must  be  composed 
of  at  least  three  and  not  more  than  eleven  directors.  The  president  of  the 
corporation  must  be  a  member  of  the  board.  The  directors  must  be  stockholders 
to  an  amount  to  be  fixed  by  the  by-laws.  Immediately  after  their  election  the 
directors  must  organize  by  the  election  of  a  president,  secretary,  and  treasurer. 
An  executive  committee  composed  of  two  or  more  members  of  the  board  may 
be  appointed  by  resolution  of  the  board  of  directors.  Such  committee  may  be 
provided  for  in  the  by-laws  of  the  corporation,  and  such  committee  shall  have 
the  same  powers  as  the  board  of  directors  (R.  C.  C,  sec.  434;  C.  L.,  sec.  2926; 
Laws  of  1907,  chap.  104;  Laws  of  1909,  chap.  264,  sec.  3).  Directors  may  be 
classified  if  provision  is  made  therefor  in  the  articles  of  incorporation  (Laws 
of  1911,  chap.  106). 

Magowan  v.  Greneweg  (S.  D.),  86  N.  W.  626;  91  N.  W.  335. 

b.  Liabilities.  —  Directors  are  liable  for  the  illegal  declaration  of  dividends, 
or  for  the  unlawful  withdrawal  of  capital,  or  for  any  violation  of  law  applying 
to  corporations  whereby  the  latter  become  insolvent.  Directors  assenting  to 
such  violation  are  jointly  and  severally  liable  for  all  debts  contracted  after 
such  violation  (R.  C.  C,  sec.  436;  C.  L.,  sec.  2928;  R.  C.  C,  sec.  787;  C.  L., 
sec.  3115).  Any  officer  wilfully  making  false  reports,  certificates,  or  entries  is 
liable  in  damages  to  any  person  injured  thereby  (R.  C.  C,  sec.  437;  C.  L., 
sec.  2929).  Any  superintendent,  director,  secretary,  manager,  agent,  or  other 
officer  of  any  corporation  formed  or  existing  under  the  laws  of  South  Dakota 
or  transacting  business  in  the  said  State,  and  any  person  pretending  or  holding 
himself  out  as  such  superintendent,  director,  secretary,  manager,  agent,  or 
other  officer  who  shall  wilfully  subscribe,  sign,  endorse,  verify,  or  otherwise 
assent  to  the  publication,  either  generally  or  privately  to  the  stockholders  or 
other  persons  dealing  with  such  corporation  or  its  stock,  knowing  the  same  to 
be  untrue,  or  wilfully  and  fraudulently  issues  exaggerated  report,  prospectus, 
account,  statement  of  operations,  values,  business,  profits,  expenditures,  or 
prospecti,  or  other  paper  or  document  intended  to  produce  or  give,  or  having  a 
tendency  to  produce  or  give,  to  the  shares  of  stock  in  such  corporation  a  greater 
value  or  less  apparent  or  market  value  than  they  really  possess,  or  with  the 
intention  of  defrauding  any  particular  person  or  persons,  or  the  public  or  per- 

542 


DIGEST    OF    INCORPORATION    ACTS.  —  SOUTH    DAKOTA. 

sons  generally,  shall  be  deemed  guilty  of  a  felony,  and  on  conviction  thereof 
shall  be  punished  by  imprisonment  in  State  prison  or  a  county  jail  not  exceed- 
ing two  years  or  by  a  fine  not  exceeding  $5,000,  or  both  (sec.  1,  chap.  108; 
Sess.  Laws,  1907). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  amount 
of  their  unpaid  stock  subscriptions  (R.  C.  C,  sec.  431 ;  C.  L.,  sec.  2933).  They 
are  also  liable  for  labor  claims  (R.  C.  C,  sec.  783 ;  C.  L.,  sec.  3111.  As  to  con- 
stitutionality of  this  statute,  see  cases  cited  below). 

S.  B.  T.  M.  Co.  v.  Company,  4  S.  D.  173;  56  N.  W.  98;  Busby  v.  Riley  et  al.,  6  S.  D. 
401 ;  61  N.  W.  164;  Singer  Mfg.  Co.  v.  Peck,  9  S.  D.  29;  67  N.  W.  947;  R.  O.  T.  Co.  v.  Well- 
man,  10  S.  D.  122;  72  N.  \V.  89. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
signed  by  the  president  and  secretary  (R.  C.  C,  sec.  423;  C.  L.,  sec.  2915; 
Laws  of  1907,  chap.  104).  The  by-laws  may  provide  for  issuing  certificates  of 
stock  prior  to  full  payment,  if  desired  (Laws  of  1907,  chap.  104). 

15.  Preferred  Stock.  —  Preferred  stock  may  be  issued  in  such  amounts  as 
may  be  provided  for  in  the  articles  of  incorporation  or  in  the  by-laws  (Laws  of 
1907,  chap.  104). 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  in  exchange  for 
money,  labor  done,  or  money  or  property  actually  received  (Cons.,  Art.  XVII. 
sec.  8).  When  property  is  taken  by  the  corporation  in  consideration  for  capital 
stock  of  the  corporation,  the  judgment  of  the  board  of  directors,  made  in  good 
faith  and  entered  in  the  minutes  of  the  corporation,  shall  be  conclusive  as  to 
the  value  of  such  property  (Laws  of  1907,  chap.  104).  The  act  provides  that 
the  directors  named  in  the  articles  of  incorporation  must  proceed  to  open 
books  of  subscription  to  the  capital  stock  unsubscribed  and  to  secure  sub- 
scriptions to  the  full  amount  of  the  fixed  capital  (R.  C.  C,  sec.  421 ;  C.  L., 
sec.  2913). 

Hennesy  v.  Griggs  et  al.,  1  N.  D.  52;  44  N.  W.  1010;  C.  H.  S.  Co.  v.  Ferguson  et  al., 
8S.  D.  534;  67  N.  W.  615. 

17.  Books.  —  Every  corporation  must  keep  a  journal  of  meetings  of  direc- 
tors and  stockholders.  They  must  also  keep  a  stock  and  transfer  book,  which 
with  the  journal  is  open  to  inspection  of  stockholders,  directors,  and  creditors 
of  the  corporation,  containing  a  record  of  all  stock,  the  names  of  stockholders 
alphabetically  arranged,  instalments  paid  or  unpaid,  transfers,  etc.  Also  a  book 
of  by-laws,  to  be  open  to  inspection  during  office  hours.  The  law  does  not  pro- 
vide, however,  that  any  of  these  books  shall  be  kept  within  the  State,  and  pro- 
visions in  the  articles  of  incorporation  for  keeping  them  at  the  outside  office 
are  regularly  allowed  by  the  Secretary  of  State  (R.  C.  C,  sec.  423;  C.  L.,  sec. 
2915;  R.  C.  C,  sec.  428;  C.  L.,  sec.  2920;  R.  C.  C,  sec.  445;  C.  L.,  sec.  2937; 
R.  C.  C,  sec.  782). 

Section  3110  of  the  Compiled  Laws  provides  as  follows:  Regular  books  of  ac- 
count of  all  the  business  of  corporations  must  be  kept,  which,  with  the  vouchers, 
shall  be  at,  all  reasonable  limes  open  for  I  he  inspection  of  any  of  the  stockhold- 
ers; and  as  often  as  once  in  each  year  a  statement  of  such  accounts  shall  be  made, 
by  order  of  the  directors,  and  laid  before  the  stockholders. 

18.  Office  and  Agent.  —  Every  corporation  of  the  State  which  is  not  doing 
or  carrying  on  business  within  the  State  shall  appoint  a  resident  agent  who 
shall  reside  at  the  place  of  business  or  domiciliary  office  of  such  corporation 
in  the  State  designated  in  the  articles  of  incorporation,  and  such  resident  agent 

543 


DIGEST    OF    INCORPORATION    ACTS. — SOUTH   DAKOTA. 

may  be  one  of  the  officers  of  the  corporation,  and  service  of  legal  process  upon 
such  agent  shall  constitute  legal  and  valid  service  upon  such  corporation.  Such 
appointment  of  resident  agent  shall  be  made  in  writing  signed  by  the  president 
or  secretary  of  the  corporation  and  duly  acknowledged,  and  shall  be  filed  in 
the  office  of  the  Secretary  of  State.  If  desired,  such  resident  agent  may  be 
appointed  in  the  articles  of  incorporation  (Laws  of  1907,  chap.  104). 

19.  Reports. — The  statute  provides  that  business  corporations  doing 
business  within  the  State  shall  annually,  within  twenty  days  from  the  1st  day 
of  January,  make  a  report  which  must  be  published  in  some  newspaper  at  or 
nearest  to  the  place  where  the  business  of  the  corporation  is  carried  on,  which 
report  must  state  the  capital  stock  and  the  amount  thereof  actually  paid  in, 
the  amount  and  nature  of  indebtedness,  and  the  amount  due  the  corporation, 
the  number  and  amount  of  dividends  and  when  paid,  and  the  net  amount  of 
profits.  Such  report  must  be  signed  by  the  president  and  a  majority  of  directors, 
and  be  verified  by  oath  of  the  president  or  secretary,  and  filed  in  the  office  of 
register  of  deeds  of  county  where  the  business  of  the  corporation  is  carried  on. 
The  only  penalty  provided  for  failure  to  comply  with  the  statute  is  that  a  person 
who  wilfully  neglects  or  refuses  to  make,  sign,  or  publish  such  report  shall  be 
guilty  of  misdemeanor  (R.  C.  C,  sec.  784;  C.  L.,  sec.  3112).  Upon  written 
request  of  twenty  per  cent  of  the  issued  capital  stock  the  treasurer  is  required 
to  furnish  a  written  statement  of  the  affairs  of  the  corporation  (R.  C.  C,  sec.  785 ; 
C.  L.,  sec.  3113). 

20.  Anti-Trust  Statute.  —  There  is  a  somewhat  drastic  anti-trust  statute 
in  force  in  South  Dakota  (Laws  of  1909,  chap.  224). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Unless  the  cor- 
poration is  organized  and  commences  business  within  one  year  after  incorpora- 
tion, the  corporate  powers  cease.  Charters  may  also  be  forfeited  by  the  State 
on  any  of  the  following  grounds :  For  violating  any  of  the  laws  creating,  alter- 
ing, or  renewing  corporations ;  by  violating  any  express  provisions  of  the  law 
whereby  the  corporation  shall  have  forfeited  its  charter  by  abuse  of  its  powers ; 
by  failure  to  exercise  its  powers;  whenever  it  shall  have  done  or  omitted  to 
do  any  act  which  amounts  to  a  surrender  of  its  corporate  rights ;  for  exercising 
franchises  or  privileges  not  conferred  upon  it  by  law  (R.  C.  C,  sec.  447;  C.  L., 
sec.  2939;  R.  C.  C,  sec.  571 ;  C.  L.,  sec.  5346). 

22.  Amendments.  —  Articles  may  be  amended  so  as  to  modify  or  enlarge 
corporate  business  or  purposes,  change  number  of  directors,  change  name  or 
location  of  its  business  within  the  State  or  without  the  State,  increase  or  decrease 
the  capital  stock,  or  in  any  other  respect,  by  vote  of  two-thirds  of  all  outstand- 
ing stock  at  any  regular  or  special  meeting  called  for  that  purpose  after  thirty 
days'  notice  (sixty  days  for  increase  of  stock)  given  to  each  stockholder,  stating 
nature  of  proposed  amendment.  After  notice  of  proposed  amendment  is  served 
upon  stockholders,  time  may  be  waived  by  all  of  them,  and  amendment  can  be 
adopted  immediately.  Capital  stock  cannot  be  diminished  to  an  amount  less 
than  indebtedness  of  corporation  or  estimated  cost  of  works  which  it  may  be 
the  purpose  of  the  corporation  to  construct.  After  amendment  is  adopted,  the 
president  and  secretary  of  the  corporation  shall  prepare  in  duplicate  a  certifi- 
cate setting  forth  amendment,  stating  number  of  votes  cast  therefor,  and  total 
number  of  shares  of  stock  subscribed  and  outstanding,  and  that  legal  notice  was 
given.  One  of  these  certificates  must  be  filed  with  the  Secretary  of  State,  and 
the  other  with  the  secretary  of  the  corporation.  The  signature  of  president 
and  secretary  to  such  certificate  must  be  acknowledged  before  some  officer 

544 


DIGEST    OF    INCORPORATION    ACTS.  —  SOUTH    DAKOTA. 

authorized  to  take  acknowledgments,  who  knows  the  parties  signing  the  same 
to  be  the  president  and  secretary  of  the  corporation,  and  when  such  certificate 
is  filed  with  the  Secretary  of  State  he  shall  issue  a  certificate  of  amendment, 
setting  forth  in  what  particular  the  original  articles  of  incorporation  have  been 
amended  (Laws  of  1903,  chap.  106,  sees.  1-7  inclusive.  As  to  increase  of  stock 
see  Cons.,  Art.  XVII.  sec.  8). 

23.  Extension  of  Corporate  Existence.  —  Under  Laws  of  1903,  chap. 
105,  as  amended  by  Laws  of  1907,  chap.  106,  sec.  1,  special  provision  is  made 
for  the  extension  of  corporate  existence  for  a  period  not  to  exceed  twenty-five 
years.  To  effect  the  extension  such  application  must  be  signed  by  stockholders 
owning  three-fourths  of  the  capital  stock,  and  opposite  the  signature  of  each 
stockholder  shall  be  stated  the  number  of  shares  of  stock  owned  by  each.  The 
application  must  be  made  in  the  same  manner  as  articles  of  incorporation.  Be- 
fore presenting  this  application  to  the  Secretary  of  State,  the  corporation  must 
file  with  him  a  statement  verified  by  oath  of  the  president  and  secretary  of  the 
corporation,  setting  forth:  (1)  The  assets  and  liabilities  of  the  corporation; 
(2)  the  nature  of  its  business ;  (3)  the  number  of  shares  of  stock  issued  and 
outstanding;  (4)  the  number  of  shares  of  stock  subscribed  and  not  issued; 
(5)  the  names  and  post-office  addresses  of  each  stockholder  and  the  number 
of  shares  owned  by  each;  (6)  the  names  and  post-office  addresses  of  the 
directors. 

24.  Dissolution.  —  Voluntary  dissolution  is  effected  by  application  to 
the  Circuit  Court  of  the  county  where  the  corporation's  principal  place  of  busi- 
ness is  situated,  upon  verified  petition  of  a  majority  of  the  board  of  directors, 
the  proceedings  being  simple  and  brief.  The  application  must  set  forth  that  at 
a  meeting  of  the  stockholders  called  for  that  purpose  the  dissolution  of  the 
corporation  was  resolved  upon  by  a  vote  of  not  less  than  two-thirds  of  the  out- 
standing stock,  and  that  all  claims  and  demands  against  the  corporation  have 
been  satisfied  and  discharged  (C.  C,  sec.  446,  sub.  2  of  sub.  3  as  amended 
by  Laws  of  1907,  chap.  105).  Involuntary  dissolution  is  effected  under  Code 
of  Civil  Procedure  by  action  in  the  name  of  the  State  on  leave  of  the  Circuit 
Court  or  judge  (R.  C.  C,  sec.  446;  C.  L.,  sec.  2938;  see  also  Laws  of  1911, 
chap.  103). 

25.  Annual  License  Fee.  —  There  is  no  annual  license  fee. 

26.  Foreign  Corporations.  —  Before  any  corporation  can  transact  busi- 
ness within  the  State,  or  acquire,  hold,  and  dispose  of  property  within  the  State, 
or  sue  in  the  courts  therein,  it  must  file  and  record  in  the  office  of  the  Secretary 
of  State  a  duly  authenticated  copy  of  its  charter  or  articles  of  incorporation, 
and  shall  also  appoint  an  agent  within  the  State  upon  whom  process  may  be 
had.  A  duly  authenticated  copy  of  the  appointment  of  such  agent  or  officer 
must  be  filed  and  recorded  in  the  office  of  the  Secretary  of  State  and  register 
of  deeds  of  the  county  whore  said  agent  resides  (R.  C.  C,  sec.  883,  884;  C.  L., 
sees.  3190,  3191).  The  State  constitution  provides  that  no  foreign  corpora- 
tion shall  do  business  in  the  State  without  having  one  or  more  known  places  of 
business  and  an  authorized  agent  or  agents  in  the  same  upon  whom  proi 
may  be  served  (Cons.,  Art.  XVII.  sec.  6).  The  fee  for  filing  articles  and  issu- 
ance of  certificates  of  authority  to  do  business  is  $10.  For  recording  certifi- 
cates of  appointment  of  agent  and  issuing  certificates  of  appointment,  $10. 

Wright  v.  Lee  et  al.,  -»  s.  I).  237;  55  N'.  W.  931;  Acme  Mer.  Agenoy  i.  Roohford,  10 
S.D.203;  72N.W.466;  Foster  v.  Company,  6  8.  D.  27;  58N.W.9:  Peck  Mfg.  Co.  v.  Groves, 

0  S.  I).  504;  02  N.  W.  109;  F.  &  J.  Co.  v.  Foster,  4  Dak.  329;  Nut.  15ank  I).  CorkingS.  9  S.  1). 
614;  70  N.  \Y.  1059. 

35  K  I  K 


DIGEST    OF    INCORPORATION    ACTS.  —  TENNESSEE. 


TENNESSEE. 

(The  references  cited  below  are  to  the  Code  of  1884,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. 

—  The  Business  Corporation  Act  of  Tennessee  is  based  upon  the  Act  of  March 
19,  1875  (Session  Laws  of  1875,  chap.  142).  The  law  is  peculiar  in  that  it  spe- 
cifically prescribes  for  what  purposes  companies  may  be  incorporated,  and  sets 
forth  the  form  of  charter  for  each.  The  above  "Charter  Act "  has  been  amended 
from  time  to  time,  until  now  it  is  possible  to  incorporate  in  Tennessee  under 
said  act  for  all  ordinary  business  purposes  (Laws  of  1903,  chap.  474 ;  Laws  of 
1905,  chap.  174). 

2.  Incorporators.  —  Not  less  than  five,  except  for  brewery  corporations, 
where  only  three  incorporators  are  required.  There  are  no  residential  require- 
ments (sec.  1692;   Laws  of  1903,  chap.  474). 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  forms  for  draw- 
ing charters  are  set  out  at  length  in  the  statutes,  and  vary  according  to  the 
purposes  sought  to  be  obtained  by  incorporation.  Speaking  generally,  all  the 
forms  set  forth:  First,  name  of  the  corporation,  which  the  Secretary  of  State 
requires  shall  be  different  from  that  of  any  existing  corporation.  Second, 
the  purposes  must  be  set  forth,  and  the  incorporators  are  limited  strictly  to 
purposes  included  in  one  class.  Third,  the  amount  of  capital  stock,  with  the 
amount  and  par  value  thereof.  If  preferred  stock  is  to  be  issued,  provision 
should  be  made  therefor  as  provided  by  law.  The  charter  must  state  whether 
it  is  to  be  redeemed  at  not  less  than  par,  and  if  so  the  time  and  price  thereof 
(Laws  of  1905,  chap.  174).  The  amount  of  capital  stock  is  unlimited,  except 
in  the  case  of  brewery  companies,  which  latter  must  be  capitalized  for  not  less 
than  $5,000  and  not  more  than  $500,000.  Fourth,  an  enumeration  of  the 
general  powers  of  the  corporation,  which  are  in  substance  merely  an  enumera- 
tion of  common  law  powers.  The  statutory  form  also  contains  a  large  number 
of  provisions  for  the  regulation  of  the  internal  affairs  of  the  corporation.  In 
this  connection  provision  should  be  made  relative  to  by-laws,  powers,  and  pro- 
ceedings of  the  board  of  directors,  keeping  of  corporate  books,  the  assessments 
of  stock,  provisions  for  amendments  and  dissolution,  etc.  The  statute  also  pro- 
vides that  the  first  board  of  directors  shall  consist  of  the  incorporators  named 
in  the  charter  of  incorporation  (sees.  1692,  1852 ;  Laws  of  1897,  chap.  32  ;  Laws 
of  1899,  chaps.  17,  224,  300,  304 ;  Laws  of  1903,  chap.  474).  Duration  may  be 
unlimited,  if  desired. 

4.  Statutory  Powers.  —  The  statute  enumerates  the  common  law  powers 
of  corporations,  and  in  addition  thereto  grants  the  following  powers :  For  the 
purpose  of  repairs,  rebuilding,  or  to  meet  contingencies,  or  for  the  purpose  of 
a  sinking  fund,  corporations  may  establish  a  fund  of  which  they  may  loan,  and 
in  relation  to  which  they  may  take  proper  securities.  Mining  companies  are  au- 
thorized to  subscribe  for  stock  in  a  railway  corporation  whose  line  of  road  is 
contiguous  to  their  works.     Manufacturing  corporations  are  given  power  to 

.locate,  on  their  own  lands,  elevators,  hoisting,  warehouses,  transfer  trucks,  etc. 
They  are  also  given  power  to  purchase,  use,  or  dispose  of  patent  rights.  All 
corporations  are  given  power  to  vote  by  proxy  and  to  consolidate  with  other 
corporations  engaged  in  the  same  general  business;  also  to  sell  in  its  entirety 

546 


DIGEST    OF    INCORPORATION    ACTS. — TENNESSEE. 

all  the  assets  of  the  corporation  to  any  corporation  engaged  in  the  same  general 
line  of  business.  (See  references  cited  at  end  of  sec.  3;  also  sees.  1704,  1709- 
1711  a,  1853,  1860-1862,  1864,  1866-1868,  1872;  Act  of  March  28,  1887 ';  Laws 
of  1903,  chap.  486.)  Also  to  issue  preferred  stock  (Laws  of  1905,  chap.  174) ; 
to  vote  by  proxy  (Laws  of  1907,  chap.  104) ;  to  dispose  of  the  corporate  assets 
as  an  entirety  (Laws  of  1907,  chap.  437). 

5.  Procuring  the  Charter.  —  Incorporators  must  subscribe  and  ac- 
knowledge the  execution  of  the  charter,  which  is  in  fact  a  petition  for  incor- 
poration. The  charter  must  be  acknowledged  or  any  one  or  more  signatures 
proved  by  a  witness  before  the  clerk  of  the  county  court  (Laws  of  1903,  chap. 
474).  This  instrument  when  so  acknowledged  must  be  registered  in  the  county 
where  the  principal  office  of  the  company  is  situated,  and  also  in  the  office  of 
the  Secretary  of  State.  The  latter  officer  issues  a  certificate  of  registration, 
which  in  turn  must  be  registered  in  the  register's  office  of  the  county  where  the 
principal  business  office  of  the  company  is  situated.  If  agencies  are  established 
in  other  counties,  the  incorporation  papers  must  be  registered  there  (sec.  2027). 
Thereupon  the  formation  of  the  corporation  is  completed  (sees.  1692,  1694). 
Collateral  inquiry  into  the  legality  of  corporate  existence  is  forbidden  (sees. 
1693,  1712;   Laws  of  1903,  chap.  474). 

Shields  v.  Clifton  Co.,  94  Tenn.  123;  28  S.  W.  668. 

6.  Corporate  Indebtedness.  —  Corporations  are  limited  in  the  creation 
of  debts  to  the  amount  of  the  authorized  capital  stock  (sec.  1858 ;  Laws  of  1903, 
chap.  474). 

7.  Organization  Tax.  —  For  business  corporations  a  tax  of  one-tenth  of 
one  per  cent  on  the  authorized  capital  stock  is  exacted.  There  is  also  a  regis- 
tration tax  of  $10  (Act  of  June  17,  1895 ;  Laws  of  1897,  chap.  32 ;  Laws  of  1899, 
chap.  432). 

8.  Filing  and  Recording  Fees.  —  In  addition  to  the  payment  of  the  or- 
ganization tax,  the  Secretary  of  State  is  entitled  to  a  fee  of  $10  for  registering 
the  company.  In  lieu  of  issuing  a  certificate  of  incorporation,  the  Secretary  of 
State  attaches  his  certificate  of  registration  to  the  papers  recorded  in  his  office 
and  returns  them  to  the  incorporators.  For  issuing  certified  copy  of  the  articles 
of  incorporation  his  fee  is  $10.  The  fee  for  recording  in  the  local  county  regis- 
ter's office  averages  $3. 

9.  Commencing  Business.  —  Business  may  be  commenced  as  soon  as  the 
charter  is  registered  as  required  by  law  and  the  organization  completed.  If 
the  corporation  establishes  agencies  in  any  other  county,  the  charter  must  be 
recorded  there  (sec.  1694). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  State,  in  the  absence  of  any  statute  providing  otherwise.  The  incor- 
porators act  as  the  first  board  of  directors  (Laws  of  1903,  chap.  474). 

11.  Meetings  of  Stockholders  and  Directors.  —  Annual  stockholders' 
meetings  must  be  held  within  the  State.  Directors'  meetings  may  be  held 
without  the  State  if  the  by-laws  so  provide  (sees.  1706,  1863). 

Synnott  v.  Association,  117  Fed.  379;  54  C.  C.  A.  553. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications. — 
There  must  be,  except  in  the  case  of  brewery  companies,  where  there  may  be 
three,  at  least  five  directors.  There  are  no  residential  requirements  (sees.  1702, 
1706;  Laws  of  1903,  chap.  474). 

b.    Liabilities.  —  Directors  are  liable  for  illegal  declaration  of  dividends,  or 

547 


DIGEST    OF   INCORPORATION   ACTS.  —  TENNESSEE. 

for  authorizing  the  creation  of  any  indebtedness  in  excess  of  the  capital  stock 
paid  in.  Directors  are  liable  for  loans  to  stockholders  in  mining  corporations, 
quarrying,  boring,  or  manufacturing  companies;  they  are  also  liable  for  in- 
tentional fraud  in  failing  to  comply  substantially  with  the  articles  of  incorpo- 
ration, or  in  deceiving  the  public  or  individuals  in  relation  to  their  liabilities 
(sees,  1716,  1717,  1856-1858,  1859;  Laws  of  1897,  chap.  49;  Jaws  of  1903, 
chap.  474).  Directors  are  liable  for  contributing  corporate  funds  for  political 
purposes  (Laws  of  1907,  chap.  402). 

Allison  v.  Coal  Co.,  87  Tenn.  60;  9  S.  W.  226. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  the  amount 
of  their  unpaid  stock  subscriptions.  They  are  also  jointly  and  severally  liable 
for  moneys  due  or  owing  to  the  laborers,  servants,  clerks,  or  operators  of  the 
company  in  case  the  corporation  becomes  insolvent  (sees.  1708,  1858;  Laws  of 
1903,  chap.  474). 

14.  Stock  Certificates.  —  The  par  value  of  stock  certificates  may  be  $100 
or  less  (sec.  2052).  Each  shareholder  is  entitled  to  a  certificate  showing  the 
number  of  shares  held  by  him,  signed  by  such  officers  as  the  by-laws  may 
prescribe. 

15.  Preferred  Stock.  —  Capital  stock  may  be  divided  into  common  and 
preferred  stock,  provided  it  shall  be  stated  in  the  charter  of  incorporation  to- 
gether with  the  respective  amounts  of  each,  and  provided  the  preferred  stock 
does  not  exceed  two-thirds  of  the  total  authorized  capital  stock,  and  provided 
further  that  the  capital  stock  shall  be  issued  only  for  cash.  It  must  be  stated 
in  the  charter  of  incorporation  whether  the  preferred  stock  is  subject  to  re- 
demption at  not  less  than  par,  and,  if  so,  the  time  and  price  of  such  redemption. 
Preferred  stockholders  are  entitled  to  receive  a  fixed  yearly  dividend  not  ex- 
ceeding ten  per  cent,  payable  annually  or  semi-annually,  before  any  dividend 
can  be  paid  on  the  common  stock,  and  such  dividend  may  be  made  cumula- 
tive. No  preferred  stock  can  be  issued  except  by  authority  given  to  the  board 
of  directors  by  a  vote  of  at  least  two-thirds  of  the  common  stock  at  a  meeting 
duly  called  for  that  purpose,  nor  shall  preferred  stockholders  have  any  voting 
powers  except  such  as  may  be  given  by  a  two-thirds  vote  of  the  common  stock- 
holders. If  there  are  more  than  two  classes  of  stock,  each  share  must  have 
written  or  printed  thereon  the  words  "common  stock"  and  "preferred  stock" 
(Laws  of  1905,  p.  373). 

16.  Payment  of  Capital  Stock.  —  In  the  case  of  mining,  quarrying,  bor- 
ing, and  manufacturing  companies  nothing  but  cash  or  land  at  a  fair  cash  valu- 
ation can  be  accepted  in  payment  of  capital  stock  (sec.  2335).  Manufacturing 
companies  are,  however,  authorized  to  receive  an  assignment  of  a  patent  in 
payment  of  stock  subscribed  to  the  amount  of  the  value  of  such  patent  (sec. 
2351).  The  act  specifically  provides  that  the  amount  of  any  unpaid  stock  due 
from  the  subscriber  to  the  corporation  shall  be  a  fund  for  the  payment  of  any 
debts  due  from  the  corporation;  the  transfer  of  stock  by  any  subscriber  does 
not  relieve  liim  from  payment  unless  his  transferee  has  paid  up  all  or  any  of 
the  balance  due  on  said  original  subscription  (sees.  1708,  1856,  1872;  Laws  of 
1903,  chap.  474).  Construction  companies  are  authorized  to  receive  stock  and 
bonds  in  payment  for  their  capital  stock  (Laws  of  1905,  chap.  479). 

Searight  v.  Payne,  6  Lea,  283;    Kelley  v.  Fletcher,  94  Tenn.  1;    28  S.  W.  1099. 

17.  Books.  —  The  act  requires  the  keeping  of  books  showing  the  list  of 
stockholders,  with  their  respective  interests,  the  amount  paid  on  shares  sub- 

548 


DIGEST    OF   INCORPORATION    ACTS.  —  TENNESSEE. 

ecribed,  and  all  stock  transfers  by  and  to  whom  made  (sec.  1707;    Laws  of 
1903,  chap.  474). 

18.  Office  and  Agent. — There  are  no  express  statutory  provisions  re- 
quiring the  maintenance  of  an  office  and  agent  within  the  State.  By  impli- 
cation, however,  the  company  must  maintain  a  domiciliary  office  within  the 
State.    (See  sec.  lOgS.^ 

19.  Reports.  —  By  acts  adopted  previous  to  1903  semi-annual  statements 
are  required  of  banks  and  trust  companies,  and  annual  statements  of  building 
and  loan  companies,  mining,  quarrying,  boring,  and  manufacturing  companies. 
Annual  statements  are  required  of  all  corporations  securing  their  charters  under 
the  Act  of  1903  (Laws  of  1903,  chap.  474).  The  report  must  be  published  in  a 
newspaper  printed  in  the  county  where  the  principal  office  or  business  is  located, 
showing  the  amount  of  capital  stock,  existing  liabilities,  and  list  of  names  of 
stockholders.  Without  expressly  repealing  chap.  474  of  the  Laws  of  1903,  the 
Tennessee  Legislature  in  1907  (Laws  of  1907,  chap.  684)  passed  an  act  requir- 
ing each  domestic  corporation  to  prepare  and  file  annually  on  or  before  the  1st 
day  of  July  in  the  office  of  the  Secretary  of  State  a  written  statement  signed 
by  its  president  or  vice-president,  and  attested  by  its  corporate  seal  and  sworn 
to  by  either  its  secretary  or  president,  containing  the  following  information,  to 
wit :  The  name  and  style  of  the  corporation  and  its  principal  office  or  place 
of  business  in  the  State  of  Tennessee,  if  it  be  a  domestic  corporation ;  if  it  be 
a  foreign  corporation,  its  principal  office  or  place  of  business  in  the  State  of  its 
creation  and  also  in  Tennessee ;  the  amount  of  its  capital  stock  authorized  by 
its  charter  and  the  amount  of  capital  stock  issued  and  outstanding ;  the  names 
of  its  principal  officers,  to  wit,  its  president,  vice-president  or  vice-presidents, 
secretary,  and  treasurer,  and  a  complete  list  of  its  board  of  directors;  and,  finally, 
the  nature  and  character  of  the  business  in  which  it  is  engaged. 

20.  Anti-Trust  Statute.  —  There  is  an  anti-trust  statute  in  force  in  Ten- 
nessee. (See  Act  of  March  10,  1890 ;  Act  of  March  30,  1891 ;  Act  of  April  30, 
1897;   Laws  of  1905,  chap.  479;   Laws  of  1907,  chap.  36.) 

21.  Statutory  Grounds  for  Forfeiture  of  Charter. — Charters  may  be 
forfeited  where  the  corporation  has  by  neglect,  non-user,  abuse,  or  surrender 
forfeited  its  corporate  rights.  Any  act  of  the  board  of  directors  as  a  board  con- 
stituting an  express  violation  of  the  statute  is  declared  to  be  a  forfeiture  of  the 
charter  (sees.  1718,  4162;   see  also  sec.  2484;   Code  of  1896,  sec.  6625). 

22.  Amendments.  —  Any  corporation  may  change  its  name,  increase  its 
capital  stock,  or  obtain  any  powers  granted  by  law,  by  the  board  of  directors 
preparing  a  certificate  and  making  application  to  the  Secretary  of  State  in  these 
words: 

"We,  the  undersigned,  comprising  the  Board  of  Directors  of Corpora- 
tion, apply  to  the  State  of  Tennessee  by  virtue  of  the  General  Laws  of  the  country 
for  amendment  to  said  charter  of  incorporation  for  the  purpose  of  investing  said 
corporation  with  the  power"  (here  state  the  clause  in  the  general  law  aforesaid 
which  is  desired  as  an  amendment,  or  if  it  be  simply  to  change  the  name,  so 
state  the  fact). 

"Witness  our  hands  this day  of "  (to  be  signed  by  the  directors). 

This  instrument  must  be  acknowledged,  and  a  certificate  of  alteration,  given 
by  the  Secretary  of  State  under  the  great  seal  of  the  State,  shall  complete  the 
amendment  to  such  corporation.  The  amendment  must  be  registered  in  all 
respects  the  same  as  the  original  charter  (Code  of  Tennessee,  1896,  sees.  2028, 
2029,  2344;  Laws  of  1907,  chap.  304). 

549 


DIGEST    OF    INCORPORATION    ACTS.  —  TENNESSEE. 

23.  Extension  of  Corporate  Existence.  —  Perpetual  existence  is  open 
to  incorporators,  if  they  desire  it.  There  is  no  provision  for  the  extension  of 
corporate  existence. 

24.  Dissolution.  —  The  corporation  may  be  dissolved  on  application  to 
the  courts.  Directors  are  by  statute  made  trustees  for  that  purpose,  unless 
other  persons  are  appointed  by  the  court  (sees.  1719-1723;  Act  of  March  28, 
1887.  As  to  sale  of  entire  corporate  assets  and  provision  for  the  protection 
of  minority  stockholders  in  case  of  said  sale,  see  Laws  of  1907,  chap.  437). 

25.  Annual  License  Tax.  —  On  or  before  the  1st  day  of  July  in  each 
year  all  domestic  business  corporations  must  pay  to  the  Secretary  of  State  the 
following  annual  license  taxes :  Where  the  authorized  capital  stock  is  $25,000 
or  less,  $5;  where  it  is  more  than  $25,000  and  not  more  than  $50,000,  $10; 
where  it  is  more  than  $50,000  and  less  than  $100,000,  $20 ;  where  it  is  more  than 
$100,000  and  less  than  $250,000,  $30;  where  it  is  over  $250,000  and  less  than 
$500^000,  $50;  over  $500,000  and  less  than  $1,000,000,  $100;  over  $1,000,000, 
$150  (Laws  of  1907,  chap.  434). 

26.  Foreign  Corporations.  —  Every  foreign  corporation  upon  applying  for 
a  permit  to  do  business  in  the  State  must  pay  into  the  office  of  the  Secretary  of 
State  a  tax  upon  its  authorized  capital  stock  as  follows,  to  wit:  Companies  of 
$50,000  or  less,  $50;  over  $50,000  and  less  than  $100,000,  $100;  over  $200,000 
and  less  than  $300,000,  $200;  over  $300,000  and  less  than  $400,000,  $250;  over 
$400,000  and  less  than  $500,000,  $300;  over  $500,000  and  less  than  $750,000, 
$400;  over  $750,000  and  less  than  $1,000,000,  $500;  over  $1,000,000  and  less 
than  $2,000,000,  $750;  over  $2,000,000  and  less  than  $5,000,000,  $1000;  over 
$5,000,000  they  shall  pay  a  fee  of  $1500;  provided  that  any  company  chartered 
under  the  laws  of  another  State  desiring  to  locate  its  principal  office  and  do 
all  of  its  business  in  and  from  Tennessee,  and  have  all  of  its  main  property  hold- 
ings in  Tennessee,  shall  pay  a  privilege  tax  of  one-tenth  of  one  per  centum  on 
the  authorized  capital  stock,  just  as  domestic  corporations  are  now  required  to 
do;  provided  also  that  insurance  companies  shall  be  credited  by  the  amount 
of  fees  paid  to  the  Insurance  Commissioner  upon  entering  the  State  to  do  busi- 
ness (Laws  of  1909,  chap.  504).  Foreign  corporations  must  pay  the  same 
annual  license  tax  as  is  required  of  domestic  corporations.  (See  ante,  sec.  25.) 
For  filing  charter  of  foreign  corporation  the  Secretary  of  State  is  entitled  to 
a  fee  of  $20 ;  for  each  abstract  thereof,  $20  (sees.  2546,  2553 ;  Laws  of  1895, 
chap.  21; 'sec.  119,  Laws  of  1899,  chap.  2;  Laws  of  1899,  chaps.  14-31;  Laws 
of  1903,  chap.  239). 

State  v.  Schlitz  Brewing  Co.,  104  Tenn.  715;  59  S.  W.  1033;  L.  P.  Co.  v.  City  of  Nash- 
ville (Tenn.),  84  S.  W.  810;  N.  &  S.  Co.  v.  Lloyd  (Tenn.),  76  S.  W.  911;  State  v.  Company, 
(Tenn.),  86  S.  W.  390. 


550 


DIGEST    OF    INCORPORATION    ACTS.  —  TEXAS. 

TEXAS. 
(The  references  cited  below  are  to  the  Revised  Statutes,  1895,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Texas  is  to  be  found  in  the  Revised  Statutes 
of  1895,  sees.  640-670  inclusive,  sees.  680-686,  sees.  744-749  c,  and  the 
amendments  of  1897,  1899,  1900,  1901,  1903,  1905,  and  1907.  Special  Acts 
are  provided  for  railroad  and  insurance  corporations.  Under  the  General  Act 
corporations  are  divided  into  some  seventy-one  different  classes,  covering  almost 
all  lines  of  business  (sec.  642;  Laws  of  1907,  chaps.  9,  23,  150,  151). 

Hamilton  v.  Company,  15  Texas  App.  338;  39  S.  W.  641. 

2.  Incorporators.  —  Three  or  more  persons.  Two  must  be  citizens  of 
Texas  (sees.  641,  644). 

Hamilton  v.  Company,  15  Texas  App.  338;  39  S.  W.  641. 

3.  Contents  of  the  Articles  of  Incorporation.  —  The  articles  must  set 
forth: 

a.  Name.  —  No  corporation  can  be  incorporated  under  a  name  already  in 
use  by  a  domestic  corporation. 

b.  Pitrposes.  —  Corporations  are  limited  in  their  purposes  to  those  named 
in  some  one  of  the  seventy-one  classes  specifically  named  in  the  classification  of 
purposes  for  which  a  corporation  may  be  incorporated,  except  that  in  certain 
enumerated  cases  where  the  corporation  act  expressly  permits  incorporation  for 
more  than  one  purpose.  (See  sec.  642,  sub.  1-71.)  The  cases  here  referred  to 
are  as  follows:  Provided  corporations  may  be  formed  for  two  or  more  of  the 
purposes  following,  namely,  the  construction  of  bridges  and  the  maintenance  of 
mills  and  gins;  the  manufacture  and  supply  to  the  public  of  ice,  gas,  light, 
heat,  water,  and  electric  motor  for  power  or  use  in  connection  with  such  mills 
and  gins  or  either;  the  harvesting  of  grain  or  the  harvesting  and  threshing  of 
grain;  provided  that  the  authorized  capital  stock  of  all  such  corporations  shall 
not  exceed  8250,000  (Laws  of  1903,  p.  227).  Corporations  may  also  be  created 
for  two  or  more  of  the  following  purposes,  namely,  the  supply  of  water  to  the 
public,  the  manufacture  and  supply  of  ice,  electric  light  and  motor  power,  or 
either  of  them,  to  the  public,  and  the  manufacture,  supply,  and  sale  of  car- 
bonated water  and  the  operation  of  cottonseed-oil  mills,  provided  that  all 
private  corporations  including  one  or  more  of  the  purposes  mentioned  in  this 
article  in  their  charter  shall  each  pay  a  franchise  tax  as  provided  by  law  on  each 
of  the  purposes  included  in  their  respective  charters,  and  provided  further  that 
the  authorized  capital  stock  of  corporations  authorized  by  this  article  shall 
not  exceed  8200,000,  and  the  provisions  of  the  act  shall  not  apply  to  cities  of 
over  ten  thousand  inhabitants  (650  a  and  650  b;  see  also  Laws  of  1905,  chaps. 
24,  53;  Laws  of  1907,  pp.  292-294;  see  also  Laws  of  1911,  chaps.  22,  111;  see 
Borden  v.  Company,  82  S.  W.  463). 

c.  Domiciliary  Office.  —  Place  or  places  where  the  business  is  to  be 
transacted. 

d.  Duration.  —  Term  for  which  it  is  to  exist  not  to  exceed  fifty  years. 
Where  no  period  is  limited  the  duration  is  twenty  years  (Laws  of  1907,  chap. 
158). 

551 


DIGEST    OF    INCORPORATION    ACTS. TEXAS. 

e.  Directors.  —  Number  and  names  and  residences  of  the  board  for  the  first 
year  (Laws  of  1907,  chap.  158).  The  number  of  directors  shall  be  not  less  than 
three,  nor  more  than  twenty-one  (Laws  of  1909,  chap.  115). 

/.  Capital  Stock.  —  Amount  thereof  and  number  of  shares  into  which  it  is 
divided  (sec.  643).  Both  capital  stock  and  par  value  thereof  may  be  any 
amount  (sec.  633 ;   see  also  Laws  of  1907,  chap.  166). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers  of  corporations,  the  following  additional  powers  are  granted: 
To  vote  by  proxy,  to  forfeit  stock  for  non-payment  of  assessments,  to  issue 
preferred  stock,  and  to  authorize  directors  to  adopt  by-laws  (sees.  651-653,  668, 
669;  Laws  of  1907,  chap.  158;  Laws  of  1909,  chap.  115).  Corporations  may  be 
formed  to  own  and  hold  stock  in  manufacturing  companies  (sees.  642  s.  d.  49; 
see  also  Laws  of  1903,  chap.  94) ;  also  to  transact  business  in  other  States  and 
countries  (sec.  642,  Laws  of  1901,  chap.  43). 

5.  Procuring  the  Charter.  —  The  articles  must  be  subscribed  and  acknowl- 
edged by  each  of  the  incorporators,  before  application  can  be  made  to  the 
Secretary  of  State  for  the  issuance  of  a  charter.  Stock  must  be  subscribed  in 
good  faith  to  the  full  amount  of  the  authorized  capital  stock,  and  fifty  per  cent 
thereof  must  be  paid  in  before  said  corporation  can  be  chartered.  At  the  time 
that  the  articles  of  incorporation  are  presented  to  the  Secretary  of  State  for  filing 
and  recording  in  his  office,  they  must  be  accompanied  by  evidence  satisfactory 
to  the  Secretary  of  State  that  the  full  amount  of  the  authorized  capital  stock 
has  in  good  faith  been  subscribed  and  fifty  per  cent  thereof  paid  in  cash  or  its 
equivalent  in  property  (Laws  of  1907,  p.  309.  The  sub.  56  of  section  642  seems 
to  have  been  amended  by  Laws  of  1907.  p.  309).  When  this  evidence  has  been 
presented  and  payment  has  been  made  of  all  recording  and  filing  fees,  of  the 
organization  tax  and  of  the  portion  of  the  annual  francliise  tax  due  for  the  re- 
maining portion  of  the  State  fiscal  year,  then  the  Secretary  of  State  is  authorized 
to  receive,  file,  and  record  the  articles  in  his  office  and  to  give  a  certificate  show- 
ing the  record  thereof.  As  to  what  constitutes  satisfactory  evidence  relative  to 
the  payment  of  fifty  per  cent  of  the  authorized  capital  stock,  the  statute  provides 
as  follows :  Satisfactory  evidence  shall  consist  of  the  affidavit  of  those  executing 
the  charter,  stating  therein  (1)  The  name,  residence,  and  post-office  address  of 
each  subscriber  to  the  capital  stock  of  such  company;  (2)  the  amount  sub- 
scribed by  each  and  the  amount  paid  by  each ;  (3)  the  cash  value  of  any  property 
received,  giving  the  description,  location,  and  from  whom  and  the  price  at  which 
it  was  received;  (4)  the  amount,  character,  and  value  of  labor  done,  from  whom 
and  price  at  which  it  was  received;  provided,  that  if  the  Secretary  of  State  is 
not  satisfied  he  may,  at  the  expense  of  the  incorporators,  require  other  and  more 
satisfactory  evidence  before  he  shall  be  required  to  receive,  file,  and  record  said 
charter;  and  provided  further,  that  the  corporations  created  under  sections  21, 
29,  37,  54,  and  61  of  the  Article  642,  Revised  Statutes  of  this  State,  are  exempt 
from  the  provisions  of  this  section ;  provided  further,  that  the  provisions  of 
this  act  shall  not  apply  to  corporations  formed  for  the  construction,  purchase, 
and  maintenance  of  mills  and  gins  having  a  capital  stock  of  not  exceeding 
$15,000,  nor  to  mutual  building  and  loan  associations,  nor  to  water  works, 
ice  plants,  electric-light  plants,  and  cotton  warehouses  in  cities  of  less  than 
ten  thousand  inhabitants  (Laws  of  1907,  chap.  166). 

6.  Corporate  Indebtedness.  —  Corporate  indebtedness  cannot  be  created 
in  excess  of  the  amount  of  the  authorized  capital  stock  (sec.  653). 

7.  Organization  Tax.  —  For  ordinary  business  corporations  (exclusive  of 

552 


DIGEST    OF    INCORPORATION    ACTS.  —  TEXAS. 

public  service  and  eleemosynary  corporations)  the  organization  tax  is  $50. 
provided  that  if  the  authorized  capital  stock  of  such  corporation  shall  exceed 
$10,000  it  shall  be  required  to  pay  an  additional  fee  of  S10  for  each  addi- 
tional §10,000  of  its  authorized  capital  stock  or  fractional  part  thereof  after 
the  first  (sec.  2439,  as  amended  by  Laws  of  1909,  chap.  4,  sec.  1).  Before  filing 
its  articles  of  incorporation  the  corporation  must  pay  not  only  the  organization 
tax,  but  also  pay  the  fractional  part  of  its  annual  franchise  tax,  corresponding 
to  the  length  of  time  before  the  next  following  1st  day  of  May  (Laws  of  1907, 
Special  Session,  chaps.  22,  23). 

8.  Filing  and  Recording  Fees.  —  The  payment  of  the  organization  tax 
includes  the  filing  and  recording  fees.  The  charge  for  certified  copy  of  the 
articles  of  incorporation  is  15  cents  for  each  one  hundred  words  and  $1  for 
certificate  issued  by  the  Secretary  of  State. 

9.  Commencing  Business.  —  Whenever  a  private  domestic  corporation 
is  chartered  in  this  State,  and  whenever  a  foreign  corporation  is  authorized  to 
do  business  in  this  State,  such  corporation  shall  be  required  to  pay  in  advance 
to  the  Secretary  of  State,  as  its  franchise  tax  from  that  time  down  to  and 
including  the  30th  day  of  April  next  following,  only  such  proportionate  part 
of  its  annual  franchise  tax  as  the  period  of  time  between  the  date  of  filing 
of  its  articles  of  incoq^oration  or  the  issuance  of  its  permit  to  do  business,  as 
the  case  may  be,  and  the  1st  day  of  May  next  following  bears  to  a  calendar 
year.  (See  post,  sec.  25 ;  also  Laws  of  1907,  chap.  23,  Special  Session.)  Busi- 
ness may  be  commenced  as  soon  as  the  Secretary  of  State  has  issued  a  certificate 
showing  payment  of  all  fees  and  taxes  and  the  filing  and  recording  of  the 
articles  of  incorporation  in  his  office.  By  reference  to  sec.  4  {ante,  sec.  4),  it  will 
be  seen  that  the  articles  cannot  be  received  for  record  until  the  entire  amount 
of  the  capital  stock  has  been  subscribed  for  in  good  faith  and  fifty  per  cent 
thereof  paid  in.  The  balance  of  the  authorized  capital  stock  must  be  paid  in 
within  two  years  from  the  date  of  the  filing  of  the  articles  in  the  office  of  the 
Secretary  of  State.  Proof  of  this  fact  must  be  furnished  the  Secretary  of  State 
in  the  same  manner  as  is  required  with  reference  to  the  payment  of  the  first 
fifty  per  cent  of  the  authorized  capital  stock  at  the  time  the  articles  are  filed 
(Laws  of  1907,  Special  Session,  chap.  166).  Business  must  be  commenced 
within  three  years  of  the  filing  of  the  charter,  or  the  latter  will  be  thereby 
forfeited  and  the  corporation  dissolved  (Laws  of  1907,  Special  Session,  chap. 
166). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  State.  The  statute  makes  no  provision  for  the  organization  of 
the  corporation. 

11.  Meetings  of  Stockholders  and  Directors.  —  Meetings  of  stock- 
holders must  be  held  within  the  State  at  such  time  and  place  as  the  by-laws 
of  the  corporation  may  require.  Directors'  meetings  may  be  held  without  the 
State  if  the  by-laws  so  provide. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications. — 
There  must  be  at  least  three  and  not  more  than  thirteen  directors.  There  are  no 
residential  requirements  (sec.  651,  sub.  8).  By-laws  may  be  adopted  by  the 
directors  subject  to  the  control  of  the  stockholders  (sec.  657;  Laws  of  1907, 
chap.  158). 

b.  Liabilities.  —  Directors  are  liable  for  knowingly  declaring  illegal  divi- 
dends. The  extent  of  their  liability  is,  however,  limited  to  the  amount  of  such 
dividends  (sec.  670).     Directors  are  also  liable  for  violation  of  the  Anti-Trust 

553 


DIGEST    OF    INCORPORATION    ACTS. TEXAS. 

Acts.  (See  Laws  of  1907,  chaps.  12,  97,  120,  173 ;  chap.  10,  Special  Session.) 
Directors  are  also  liable  for  diversion  of  corporate  assets  and  for  intentional 
violation  of  law,  unless  within  one  year  of  such  violation  they  have  caused  to 
be  entered  upon  the  records  of  the  board  of  directors  within  the  State  of  Texas 
an  order  repudiating  the  wrong  and  permanently  dismissing  from  their  service 
all  persons  directly  or  indirectly  connected  with  such  violation  (Laws  of  1907, 
chap.  166). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent  of 

their  unpaid  stock  subscriptions  (sec.  686). 

M  B  C  Co.  v.  Company,  89  Texas,  511;  39  S.  W.  1047;  Cole  v.  Adams,  92  Texas,  171; 
46  S.  W.  790. 

14.  Stock  Certificates.  —  Stockholders  are  entitled  to  certificates  showing 
the  number  of  shares  owned  by  them,  signed  by  such  officers  as  the  by-laws 
may  prescribe. 

15.  Preferred  Stock.  —  The  right  to  issue  preferred  stock  is  only  given 
in  express  terms  to  corporations  organized  for  the  purpose  of  storing,  trans- 
porting, buying,  and  selling  oil,  gas,  salt,  brine,  and  other  mineral  solutions. 

16.  Payment  of  Capital  Stock.  —  Stock  can  be  issued  only  for  money 
paid,  labor  done,  or  property  actually  worth  at  least  the  sum  for  which  it 
was  taken  by  the  company  (Laws  of  1907,  chap.  166;  Cons.,  Art.  XII.  sec.  6). 

17.  Books.  —  A  stock  register,  transfer  book,  and  record  of  business  trans- 
actions must  be  kept  (statute  does  not  provide  where  to  be  kept),  and  the 
books  and  records  must  be  open  to  inspection  of  stockholders  at  all  reasonable 
times.  By  inference  from  reading  sec.  5  of  chap.  166  of  Laws  of  1907  it  appears 
to  be  necessary  that  the  corporation  minute  book  should  be  kept  within 
the  State.  The  secretary  must  furnish  to  any  creditor  or  his  attorney,  in  an 
action  to  enforce  stockholders'  liability,  a  list  of  stockholders,  with  residences 
and  amounts  of  holdings  (sec.  672 ;  see  also  Cons.,  Art.  X.  sec.  3).  The  Attorney- 
General  or  any  of  his  assistants  or  representatives,  when  authorized  in  writing 
by  the  Attorney-General,  shall  have  the  power  and  authority  to  make  diligent 
investigation  into  the  organization,  conduct,  and  management  of  any  corpora- 
tion authorized  to  do  business  within  this  State,  and  shall  have  the  power  to 
examine  or  inspect  all  or  any  of  the  books,  accounts,  records,  minutes,  letters, 
memoranda,  documents,  checks,  vouchers,  telegrams,  constitution,  and  by-laws 
of  such  corporation,  and  take  copies  of  any  or  all  of  such  records  or  documents 
herein  set  forth  as  in  his  judgment  may  show  or  tend  to  show  that  said  corpora- 
tion has  been  or  is  engaged  in  acts  or  conduct  in  violation  of  any  law  of 
this  State;  provided  that  the  Attorney-General  or  his  assistant  or  assistants, 
or  representative  or  representatives,  shall  not  make  public  or  use  such  copies, 
or  any  information  derived  in  the  course  of  said  examination  of  said  records  or 
documents  as  herein  above  set  forth,  except  in  the  course  of  some  judicial 
proceedings  of  which  the  State  is  a  party,  or  in  a  suit  by  the  State  to  cancel 
the  permit  or  forfeit  the  charter  of  such  corporation,  or  to  collect  penalties 
for  a  violation  of  the  law  of  this  State,  or  for  the  information  of  any  of  the 
officers  of  this  State  charged  with  the  enforcement  of  its  laws  (Laws  of  1907, 
chap.  21). 

18.  Office  and  Agent.  —  An  office  must  be  kept  in  the  State,  and  an  agent 
therein  upon  whom  process  may  be  served  (sees.  673,  1222,  1223 ;  Cons.,  Art.  X.). 

Beattie  v.  Hardy,  93  Texas,  131. 

19.  Reports.  —  The  directors  shall,  when  required  by  one-third  of  the 

554 


DIGEST    OF    INCORPORATION    ACTS.  —  TEXAS. 

stockholders,  make  report  showing  amount  of  company's  business,  etc.  An- 
nual reports  are  required  (see  sec.  25,  post.  For  reports  required  in  connection 
with  payment  of  annual  franchise  tax,  see  Laws  of  11)07,  pp.  502  to  508). 

20.  Anti-Trust  Statute.  —  Texas  has  enacted  a  bountiful  collection  of  the 
most  drastic  anti-trust  statutes  to  be  found  anywhere  within  the  country.  (See 
Laws»of  1907,  chaps.  12,  97,  120,  173,  and  chap.  10  of  the  Special  Session.) 

21.  Statutory  Grounds  for  Forfeiture  cf  Charter.  —  Charters  may  be 
forfeited  for  violation  of  the  Anti-Trust  Act,  or  for  acts  of  misuser  or  non-user, 
or  for  failing  to  organize  and  commence  business  within  three  years  from  date 
of  incorporation  (see  Laws  of  1903,  chap.  92) ;  also  for  failure  to  pay  annual 
franchise  taxes  (Laws  of  1909,  p.  224;  Laws  of  1911,  chap.  21).  Charters  may 
be  forfeited  by  failure  to  pay  up  the  full  amount  of  authorized  capital  stock 
witliin  two  years  (Laws  of  1907,  chap.  166);  also  for  express  violations  of  law 
whereby  it  is  provided  charter  should  be  forfeited  without  judicial  ascertainment 
(Laws  of  1907,  chap.  166);  and  may  also  be  forfeited  for  contributing  corporate 
funds  for  political  purposes  and  for  further  employing  the  assets  in  other  than 
the  legitimate  objects  of  the  corporation's  creation  (Laws  of  1907,  chap.  166). 

22.  Amendments.  —  Charters  may  be  amended  in  any  respect  desired, 
except  to  so  change  the  original  purpose  as  to  prevent  the  execution  thereof, 
or  to  decrease  the  capital  stock  (sees.  647,  649,  651,  652).  The  act  provides 
that  the  articles  may  be  amended  by  filing  copies  of  such  amendments  with 
the  Secretary  of  State  in  the  manner  required  in  the  case  of  original  charters 
(sec.  647).  The  act  unquestionably  contemplates  action  by  the  stockholders 
at  a  meeting  convened  for  that  purpose  in  order  to  make  the  amendment  effec- 
tive. It  also  undoubtedly  contemplates  the  making  of  a  certificate  by  the 
president  or  other  officer  of  the  corporation,  showing  the  manner  in  which  the 
amendment  was  adopted.  The  act  also  provides  that  the  number  of  directors 
may  be  increased  or  diminished  to  any  number  not  less  than  three  nor  more 
than  tliirteen  by  a  vote  of  the  stockholders  cast  as  the  by-laws  may  provide. 

To  increase  the  capital  stock  to  any  amount  not  exceeding  at  any  one  time 
double  the  amount  of  its  authorized  capital  requires  the  vote  of  the  stockholders 
cast  in  conformity  with  the  by-laws,  and  if  a  majority  of  the  stockholders  shall 
vote  for  the  increase  of  such  stock  the  same  may  be  increased  by  the  board  of 
directors.  Upon  such  increase  of  stock  being  made  in  accordance  with  the 
by-laws,  the  date  and  amount  shall  be  certified  to  the  Secretary  of  State  by  the 
directors,  and  from  the  time  such  certificate  is  filed  the  increase  of  stock  shall 
become  a  part  of  the  capital  thereof.  Such  certificate  shall  be  filed  and  recon  lei  1 
in  the  same  manner  as  the  original  charter  (sec.  652).  The  following  provision 
relative  to  the  increase  or  decrease  of  capital  stock  is  to  be  found  in  chap.  166 
of  the  Laws  of  1907,  to  wit:  A  corporation  may  increase  its  authorized  capital 
by  a  two-thirds  vote  of  all  its  stock;  and  when  such  vote  is  given  in  favor  of 
the  increase  the  same  may  be  done  by  the  board  of  directors,  trustees,  or  man- 
aging board  of  such  corporation;  and  upon  such  increase  of  stock  being  made 
in  accordance  with  the  above  provisions  and  certified  to  the  Secretary  of  State 
by  the  directors,  together  with  satisfactory  proof,  which  shall  be  the  affidavit 
of  the  directors,  showing  that  the  full  amount  of  the  increase  has  been  in  good 
faith  subscribed  and  fifty  per  cent  thereof  paid,  and  in  other  respects  conform- 
ing to  the  proof  required  as  on  an  original  application  for  charter;  or  showing 
that  such  portion  thereof  has  been  subscribed,  or  subscribed  and  paid  in,  as  is 
required  for  the  corporation,  thus  increasing  its  stock;  and  if  the  Secretary 
of  State  is  satisfied  that  the  increase  of  stock  has  been  made  in  accordance 

555 


DIGEST    OF    INCORPORATION    ACTS. TEXAS. 

with  law,  and  that  the  requirements  of  the  law  have  been  complied  with  as  to 
the  subscription  and  payment  of  stock  and  other  respects  as  on  an  original 
application  for  charter,  he  shall  file  such  certificate  of  increase,  and  thereupon 
the  same  shall  become  a  part  of  the  capital  stock  of  such  corporation ;  and  in 
case  of  failure  by  the  stockholders  to  pay  the  unpaid  portion  of  the  increase 
within  two  years  from  the  date  of  filing  of  sucn  certificate  of  increase  in  the 
office  of  the  Secretary  of  State,  the  charter  of  such  company  shall  be  forfeited 
and  the  provisions  of  sec.  2  of  this  act  shall  govern  same  as  in  case  of  an  original 
creation  of  a  corporation ;  provided,  that  a  corporation  may  decrease  its  capital 
stock  by  such  amount  as  its  stockholders  may  decide  by  a  two-thirds  vote  of 
all  its  outstanding  stock,  in  like  manner  as  is  required  for  an  increase  as  above 
provided,  but  no  such  decrease  shall  prejudice  the  rights  of  any  creditor  of 
such  corporation  in  any  claim  or  cause  of  action  as  such  creditor  may  have 
against  the  company,  or  the  stockholder  or  director  thereof ;  nor  shall  such 
decrease  become  effective  until  full  proof  is  made  by  the  affidavit  of  the  directors 
to  the  Secretary  of  State  of  the  financial  condition  of  such  corporation,  giving 
therein  all  its  assets  and  liabilities,  with  names  and  post-office  addresses  of  all 
creditors  and  amount  due  each,  and  the  Secretary  of  State  may  require  as  a 
condition  precedent  to  the  filing  of  such  certificate  of  decrease  that  the  debts 
of  such  corporation  be  paid  or  reduced. 

23.  Extension  of  Corporate  Existence.  — There  is  no  express  provision 
for  the  extension  of  corporate  existence.     (See  however,  sec.  61,  sub.  1.) 

24.  Dissolution.  —  The  corporation  may  be  dissolved  by  expiration  of  the 
charter,  or  by  judgment  of  dissolution  by  a  court  of  competent  jurisdiction; 
also  through  failure  to  commence  business  within  three  years  from  the  date 
of  charter  (sees.  680-681).  Under  the  Laws  of  1907,  chap.  166,  the  following 
provision  is  made  for  the  dissolution  of  the  corporation,  to  wit :  Where  four- 
fifths  in  interest  of  all  the  stock  outstanding  shall  vote  in  favor  of  a  dissolu- 
tion at  a  stockholders'  meeting  called  for  that  purpose  on  notice  signed  by  a 
majority  of  the  directors,  stating  time,  place,  and  object  of  the  meeting,  served 
personally,  or  by  mail  at  least  thirty  days  next  before  the  meeting.  If  at  said 
meeting  four-fifths  in  interest  of  all  the  stockholders  of  said  company  shall 
signify  their  consent  in  writing  to  the  dissolution  of  the  corporation,  such  con- 
sent in  writing,  together  with  a  list  of  the  directors  and  officers  of  the  company, 
giving  post-office  address  and  place  of  residence  of  each,  certified  by  the  presi- 
dent and  the  secretary  and  treasurer  as  true  and  correct  action  of  the  stock- 
holders, shall  be  filed  with  the  Secretary  of  State ;  or  when,  without  a 
stockholders'  meeting,  all  the  stockholders  of  the  corporation  consent  in 
writing  to  a  dissolution,  the  same  shall  be  certified  to  as  above  and  filed 
with  the  Secretary  of  State.  When  any  such  certificate  as  above  mentioned 
is  filed  with  the  Secretary  of  State,  he  shall  issue  a  certificate  that  such  consent 
has  been  filed  and  that  the  corporation  is  dissolved,  and  said  officer  shall  so 
note  on  the  ledger  in  his  office. 

25.  Annual  Franchise  Tax.  —  All  domestic  corporations  are  required  on 
or  before  the  1st  day  of  May  of  each  year  to  pay  in  advance  to  the  Secretary 
of  State  a  franchise  tax  for  the  year  following,  which  shall  be  computed  as 
follows,  to  wit:  50  cents  on  each  $1,000,  or  a  fractional  part  thereof  of  the 
authorized  capital  stock  of  such  corporation,  unless  the  total  amount  of  cap- 
ital stock  of  such  corporation  issued  and  outstanding,  plus  its  surplus  and 
undivided  profits,  shall  exceed  its  authorized  capital  stock,  and  in  that  event 
the  franchise  tax  of  such  corporation  for  the  year  following  shall  be  50  cents  on 

556 


DIGEST    OF    INCORPORATION    ACTS.  —  TEXAS. 

each  SI, 000  of  capital  stock  of  such  corporations  issued  and  outstanding,  plus  its 
surplus  and  undivided  profits;   provided,  that  such  franchise  tax  shall  not  in 
any  case  be  less  than  $10;  provided,  that  where  the  authorized  capital  exceeds 
$1,000,000,  such  franchise  tax   shall   be  50  cents  for  each  $1,000  up  to  and 
including  $1,000,000,  and  for  each  additional  SI, 000  in  excess  of  $1,000,000  it 
shall  be  25  cents.     The  franchise  tax  herein  provided  for  shall   be  computed 
upon  the  basis  of  the  total  amount  of  the  capital  stock  issued  and  outstand- 
ing, plus  the  surplus  and  undivided  profits  of  the  corporations,  instead  of  upon 
the  authorized  capital  stock,  whenever  such  total  amount  is  different  from  the 
authorized  capital  stock.    Affidavit  of  the  head  of  the  corporation  and  secretary 
thereof  to  these  facts  may  be  filed  with  the  Secretary  of  State,  or  may  be  re- 
quired whenever  in  his  judgment  the  same  is  necessary  to  protect  the  interests 
of  the  State.    Any  corporation,  either  domestic   or  foreign,  which  shall  fail  to 
pay  the  tax  provided  for  in  this  article  at  the  time  specified  herein  shall  imme- 
diately become  liable  to  a  penalty  of  twenty-five  per  cent  on  the  amount  of 
the  tax  due  by  it,  and  if  the  amount  of  said  tax  and  penalty  be  not  paid  in  full 
on  or  before  the  1st  day  of  July  thereafter  such  corporation  shall  for  such  de- 
fault forfeit   its  right  to  do  business  in  the  State,  which  forfeiture    shall    be 
consummated  without  judicial  ascertainment  by  the  Secretary  of  State  entering 
upon  the  margin  of  the  ledger  kept  in  his  office  relating  to  such  corporation  the 
word   "Forfeited,"   giving  the  date  of  such  forfeiture;    and  any  corporation 
whose  right  to  cio  business  may  be  thus  forfeited  shall  be  denied  the  right  to 
sue  or  defend  in  any  of  the  courts  of  this  State,  and  in  any  suit  against  such 
corporation  on  a  cause  of  action  arising  before  such  forfeiture  no  affirmative 
relief  may  be  granted  to  such  corporation  unless  its  right  to  do  business  is 
revived  as  provided  in  Article  5243  j.     And  each  and  every  director  of  any  cor- 
poration whose  right  to  do  business  within  the  State  shall  be  so  forfeited  shall 
as  to  any  and  all  debts  of  such  corporation  which  may  be  created  or  in- 
curred, with  his  knowledge,   approval,  and  consent  within  the  State,   after 
such  forfeiture  by  any  such  directors  or  officers,  and  before  the  revival  of  the 
right  of  such  corporation  to  do  business,  be  deemed  and  held  liable  thereon  in 
the  same  manner  and  to  the  same  extent  as  if  such  directors  and  officers  of 
such  corporation   were  partners   (Laws  of   1907,  Special  Session,  chap.  23). 
Nothing  in  this  act  shall  affect  the  amount  of  the  franchise  tax  to  be  paid  by 
any  corporation  for  the  period  of  time  ending  with  April  30,  1907,  excepting 
only  such  domestic  corporations  as  may  be  chartered  after  this  act  shall  take 
effect  and  such  foreign  corporations  as  may,  after  this  act  shall  take  effect, 
apply  to  the  Secretary  of  State  for  a  permit  to  do  business  within  the  State. 
For  the  purpose  of  determining  the  amount  of  the  first  franchise  tax  payment 
required  by  this  act  of  any  domestic  corporation  which  may  be  hereafter 
chartered,  or  of  any  foreign  corporation  which  may  hereafter  apply  for  a  permit 
to  do  business  within  the  State,  and  also  for  determining  the  correctness  of  any 
report  which  is  provided  in  this  act,  the  Secretary  of  State  may,  whenever  he 
may  deem  it  necessary  or  proper  to  protect  the  interests  of  the  State,  require 
any  one  or  more  of  the  officers  of  such  corporations  to  make  and  file  in  the  office 
of  the  Secretary  of  State  an  affidavit  or  affidavits  in  writing  which  shall  be  sub- 
scribed by  such  officers,  and   by  him  sworn  to  before  some  officer  who  is  by 
law  duly  authorized  to  administer  oaths,  and  verified  by  his  seal  of  office,  set- 
ting forth  fully  the  facts  concerning  the  amount  of  the  surplus  and  undivided 
profits  respectively,  if  any,  of  such  domestic  or  foreign  corporation ;   and  until 
the  Secretary  of  State  shall  be  fully  satisfied  as  to  the  amount  of  such  surplus 

557 


DIGEST    OF    INCORPORATION    ACTS.  —  TEXAS. 

and  undivided  profits,  respectively,  if  any,  he  shall  not  file  the  articles  of  incor- 
poration of  such  proposed  domestic  corporation,  or  issue  such  permit  or  accept 
such  franchise  tax.  For  the  purpose  of  ascertaining  and  determining  the 
amount  of  any  annual  franchise  tax  prescribed  by  this  act,  the  president,  vice- 
president,  general  manager,  secretary,  treasurer,  and  superintendent  of  each 
and  every  domestic  or  foreign  corporation  embraced  within  the  provisions  of 
this  act  shall  annually,  and  between  the  1st  and  10th  days  of  March,  and  also 
whenever  called  upon  by  the  Secretary  of  State  in  writing  and  under  oath  to 
do  so,  report  to  the  Secretary  of  State,  as  required  by  sec.  4  of  this  act,  the 
total  amounts  of  the  capital  stock  issued  and  outstanding,  and  the  surplus 
and  undivided  profits  respectively,  if  any,  of  such  corporation,  on  the  1st  day 
of  March  next  preceding,  and  the  Secretary  of  State  may  ascertain  such  facts 
from  other  sources,  and  if  the  true  aggregate  of  such  amounts  shall  exceed  the 
authorized  capital  stock  of  such  corporation  as  disclosed  by  its  then  current 
original  or  amended  articles  of  incorporation,  the  amount  of  its  annual  franchise 
tax  for  the  year  beginning  the  1st  day  of  May  next  thereafter  shall  be  collected 
and  paid ;  otherwise,  its  annual  franchise  tax  shall  be  calculated  and  paid  upon 
the  amount  of  its  authorized  capital  stock  as  shown  by  its  aforesaid  original  or 
amended  articles  of  incorporation.  The  making  and  filing  by  any  one  of  such 
officers  of  such  corporation  of  the  record  required  by  this  section  shall  relieve  the 
other  officers  of  the  corporation  from  the  duty  of  making  any  report  required 
by  this  section,  except  such  report  or  reports  as  may  be  required  by  the  Secre- 
tary of  State.  In  the  event  of  increase  in  the  authorized  capital  stock  of  any 
domestic  or  foreign  corporation,  it  shall  also  pay  in  advance  a  supplemental 
franchise  tax  thereon  for  the  remainder  of  the  year  down  to  and  including  the 
30th  day  of  April  next  thereafter,  the  amount  of  which  shall  be  determined  as 
is  provided  in  sec.  3  of  this  act  in  case  of  the  first  franchise  tax  payment  to  be 
made  under  this  act  by  a  domestic  corporation  which  may  be  hereafter  author- 
ized to  do  business  within  the  State. 

Every  person  required  by  this  act  to  make  any  annual  report  to  the  Secretary 
of  the  State  who  shall  for  a  longer  period  than  five  days,  and  every  person  who 
shall  for  more  than  ten  days  after  the  mailing  by  the  Secretary  of  State  demand 
upon  him  any  other  report  which  the  Secretary  of  State  is  by  this  act  authorized 
to  require,  fail  or  refuse  to  make  such  report,  shall  be  deemed  guilty  of  a  misde- 
meanor, and  upon  conviction  thereof  shall  be  fined  in  any  sum  not  less  than  $50 
and  not  more  than  $200,  and  each  day  of  such  failure  or  refusal  after  the  expi- 
ration of  said  five  days  or  ten  days,  as  the  case  may  be,  shall  constitute  a 
separate  offence  (Laws  of  1907,  pp.  502-508,  as  amended  by  Laws  of  1909, 
p.  224). 

26.  Foreign  Corporations.  —  Foreign  corporations  must  file  with  the 
Secretary  of  State  a  certified  copy  of  their  articles  of  incorporation,  a  permit  to 
do  business  within  the  State  being  issued  by  said  official  upon  payment  of  the 
original  license  fee  hereinafter  set  forth,  and  in  addition  to  this  the  proportionate 
part  of  the  annual  license  tax  for  the  remaining  portion  of  the  State's  fiscal  year 
must  be  paid.  The  permit  issued  by  the  Secretary  of  State  runs  for  only  ten 
years  (sec.  748).  The  corporation  seeking  to  procure  the  permit  must  furnish 
satisfactory  proof  that  either  $100,000  in  cash  or  fifty  per  cent  of  the  authorized 
capital  stock  has  been  subscribed  and  at  least  ten  per  cent  paid  in  before  permit 
will  issue  (sec.  642,  sub.  56;  Laws  of  1901,  chap.  15).  The  Secretary  of  State 
may  require  an  anti-trust  affidavit  in  the  same  form  required  for  domestic 
corporations  (sec.  2439,  as  amended  by  Laws  of  1909,  p.  266).    If  the  authorized 

558 


DIGEST    OF    INCORPORATION    ACTS. — TEXAS. 

capital  stock  be  $10,000  or  less,  the  fee  for  permit  shall  be  $50;  if  the  authorized 
capital  stock  be  in  excess  of  $10,000,  fee  for  permit  is  150  for  the  first  $10,000  and 
$10  for  the  additional  $10,000  and  fractional  part  thereof  (Laws  of  1907,  Special 
Session,  chap.  22;  sec.  2439  as  amended  by  Acts  of  1909,  p.  266).  Each  and 
every  foreign  corporation  authorized  or  that  may  hereafter  be  authorized  to  do 
business  in  this  State  shall,  on  or  before  the  1st  of  May  of  each  year,  pay  in 
advance  to  the  Secretary  of  State  a  franchise  tax  for  the  year  following,  which 
shall  be  computed  as  follows:  viz.,  $1  on  each  $1,000  or  fractional  part  thereof 
of  the  authorized  capital  stock  of  the  corporation  up  to  and  including  $100,000, 
and  $2  on  each  $5,000  or  fractional  part  thereof  of  such  stock  in  excess  of 
$100,000  and  up  to  and  including  $1,000,000;  and  $2  on  each  $20,000  or  frac- 
tional part  thereof  of  such  stock  in  excess  of  $1,000,000  and  up  to  and  includ- 
ing $10,000,000,  and  $2  on  each  $50,000  of  such  stock  in  excess  of  $10,000,000; 
unless  the  total  amount  of  the  capital  stock  of  such  corporation  issued  and 
outstanding,  plus  its  surplus  and  undivided  profits,  shall  exceed  its  author- 
ized capital  stock,  and  in  that  event  the  franchise  tax  of  such  corporation 
for  the  year  following  shall  be  $2  on  each  $1,000  or  fractional  part  thereof 
of  the  authorized  capital  stock  of  such  corporation  issued  and  outstanding, 
plus  its  surplus  and  undivided  profits,  up  to  and  including  $100,000,  and  $2 
on  each  $5,000  or  fractional  part  thereof  of  such  stock,  surplus,  and  undivided 
profits  in  excess  of  $100,000  and  up  to  and  including  $1,000,000;  and  $2  on 
each  $20,000  or  fractional  part  thereof  of  such  stock,  surplus,  and  undivided 
profits  in  excess  of  $1,000,000  and  up  to  and  including  $10,000,000;  and  $2 
on  each  $50,000  of  such  stock,  surplus,  and  undivided  profits  in  excess  of 
$10,000,000;  provided  that  such  franchise  tax  shall  not  in  any  case  be  less 
than  $25.     (See  ante,  sec.  25.) 

Lake  View  Land  Co.  v.  Company,  95  Texas,  252;  66  S.  W.  766;  Security  Co.  v.  Bank, 
93  Texas,  575:  57  S.  W.  22;  Wilson  v.  Peace  (Texas  App.),  85  S.  W.  31;  De  Witt  v.  Com- 
pany, 81  S.  W.  334. 


559 


DIGEST    OF    INCORPORATION    ACTS. UTAH. 


UTAH. 

(The  references  below  are  to  the  Revised  Statutes  of  Utah,  1898,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  Utah  is  to  be  found  in  the  Revised  Statutes 
of  1898  of  that  State,  sees.  314-373,  as  amended  by  the  Laws  of  1899  and  1901. 
Under  this  act  corporations  may  be  formed  for  any  purpose  for  which  individ- 
uals may  lawfully  associate  themselves.  Special  provisions  are  made  for  in- 
surance, irrigation,  trust,  banking,  and  railway  companies. 

2.  Incorporators.  —  Five  or  more  persons,  one  of  whom  must  be  a  resident 
of  the  State  (sec.  314 ;  see  also  Laws  of  1905,  chap.  22). 

3.  Contents  of  the  Articles  of  Agreement.  —  The  articles  must  set 
forth :  a.  Name.  —  No  corporation  can  use  the  name  of  a  corporation  already 
organized  within  the  State  or  of  any  foreign  corporation  duly  authorized  to 
transact  business  within  the  State  (sec.  315,  sub.  1;  Laws  of  1899,  chap.  52; 
Laws  of  1901,  chap.  81 ;  Laws  of  1905,  chap.  22). 

b.  Domicile.  —  The  precinct  or  city  where  it  is  organized  (Laws  of  1905, 
chap.  22). 

c.  Incorporators.  —  The  names  of  the  incorporators  and  their  places  of 
residence  (Id.). 

d.  Duration.  —  Not  to  be  less  than  three  nor  more  than  one  hundred  years 
(Id.). 

e.  Purposes.  —  Pursuit  or  business  agreed  upon,  specifying  it  in  general 
terms.  The  Secretary  of  State  permits  the  insertion  of  any  number  of  objects 
in  the  articles  not  covered  by  special  acts. 

/.    Place  of  General  Business. 

g.  Stock  Subscriptions.  —  The  amount  of  stock  each  party  has  subscribed. 
The  amount  of  each  share  and  the  limit  of  capital  stock  agreed  upon.  If  the 
capital  stock  is  to  be  divided  into  different  kinds  and  classes,  the  rights  and 
privileges  of  each  class  must  be  provided  for,  and  the  power  of  voting  may  be 
confined  to  such  classes  as  the  articles  may  designate.  Unless  otherwise  pro- 
vided, each  shareholder  is  entitled  to  one  vote  for  each  share  of  stock  owned  by 
him  or  held  in  trust  for  others  (Id.;  see  also  Laws  of  1903,  chap.  59). 

h.  Officers  and  Directors.  —  The  number  and  kinds  of  officers,  their  qualifi- 
cations, and  the  terms  of  office,  and  time  and  manner  of  their  election,  removal, 
and  resignation,  with  the  names  of  the  officers  who  are  to  serve  until  the  first 
general  election,  provided  that  in  no  case  shall  the  number  of  directors  be  less 
than  three  nor  more  than  twenty-five.  Provision  may  be  made  also  for 
classifying  directors  into  three  classes  to  hold  office,  each  for  one,  two,  and  three 
years  respectively,  one-third  being  elected  annually  (Id.)- 

i.  Quorum  of  Directors.  —  Number  of  the  entire  board  of  directors  that  are 
necessary  to  constitute  a  quorum  to  be  authorized  to  transact  the  business 
and  exercise  the  corporate  powers  of  the  corporation,  provided  that  a  quorum 
shall  not  be  less  than  one-fourth  of  the  entire  number  (Id.). 

j.  Stockholders'  Liabilities.  —  Whether  or  not  the  private  property  of  the 
stockholders  shall  be  liable  for  its  obligations  (Id.). 

k.    Provisions  for  the  Regulation  of  Internal  Affairs.  —  Such  general  clauses 

560 


DIGEST    OF    INCORPORATION    ACTS.  —  UTAH. 

as  incorporators  may  deem  necessary  for  conducting  the  business  of  the  cor- 
poration for  its  future  welfare  (Id.).  The  law  provides  that  articles  of  agree- 
ment shall  also  contain  provisions  as  to  the  payment  of  stock  subscriptions  in 
property,  if  it  is  desired  to  pay  them  in  this  manner.  (See  sec.  5,  post,  "Pro- 
curing the  Charter.")  Provision  may  also  be  made  in  the  articles  of  incorpora- 
tion designating  what  proportion  of  the  outstanding  capital  stock  shall  be 
represented  at  a  stockholders'  meeting,  and  what  proportion  of  the  stock  so 
represented  shall  be  necessary  to  determine  any  question  relative  to  the  election 
of  officers  (sec.  316,  as  amended  by  Laws  of  1901,  chap.  81).  When  so  provided  in 
the  articles  of  agreement,  meetings  of  the  board  of  directors  may  be  held  for  the 
transaction  of  any  business  of  the  corporation  at  such  place  without  the  State  as 
the  directors  may  by  resolution  or  by  by-law  provide  (sec.  324.:  Laws  of  1903, 
chap.  94).  The  articles  of  agreement  may  provide  that  the  entire  property  of 
the  corporation  may  be  sold,  mortgaged,  or  otherwise  disposed  of  by  the  direc- 
tors or  by  the  stockholders  (Laws  of  1905,  chap.  131). 

4.  Statutory  Powers.  —  In  addition  to  statutory  enumeration  of  common 
law  powers  corporations  have  the  following  additional  powers :  To  authorize 
voting  by  proxy,  to  forfeit  stock  for  non-payment  of  assessments,  to  consoli- 
date with  other  corporations  engaged  in  the  same  line  of  business  in  the  same 
vicinity,  to  enforce  a  hen  upon  the  stock  of  its  members  for  debts  due  the  cor- 
poration, to  remove  directors  and  to  authorize  directors  to  adopt  by-laws,  to 
dispose  of  the  assets  of  the  corporation  when  such  power  is  inserted  in  the  arti- 
cles of  agreement  and  is  given  to  the  board  of  directors  (R.  S.,  sec.  322 ;  R.  S. 
sees.  335,  356,  373;  R.  L.,  sees.  340,  341;  R.  S.,  sec.  333;  R.  L.,  sees. 
322,  32  1,  333,  335,  340,  341,  356,  and  376;  see  also  Laws  of  1905,  chap.  27; 
Laws  of  1905,  chaps.  108,  131).  Corporations  other  than  irrigation  companies 
are  by  implication  forbidden  to  hold  stock  in  other  corporations  (Laws  of  1905, 
chap.  108,  sec.  57;  sec.  4411).  Domestic  corporations  may  transact  business 
without  the  State  (sec.  324 ;  also  Laws  of  1903,  chap.  94). 

Bear  River  Co.  v.  Hanley,  15  Utah,  506. 

5.  Procuring  the  Charter.  —  The  agreement  must  be  subscribed  by  all  of 
the  incorporators,  and  sworn  to  and  acknowledged  by  at  least  three  of  their 
number  before  the  county  clerk  or  any  notary  public  of  the  county  in  which  they 
have  established  or  intend  to  establish  their  principal  place  of  business  (Laws  of 
1905,  chap.  22).  In  addition  to  the  foregoing,  three  or  more  of  the  incorpora- 
tors must  make  oath  to  the  effect  that  they  have  commenced,  or  it  is  bona  fide 
their  intention  to  commence,  carrying  on  the  business  mentioned  in  the  agree- 
ment ;  that  the  affiants"  verily  believe  that  each  party  to  the  agreement  has 
paid,  or  is  able  to  and  will  pay,  the  amount  of  the  stock  subscribed  by  him,  pro- 
vided that  such  affidavit  shall  not  be  made  until  not  less  than  ten  per  cent 
of  the  stock  subscribed  and  ten  per  cent  of  the  capital  stock  of  the  corpora- 
tion has  been  paid  in,  and  provided  also,  where  subscriptions  to  the  capital 
stock  shall  consist  of  property  necessary  to  the  pursuit  agreed  upon,  there 
must  appear  in  the  articles  of  incorporation  a  description  of  the  property  so 
taken,  with  a  statement  of  the  fair  cash  value  thereof,  which  statement,  except 
in  the  case  of  corporations  organized  for  mining  or  irrigation  purposes,  shall  be 
supplemented  by  the  affidavit  of  three  persons  to  the  effect  that  they  are  ac- 
quainted with  the  said  property,  and  that  it  is  reasonably  worth  the  amount 
in  cash  for  which  it  was  accepted  by  the  corporation,  and  the  owner  of  such 
property  shall  be  deemed  to  have  subscribed  such  amount  to  the  capital  stock 

501 


DIGEST    OF   INCORPORATION   ACTS.  —  UTAH. 

of  said  corporation  as  will  represent  the  fair  cash  value  of  so  much  of  said  prop- 
erty and  of  such  interest  therein  as  they  may  have  conveyed  to  the  corpo- 
ration by  deed  actually  executed  and  delivered  (Laws  of  1905,  chap.  111). 
Before  the  first  officers  shall  enter  upon  the  duties  of  their  respective  offices  they 
shall  take  and  subscribe  an  oath  of  office  that  they  will  discharge  the  duties  of 
such  office  to  the  best  of  their  judgment,  and  that  they  will  not  do  or  consent 
to  the  doing  of  any  matter  or  tiling  relating  to  the  business  of  the  corporation 
with  intent  to  defraud  any  stockholder  or  creditor  or  the  public.  Thereupon 
the  articles  of  agreement,  together  with  the  oath  of  office  of  the  officers,  shall 
within  ten  days  from  its  due  execution  be  filed  and  recorded  in  the  office  of  the 
county  clerk  of  the  county  in  which  the  corporation's  general  business  is  to  be 
carried  on  (sees.  316-318).  The  county  clerk  issues  a  certificate  to  the  effect 
that  the  agreement  and  oaths  of  office  have  been  filed  in  his  office,  which  certifi- 
cate, together  with  a  copy  of  the  agreement  and  oaths,  must  be  filed  in  the  office 
of  the  Secretary  of  State,  and  thereupon  he  issues  a  certificate  that  the  above 
mentioned  instruments  have  been  filed  in  his  office  (sees.  316,  320,  as  amended 
by  Laws  of  1901,  chap.  81). 

P.  T.  C.  Co.  v.  Company,  23  Utah,  474;  65  Pac.  735. 

6.  Corporate  Indebtedness.  —  The  capital  stock  cannot  be  diminished 
to  an  amount  less  than  fifty  per  cent  in  excess  of  the  indebtedness  of  the  cor- 
poration (sec.  338;   Laws  of  1905,  chap.  30). 

7.  Organization  Tax.  —  Twenty-five  cents  on  each  $1,000  of  the  capital 
stock  (Laws  of  1897,  chap.  1 ;  Laws  of  1901,  chap.  60). 

8.  Filing  and  Recording  Fees.  — The  payment  of  the  organization  tax 
includes  the  filing  fees  in  the  Secretary  of  State's  office.  To  the  Secretary  of 
State  for  issuing  certificate  of  incorporation,  $5 ;  for  certified  copy  of  articles  of 
agreement,  15  cents  per  folio  of  one  hundred  words  end  $1  for  certificate ;  for 
filing  and  issuing  certificate  of  amendment,  $5 ;  to  the  county  clerk  for  filing 
and  indexing  articles  of  agreement,  $2.50;  for  recording  the  same,  20  cents  per 
folio ;  for  filing  oath  of  officers,  50  cents  each ;  for  issuing  certificate  of  com- 
pliance on  the  part  of  a  foreign  corporation,  $5;  for  receiving  and  filing 
acceptance  of  the  provisions  of  the  constitution  on  the  part  of  an  incorporating 
company  and  issuing  certificate  thereof,  $3  (sees.  965,  972;  Laws  of  1901, 
chap.  60;  Laws  of  1905,  chaps.  73,  127;   Laws  of  1911,  chap.  50). 

9.  Commencing  Business.  —  Business  may  be  commenced  as  soon  as  the 
articles  are  filed  as  required  by  law,  and  ten  per  cent  of  the  capital  stock  sub- 
scribed, and  ten  per  cent  of  the  authorized  capital  stock  has  been  paid  in,  and 
the  officers  have  duly  taken  their  oaths  of  office.  Business  must  be  commenced 
within  the  period  of  two  years  after  the  time  of  filing  articles,  to  avoid  forfeiture 
of  charter  (Laws  of  1891,  chap.  81,  amending  R.  S.,  sees.  316,  321). 

10.  Organization  Meeting. — The  organization  meeting  must  be  held 
within  the  State';  this  in  the  absence  of  any  statute  expressly  authorizing  the 
holding  of  organization  meetings  without  the  State. 

11.  Meetings  of  Stockholders  and  Directors.  —  Meetings  of  stock- 
holders and  directors  may  be  held  at  the  time  and  place  designated  in  the  articles 
of  agreement.  In  the  absence  of  any  statute  expressly  authorizing  the  holding 
of  stockholders'  meetings  without  the  State,  it  is  safe  to  say  that  without  the 
consent  of  all  stockholders  such  meetings  must  be  held  within  the  State  (R.  L., 

ecs.  334,  336).    When  so  provided  in  the  articles  of  incorporation  meetings  of 
the  board  of  directors  may  be  held  for  the  transaction  of  any  business  of  the 

562 


DIGEST    OF    INCORPORATION    ACTS.  —  UTAH. 

corporation  at  such  place  without  the  State  as  the  directors  may  by  resolution 
or  by-law  provide  (sec.  324;  Laws  of  1903,  chap.  94).  Voting  by  proxy  is  per- 
mitted. In  order  to  permit  of  cumulative  voting  provision  must  be  made  in  the 
articles  of  incorporation.  The  right  to  vote  may  be  withheld  from  any  class 
of  stock  by  making  provision  to  that  effect  in  the  articles  of  agreement  (sees. 
335,  337;  Laws  of  1903,  chap.  59). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications. — 
There  must  be  at  least  three  and  not  more  than  twenty-five  directors,  one-third 
of  whom  must  be  residents  of  the  State.  Directors  may  be  classified  into  three 
classes,  one-third  to  be  elected  annually  (sec.  315;  Laws  of  1905,  chap.  22). 
They  must  take  the  oath  of  office  (sec.  317).  In  case  of  corporations  doing  an 
interstate  business  no  directors  need  be  residents  or  stockholders  unless  ex- 
pressly required  by  the  articles  of  incorporation  (sec.  324 ;  Laws  of  1903,  chap. 
94).  One-fourth  of  the  entire  number  may  constitute  a  quorum  if  the  articles 
so  provide.  Directors  must  be  stockholders.  Special  provision  is  made  for  their 
removal  by  the  stockholders  (R.  S.,  sees.  324,  327;   Laws  of  1901,  chap.  81). 

b.  Liabilities.  —  Quo  warranto  proceedings  may  be  brought  against  corporate 
officers  who  unlawfully  exercise  the  duties  of  a  corporate  office  (sec.  3609). 
Directors  are  liable  for  fraud;  for  making  false  reports  to  public  officers, 
for  the  unauthorized  use  of  names  in  prospectus ;  for  the  illegal  declaration  of 
dividends  or  illegal  withdrawal  of  capital;  for  receiving  notes  in  payment  of 
capital  stock,  or  for  receiving  from  any  other  stock  corporation  stock  of  such 
corporation  in  exchange  for  that  of  the  corporation  and  of  which  the  above 
person  is  a  director  (sees.  4408-4413).  Every  director  who  is  present  at  a  meet- 
ing is  deemed  to  concur  in  the  action  taken  thereat,  unless  his  dissent  is  entered 
on  the  minutes  of  the  directors'  meeting  (sees.  4419,  4420). 

13.  Stockholders'  Liabilities.  —  Unless  the  articles  of  agreement  other- 
wise provide,  stockholders  are  only  liable  to  the  creditors  to  the  extent  of  their 
unpaid  stock  subscriptions  (R.  S.,  sec.  331;  see  also  Cons.,  Art.  XII.  sec.  18; 
see  also  R.  S.,  sees.  338,  354). 

Richardson  v.  Company,  23  Utah,  366;  65  Pac.  74;  Salt  Lake  Hardware  Co.  v.  Com- 
pany, 13  Utah,  423;  45  Pac.  200;  Henderson  v.  Turngren,  9  Utah,  432;  35  Pac.  495;  Crowfoot 
v.  Thatcher,  19  Utah,  212. 

14.  Stock  Certificates.  —  Each  shareholder  is  entitled  to  a  certificate  show- 
ing the  number  of  shares  owned  by  him,  signed  by  such  officers  as  the  by-laws 
may  prescribe.    Par  value  of  shares  may  be  any  amount. 

15.  Preferred  Stock.  —  The  issue  of  preferred  stock  is  expressly  author- 
ized by  statute  (Laws  of  1903,  chap.  59).  Preferred  stock  may  be  issued  on  such 
terms  and  with  such  voting  powers  as  may  be  prescribed  in  the  articles  of  agree- 
ment (sec.  335 ;   Laws  of  1903,  chap.  59). 

16.  Payment  of  Capital  Stock.  —  Capital  stock  may  be  paid  for  in  prop- 
erty by  providing  therefor  in  the  articles  of  agreement  and  describing  such 
property  therein  (Laws  of  1901,  chap.  81,  amending  R.  S.,  sec.  316;  Laws  of 
1905,  chap.  111).  Assessments  cannot  be  made  on  full  paid  stock  for  any  pur- 
pose unless  so  provided  in  the  articles  of  agreement  (sec.  354).  No  amend- 
ments to  articles  to  make  it  assessable  can  be  made  except  by  unanimous 
consent  of  stockholders  (sec.  338). 

17.  Books.  —  Correct  books  of  the  proceedings  and  business  of  the  corpo- 
ration must  be  kept  open  for  inspection  by  stockholders.  The  place  where  such 
books  are  to  be  kept  is  not  regulated  by  statute  (II.  S.,  sees.  328,  329,  4415). 

18.  Office  and  Agent.  —  The  Constitution  provides  that  no  corporation 

5G3 


DIGEST    OF    INCORPORATION    ACTS. UTAH. 

shall  do  business  within  the  State  without  having  one  or  more  places  of  busi- 
ness within  the  State  and  an  agent  located  thereat  upon  whom  process.may  be 
served  (Art.  XII.  sec.  9;  see  also  R.  S.,  sec.  4415). 

19.  Reports.  — The  statutes  do  not  require  reports  to  be  made  except  for 
insurance,  banking,  loan,  trust,  and  guaranty  companies. 

20.  Anti-Trust  Statute.  —  There  is  a  moderate  anti-trust  statute  in  force 
in  Utah  (R.  S.,  sees.  1752-1762). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charter  may  be 
forfeited  for  non-user  for  a  period  of  two  years  consecutively,  or  for  entering 
illegal  pools  or  trusts  (R.  S.,  sees.  321,  1758).  Quo  warranto  lies  for  misuse  or 
non-use  of  charter  (sees.  3610-3626  inclusive). 

Jackson  v.  Company,  21  Utah,  1 ;    59  Pac.  238. 

22.  Amendments.  —  Articles  of  incorporation  may  be  amended  in  any 
respect  desired,  by  conforming  to  the  provisions  of  law  in  such  case  made  and 
provided  (sec.  338).  To  carry  the  amendment  into  effect  requires  the  vote  of 
a  majority  of  the  stockholders  cast  at  a  stockholders'  meeting  called  for  that 
purpose.  The  law  provides  that  if  all  the  stockholders  vote  in  favor  of  such 
amendment,  notice  thereof  required  by  law,  hereinafter  referred  to,  need  not  be 
given,  and  provided  further  that  the  original  purpose  of  the  corporation  shall 
not  be  altered  or  changed  without  the  approval  or  consent  of  all  the  outstand- 
ing stock,  and  provided  further  that  adding  to  the  purposes  or  objects  or  ex- 
tending the  power  and  business  of  the  corporation  shall  not  be  deemed  to  change 
the  original  purposes  of  the  corporation  (Laws  of  1903,  chap.  94 ;  Laws  of  1905, 
chap.  30).  In  the  absence  of  unanimous  consent  on  the  part  of  the  stockholders, 
notice  of  the  meeting  must  be  given  by  the  president  or  secretary  of  the  corpora- 
tion in  some  newspaper  having  general  circulation  in  the  county  where  the 
corporation  has  its  principal  place  of  business  for  at  least  twenty-one  days, 
stating  the  nature  of  the  proposed  amendment  and  the  time  and  place  of  said 
meeting.  Such  change  or  amendment  when  adopted  shall  be  signed  by  the 
president  and  secretary  of  such  corporation,  and  be  filed  and  recorded  in  the 
manner  provided  for  the  filing  and  recording  of  original  articles  (sec.  339 ;  Laws 
of  1905,  chap.  30). 

23.  Extension  of  Corporate  Existence.  — There  is  no  provision  for  the 
extension  of  corporate  existence. 

24.  Dissolution.  —  Voluntary  dissolution  may  be  had  by  application  to 
the  District  Court  upon  two-thirds  vote  of  the  stockholders  at  a  special  meeting 
of  the  stockholders  (R.  S.,  sees.  3114,  3661-3667;   Laws  of  1909,  chap.  50). 

25.  Annual  License  Fee. — All  domestic  business  corporations  except 
water,  canal,  and  irrigation  corporations  of  a  certain  designated  character,  and 
all  foreign  corporations  doing  business  within  the  State,  must  on  or  before  the 
15th  day  of  November  of  each  year  pay  to  the  Secretary  of  State  a  corporation 
license  tax.  All  corporations  with  an  authorized  capital  stock  of  $10,000  or 
less,  $5;  more  than  $10,000  and  not  to  exceed  $25,000,  $10;  more  than 
$25,000  and  not  exceeding  $50,000,  $15;  more  than  $50,000  and  not  exceeding 
$75,000,  $20;  more  than  $75,000  and  not  exceeding  $100,000,  $25;  more 
than  $100,000  and  not  exceeding  $150,000,  $35;  more  than  $150,000  and  not 
to  exceed  $200,000,  $40;  any  amount  over  $200,000,  $50  (Laws  of  1909,  chap. 
106).  Upon  payment  of  the  license  tax  the  Secretary  issues  to  such  corpora- 
tion a  certificate  authorizing  it  to  transact  its  business  in  the  State  for  the  period 
of  one  year  (Laws  of  1909,  chap.  106.     See  Laws  of  1911,  chap.  57). 

564 


DIGEST    OF   INCORPORATION    ACTS.  — r  UTAH. 

26.  Foreign  Corporations.  —  Foreign  corporations  must  file  with  the  Sec- 
retary of  State  and  county  clerk  of  the  county  where  the  principal  office  of  the 
corporation  is  to  be  located  a  copy  of  their  articles  of  incorporation  and  by-laws. 
The  board  of  directors  of  such  corporations  must  appoint  some  person  residing 
within  the  county  where  the  corporation's  principal  place  of  business  is  located 
to  receive  service  of  process  upon  the  corporation.  A  similar  resolution  must 
be  passed  accepting  in  behalf  of  the  corporation  the  provisions  of  the  Constitu- 
tion of  the  State  of  Utah.  The  fee  for  filing  such  acceptance  is  $3.  Otherwise 
the  fifing  and  recording  fees  are  the  same  as  for  domestic  corporations.  Foreign 
corporations  pay  the  same  fees  to  the  Secretary  of  State  as  domestic  corpora- 
tions of  like  capitalization  (Laws  of  1911,  chap.  50).  Foreign  corporations 
must  also  pay  the  same  annual  license  tax  as  is  exacted  from  domestic  cor- 
porations (sees.  351,  352;  Laws  of  1907,  chap.  107).  Under  the  Constitution, 
Art.  XIII.  sec.  6,  no  corporation  organized  outside  of  the  State  is  permitted  to 
transact  business  within  the  State  on  conditions  more  favorable  than  those  pre- 
scribed by  law  to  similar  corporations  organized  under  the  laws  of  Utah.  (As 
to  right  of  foreign  corporations  to  exercise  the  power  of  eminent  domain,  see 
Laws  of  1909,  chaps.  20,  47.) 

R.  G.  W.  Ry.  Co.  v.  Company,  23  Utah,  22;  63  Pac.  995;  Hiakey  v.  Company,  27  Utah, 
409;  76  Pac.  20;  A.  Booth  &  Co.  v.  Weigand  (Utah),  79  Pac.  570. 


5G5 


DIGEST    OF    INCORPORATION    ACTS.  —  VERMONT. 


VERMONT. 

(The  references  cited  below  are  to  the  Public  Statutes  of  Vermont,  Revision  of  1906, 
unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  Vermont  is  found  in  the  statutes  of  Vermont, 
Revision  of  1906,  title  25,  chap.  182,  sees.  4101-4174.  Under  it  corporations 
may  be  formed  for  carrying  on  any  object  or  business  not  repugnant  to  public 
policy  or  the  laws  of  the  State,  excepting  express,  banking,  insurance  business, 
construction  and  operation  of  railroads  or  in  aiding  in  the  construction  thereof, 
and  the  business  of  savings  banks,  trust  companies,  or  corporations  intended  to 
derive  profit  from  the  loan  of  money  (sec.  4138,  as  amended  by  Laws  of  1908, 
chap.  103;  see  as  to  incorporation  by  special  act  of  the  General  Assembly,  Laws 
of  1910,  chap.  143). 

2.  Incorporators.  —  Three  or  more  adult  persons.  There  are  no  residential 
requirements  (sec.  4138;  Laws  of  1908,  chap.  103). 

3.  Contents  of  Articles  of  Association. — The  articles  of  association 
must  contain: 

a.  Name.  —  Similarity  of  names  with  that  of  existing  corporations  for- 
bidden (sec.  4139). 

b.  Purposes.  —  Object  or  objects  for  which  established.  Any  number  of 
purposes  may  be  inserted  in  the  articles  (sec.  4139). 

c.  Domicile.  —  Place  in  which  corporate  business  is  to  be  carried  on 
(sec.  4139). 

d.  Capital  Stock.  —  Amount  thereof.  Capital  stock  is  limited  to  a  minimum 
of  $500  and  a  maximum  of  $1,000,000.  The  par  value  of  shares  must  not  exceed 
$100  (sees.  4139,  4162).  Duration  of  corporate  existence  is  unlimited  unlesB 
incorporated  for  a  limited  term  (sec.  4153). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers,  the  following  additional  powers  are  granted :  The  right  to 
vote  by  proxy  at  stockholders'  meetings,  to  forfeit  stock  for  failure  to  pay 
assessments,  and  to  have  a  lien  upon  the  stock  of  its  members  for  debts  due 
to  the  corporation  (sees.  4153,  4155,  4161). 

5.  Procuring  the  Charter.  —  Articles  must  be  subscribed  by  all  the  incor- 
porators and  then  submitted  to  the  Secretary  of  State  for  his  approval.  The 
latter  may,  if  he  sees  fit,  refer  the  same  to  a  judge  of  the  Supreme  Court,  who 
is  given  power  to  determine  whether  the  proposed  corporation  may  or  may  not 
be  organized  under  the  General  Act  (Laws  of  1908,  chap.  103).  If  the  articles 
are  approved,  they  are  recorded  in  the  office  of  the  Secretary  of  State,  and  a 
certified  copy  thereof  must  be  recorded  in  the  office  of  the  clerk  of  the  town  in 
wliich  the  principal  place  of  business  of  the  corporation  is  located.  The  organi- 
zation tax  must  be  paid  to  the  Secretary  of  State  before  corporate  existence 
begins  (sees.  4139-4141  inclusive). 

Lawrie  v.  Silsby  (Vt.),  57  Atl.  1106. 

6.  Corporate  Indebtedness.  —  One-fourth  of  the  capital  stock  must  be 
paid  in  before  the  corporation  can  contract  debts.  No  debts  can  be  contracted 
in  any  event  exceeding  in  amount  two-thirds  of  the  capital  stock  actually  paid 
in  (sec.  4158). 

7.  Organization  Tax.  —  Capital  stock  up  to  $5,000,  $10 ;   not  exceeding 

566 


DIGEST    OF   INCORPORATION    ACTS. VERMONT. 

$10,000,  $25;  not  exceeding  $50,000,  $50;  not  exceeding  $200,000,  $100; 
not  exceeding  S500,000,  $200;  not  exceeding  $1,000,000,  S300;  exceeding 
$1,000,000,  $500  (sees.  731,  732,  734). 

8.  Filing  and  Recording  Fees.  — The  payment  of  the  organization  tax 
includes  the  filing  and  recording  fees  in  the  Secretary  of  State's  office.  The 
charge  for  issuing  certified  copy  of  articles  of  association  is  $2.  Recording 
fees  in  local  town  or  city  office,  $1 ;  fee  for  fifing  certificate  of  payment  of  capital 
stock,  $1. 

9.  Commencing  Business.  —  Before  commencing  business,  also,  the  presi- 
dent or  clerk  must  make  a  certificate  under  oath  stating  the  amount  of  capital 
actually  paid  in.  This  must  be  at  least  one-fourth  of  the  capital  stock,  if  debts 
are  to  be  contracted.  This  certificate  is  filed  in  the  office  of  the  Secretary  of 
State,  and  a  certified  copy  thereof  with  the  clerk  of  the  town  in  which  the  prin- 
cipal place  of  business  is  to  be  located  (sees.  4156,  4158). 

10.  Organization  Meeting.- — The  organization  meeting  must  be  held 
within  the  State.  Any  three  of  the  signers  of  the  articles  of  association  may 
call  the  first  meeting  of  the  persons  signing  such  articles,  by  delivering  to  each, 
or  leaving  at  Iris  abode,  or  mailing,  postage  prepaid,  to  his  address  at  least  seven 
days  prior  to  the  time  of  such  meeting,  a  notice  of  the  time  and  place  thereof. 
Such  meeting  may  be  held  without  previous  notice  if  all  the  signers  of  such 
articles  voluntarily  assemble  for  such  purpose  or  agree  thereto  in  writing  (sec. 
4142).  At  said  first  meeting  the  signers  of  said  articles  shall  effect  an  organiza- 
tion by  choosing  a  temporary  clerk  by  ballot,  the  adoption  of  by-laws,  and  the 
election  of  officers  (sec.  4143). 

When  by  reason  of  death  or  other  disqualifications  of  any  of  the  persons 
named  as  incorporators  or  commissioners  in  an  act  of  incorporation,  heretofore 
or  hereafter  passed,  such  corporation  cannot  be  organized,  the  governor  may, 
upon  application  of  any  one  of  the  incorporators  ov  commissioners  named  in 
the  act  on  such  reasonable  notice  to  the  surviving  incorporators  or  commis- 
sioners and  the  commissioner  of  State  taxes  as  the  Governor  shall  order,  des- 
ignate other  persons  to  act  as  incorporators  or  commissioners  with  the  sur- 
vivors named  in  the  act,  and  such  persons  shall,  with  the  survivors  named, 
have  all  the  rights  and  powers  to  receive  subscriptions  for  capital  stock  and 
organize  such  corporations  as  the  persons  named  in  the  act  (Laws  of  1908,  No. 
102;    Laws  of  1909,  p.  90). 

11.  Meetings  of  Stockholders  and  Directors.  —  There  is  no  statute 
authorizing  the  holding  of  stockholders'  meetings  without  the  State,  and  by 
implication  at  least  they  must  be  held  there.  Directors'  meetings  may  be  held 
within  or  without  the  State,  as  the  by-laws  may  provide  (sees.  4144,  4145, 
4152). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  at  least  three  directors,  who  must  be  stockholders,  and  two  of 
them  must  be  residents  of  the  State.  Directors  may  fill  vacancies  in  the  board 
or  in  the  office  of  the  clerk  of  the  corporation  (sees.  4146,  4151).  It  would 
appear  that  an  executive  committee  of  the  board  of  directors  may  be  provided 
for  in  the  by-laws.     (See  Roebling  Sons  v.  Barre,  76  Vt.  131.) 

Buck  v.  Company  (Vt.),  56  Atl.  285. 

b.  Liabilities.  —  Directors  are  liable  if  the  corporation  contracts  debts  before 
a  copy  of  its  articles  of  association  and  a  certificate  as  to  the  amount  of  capital 
stock  paid  in  are  filed  in  the  office  of  the  clerk  of  the  town  in  which  the  prin- 

5G7 


DIGEST    OF   INCORPORATION    ACTS. VERMONT. 

cipal  office  of  the  corporation  is  to  be  located.  They  are  also  liable  for  illegal 
payment  of  dividends,  or  for  permitting  the  creation  of  indebtedness  in  excess 
of  two-thirds  of  the  capital  stock  paid  in  (sees.  4156,  4157;  see  also  sees.  4150, 
4109,  4110). 

Fair  v.  Briggs  Estate,  72  Vt.  225;  47  Atl.  793;  Davenport  v.  Newton,  71  Vt.  11; 
42  Atl.  1087. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent  of 

their  unpaid  stock  subscriptions.    If  the  capital  stock  is  withdrawn  or  refunded 

to  the  stockholders  before  the  full  payment  of  its  debts,  each  stockholder  is 

personally  liable  to  the  amount  thereof  refunded  to  him  (sees.  4159,  4160). 

Barton  Nat.  Bank  v.  Atkins,  72  Vt.  33;  47  Atl.  176;  Corey  v.  Morril,  61  Vt.  598;  17 
Atl.  840. 

14.  Stock  Certificates.  —  Stockholders  are  entitled  to  a  certificate  signed 
by  such  officers  as  the  by-laws  prescribe.  The  par  value  of  shares  must  not 
exceed  $100  each  (sec.  4162).  As  to  obtaining  new  certificates  for  lost  ones,  see 
sees.  4124-4126. 

15.  Preferred  Stock.  —  There  is  no  provision  expressly  authorizing  the 
issuance  of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  in  payment  for 
any  property  deemed  necessary  for  the  business  of  the  corporation,  and  the 
6tock  so  issued  shall  be  fully  paid  stock,  and  not  liable  to  further  call  (sec.  4158). 

17.  Books.  —  Stock  book  must  be  kept  within  the  State,  containing  the 
names  of  the  holders  of  stock,  their  places  of  residence,  and  number  of  shares 
held  by  each,  amount  actually  paid  in  on  each  share,  and  time  when  they 
acquired  the  same  (sees.  4111,  4148,  4167).  All  records,  amounts,  and  papers 
of  the  corporation  are  open  to  the  inspection  of  stockholders  (sees.  4109,  4110, 
4148,  4150,  4167).  Special  power  is  granted  to  the  courts  to  require  the  pro- 
duction of  corporate  books  and  papers  by  corporate  officers  of  either  domestic 
or  foreign  corporations  doing  business  within  the  State  (Laws  of  1906, 
Act  75). 

18.  Office  and  Agent.  —  Must  have  an  office  within  the  State  in  charge 
of  a  clerk  in  the  town  where  its  principal  place  of  business  is  located  (sees.  4146, 
4167,  4108).  If  the  corporation  neglects  for  six  months  to  appoint  and  have  a 
clerk  residing  in  the  State,  it  shall  forfeit  $50  to  the  person  injured  (sec.  4108). 

19.  Reports .  —  All  domestic  corporations  must  within  ten  days  after  organ- 
ization file  their  annual  tax  returns  with  the  State  Treasurer  and  the  Commis- 
sioner of  State  Taxes  in  the  manner  hereinafter  set  forth  to  cover  the  unexpired 
portion  of  the  fiscal  year  commencing  the  1st  day  of  February  next  preced- 
ing. The  report  here  required  must  be  upon  blanks  furnished  by  the  Commis- 
sioner of  State  Taxes.  The  corporation  must  fill  out  such  blanks  and  answer 
all  interrogatories  therein  contained.  Such  blanks  so  filled  out  shall  be  sub- 
scribed and  sworn  to  by  the  clerk,  treasurer,  or  other  proper  officer  of  the  cor- 
poration. One  copy  of  the  blank  so  filled  out  and  sworn  to,  shall  be  returned 
to  the  Commissioner  of  Taxes,  one  copy  shall  be  sent  to  the  State  Treasurer, 
and  one  copy  shall  be  retained  by  the  corporation.  Such  returns  are  required 
to  be  made  annually,  and  should  be  filed  on  or  before  the  1st  day  of  March 
(sees.  645-647,  699,  as  amended  by  Laws  of  1906,  chap.  36).  Every  domestic 
corporation,  by  its  clerk,  treasurer  or  other  proper  officer  and  cashiers  of  national 
banks,  shall  annually,  on  or  before  the  5th  day  of  April,  file  with  the  Commis- 
sioner of  Taxes,  on  blanks  to  be  furnished  by  him,  a  sworn  return  showing  the 
name  and  residence  of  each  shareholder  therein,  the  number  of  shares  standing 

568 


DIGEST    OF    INCORPORATION    ACTS.  —  VERMONT. 

in  the  name  of  each  shareholder  on  the  first  day  of  said  last-named  month,  and 
the  par  value  of  such  shares  (Laws  of  1911,  chap.  37,  sec.  1). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  in  force  in 
Vermont. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charter  may  be 
forfeited  for  failure  to  pay  license  taxes  (sees.  695,  704,  705;  Laws  of  1906,  Acts 
36,  75). 

22.  Amendments.  —  Articles  may  be  amended  for  the  purpose  of  increas- 
ing or  decreasing  capital  stock,  for  the  purpose  of  changing  the  corporate  name 
or  place  of  domicile,  or  for  the  purpose  of  altering,  adding  to,  or  changing  the 
business  of  the  corporation.  To  increase  the  capital  stock  requires  a  meeting 
of  the  stockholders  warned  for  the  purpose.  After  the  increase  has  been  voted 
a  certificate  must  be  prepared,  and  signed  and  sworn  to  by  the  president  and 
clerk,  stating  the  nature  of  the  amendment.  This  must  be  filed  and  recorded 
with  the  Secretary  of  State,  and  a  certified  copy  thereof  returned  and  re- 
corded in  the  town  clerk's  office  in  the  same  manner  as  the  original  articles  of 
association. 

To  reduce  the  capital  stock  requires  a  meeting  of  the  stockholders  warned 
for  that  purpose,  and  action  thereat  had  by  two-thirds  of  its  stockholders 
in  amount.  After  such  reduction  a  certificate  thereof,  signed  and  sworn  to 
by  the  president  and  clerk,  must  be  filed  and  recorded  with  the  Secretary 
of  State,  and  a  certified  copy  thereof  returned  and  recorded  in  the  town  clerk's 
office  in  the  manner  provided  in  the  case  of  increase  of  capital  stock.  The 
name  of  the  corporation  may  be  changed  by  a  two-thirds  vote  of  the  stockholders 
representing  two-thirds  of  the  capital  stock  cast  at  a  meeting  duly  warned  for 
that  purpose.  Thereafter  a  certificate  signed  by  the  clerk  must  be  filed  and 
recorded  in  the  office  of  the  Secretary  of  State,  setting  forth  the  name  and 
the  substance  of  the  voting.  A  certified  copy  of  such  certificate  must  be  recorded 
in  the  town  clerk's  office,  where  the  certified  copy  of  the  original  articles  of 
association  is  required  to  be  recorded. 

The  purposes  of  the  corporation  may  be  changed  by  a  vote  of  all  of  the 
stockholders  at  a  meeting  duly  called  for  that  purpose.  A  certificate  setting 
forth  such  change,  signed  and  sworn  to  by  the  president  and  clerk  of  such 
corporation,  must  be  filed  and  recorded  with  the  Secretary  of  State,  and  certified 
copy  thereof  returned  and  recorded  in  the  town  clerk's  office  in  the  same  manner 
as  the  original  articles  of  association  (Laws  of  1904,  chap.  91).  The  domicile  of 
a  corporation  formed  under  chap.  165  of  Vermont  statutes  may  be  changed 
from  any  town  of  this  State  in  which  it  may  be  located  to  any  other  town  of 
this  State,  by  a  two-thirds  vote  of  the  stockholders  representing  two-thirds  of 
the  capital  stock,  or  if  it  has  no  capital  stock,  by  a  two-thirds  vote  of  all  the 
members  present  at  a  meeting  duly  warned  for  that  purpose,  and  by  trans- 
mitting and  causing  to  be  recorded  in  the  office  of  the  Secretary  of  State  a 
certificate  signed  by  the  clerk,  setting  forth  the  change  made  and  the  substance  of 
the  vote,  and  causing  a  certified  copy  thereof  to  be  recorded  in  the  town  clerk's 
office  where  a  certified  copy  of  the  original  articles  of  association  is  required  to 
be  recorded,  and  causing  a  certified  copy  of  the  original  articles  of  association 
and  a  certified  copy  of  the  certificate  hereinbefore  referred  to,  to  be  recorded  in 
the  town  clerk's  office  in  the  town  of  the  new  domicile  (Acts  of  1898,  No.  68). 

23.  Extension  of  Corporate  Existence. — Companies  may  be  incorpo- 
rated for  an  unlimited  term.  The  only  provision  for  extension  of  corporate 
existence  is  found  in  Laws  of  1906,  chap.  38.    This  act  provides  that  the  payment 

5G9 


DIGEST    OF   INCORPORATION  ACTS.  —  VERMONT. 

of  the  charter  tax  on  or  before  the  1st  day  of  March  in  each  year  shall  extend 
the  time  one  year  from  said  date  within  which  the  corporation  may  organize 
under  its  charter  notwithstanding  the  time  limited  may  be  fixed  in  such  charter 
for  its  organization. 

24.  Dissolution.  —  Dissolution  may  be  voted  at  any  meeting  called  for 
that  purpose  at  which  a  majority  vote  of  the  total  stock  issued  and  outstanding 
is  voted  in  favor  of  winding  up  the  corporate  affairs.  The  decree  of  dissolution 
must  be  obtained  by  application  to  the  Court  of  Chancery  through  the  medium 
of  a  bill  of  complaint  setting  forth  the  county  wherein  the  corporation  has  its 
principal  office,  together  with  such  facts  as  may  be  material,  and  praying  for 
the  winding  up  of  such  corporation.  After  decree  of  dissolution  is  obtained  the 
clerk  of  the  court  shall  forthwith  cause  a  certificate  copy  of  the  decree  to  be 
filed  in  the  office  of  the  Secretary  of  State,  and  when  so  filed  the  existence  of 
the  corporate  shall  terminate  in  accordance  with  the  terms  of  the  decree  (sees. 
4132-4137).  Voluntary  dissolution  to  avoid  payment  of  annual  tax  may 
be  accomplished  by  filing  and  recording  with  the  Secretary  of  State  and  the 
Commissioner  of  State  Taxes  a  verified  statement  sworn  to  by  the  president, 
secretary,  or  any  two  officers  of  the  corporation  stating  that  all  debts  have  been 
paid  and  that  the  corporation  owns  no  property  in  the  State  (sees.  705,  706). 

25.  Annual  License  Fee.  —  On  capital  stock  up  to  $50,000,  $10 ;  and  for 
each  $50,000  or  part  thereof  in  excess  of  $50,000,  $5 ;  but  no  tax  shall  exceed 
$50.  The  fiscal  year  for  the  purpose  of  the  imposition  of  the  annual  license  tax 
commences  the  1st  day  of  February.  All  domestic  corporations  must  file  their 
annual  license  tax  returns  as  of  that  date.  The  tax  must  be  paid  on  or  before 
the  1st  day  of  April  in  each  year  (sees.  690,  695,  697,  703,  704-706,  as  amended 
by  Laws  of  1906,  Act  36). 

26.  Foreign  Corporations.  —  Every  foreign  corporation  desiring  to  do 
business  in  Vermont  must  first  procure  from  the  Secretary  of  State  a  certificate 
that  it  has  complied  with  all  requirements  of  law  to  authorize  it  to  do  business 
in  this  State,  and  that  the  business  of  the  corporation  to  be  carried  on  in  Vermont 
is  such  as  may  be  lawfully  carried  on  by  a  corporation  incorporated  under  the 
laws  of  the  State  for  such  or  similar  line  of  business.  The  requirements  here 
referred  to  are :  First,  that  it  has  filed  in  the  office  of  the  Secretary  of  State  and 
in  the  office  of  the  Commissioner  of  State  Taxes  a  sworn  statement  in  the  Eng- 
lish language  of  its  charter  or  certificate  of  incorporation,  and  a  statement  under 
its  corporate  seal  stating  the  business  it  is  engaged  in  or  which  it  proposes  to 
carry  on  in  the  State,  and  the  place  within  the  State  which  is  to  be  its  principal 
place  of  business,  with  the  person  residing  in  the  State  upon  whom  process  may 
be  served.  The  person  designated  must  have  a  principal  place  of  business 
within  the  State  (sees.  707,  714,  715;  Laws  of  1907;  Act  36;  Laws  of  1910,  chap. 
54).  Within  ten  days  after  the  date  of  its  certificate  of  registration  in  Vermont 
it  must  file  its  annual  tax  returns  and  pay  the  pro  rata  proportion  of  the  annual 
tax  for  the  unexpired  portion  of  the  current  year  (sec.  700,  as  amended  by  Laws 
of  1906,  Act  36;  see  ante,  sec.  19).  A  fee  of  $2  must  be  paid  to  the  Secretary  of 
State  and  to  the  Commissioner  of  State  Taxes  (sec.  716).  By  non-payment 
of  annual  license  tax  by  April  1st  it  forfeits  the  right  to  sue  in  the  State,  and  may 
be  enjoined  from  doing  business  therein  (sec.  710,  as  amended  by  Laws  of 
1906,  Act  36;  see  also  sees.  1344,  4644^649  of  the  Laws  of  1906,  Act  75).  For- 
eign corporations  must  file  the  same  reports  as  domestic  corporations  (Laws  of 
1911,  chap.  37,  sec.  2). 

Osborne  v.  Ins.  Co.,  57  Vt.  278. 

570 


DIGEST    OF    INCORPORATION    ACTS. — VIRGINIA. 


VIRGINIA. 

(The  references  cited  below  are  to  Pollard's  Virginia  Code,  1904.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Virginia  is  to  be  found  in  Pollard's  Virginia 
Code  of  1904,  title  17,  sees.  46  and  46  a,  1068  to  1105  e.  The  same  is  also  to  be 
found  in  the  Session  Laws  of  Virginia  for  1902-1904,  chaps.  437-484.  Under 
the  foregoing,  charters  may  be  procured  for  any  lawful  business.  (See  also 
Laws  of  1904,  chap.  50.) 

2.  Incorporators.  —  Three  or  more.  There  are  no  residential  require- 
ments (sec.  1105  a,  ss.  1). 

3.  Contents  of  the  Articles  of  Incorporation.  —  The  articles  must  set 
forth : 

a.  Name.  —  Name  must  contain  the  word  "corporation  "  or  "incorporated," 
and  must  be  such  as  to  distinguish  it  from  any  other  corporation  engaged  in  a 
similar  line  of  business  (sec.  1105  a,  2). 

b.  Domicile.  —  Name  of  the  county,  and  the  post-office  address  therein, 
city,  or  town  where  the  principal  office  within  the  State  is  to  be  located  (Id. ; 
Acts  of  1910,  p.  43). 

c.  Purposes.  —  Purposes  for  which  it  is  formed.  There  may  be  any  number 
not  covered  by  special  act  (Id.). 

d.  Capital  Stock.  —  Maximum  and  minimum  amount  of  capital  stock  and 
number  of  shares.  If  preferred  stock  is  desired,  there  must  be  inserted  a 
■description  of  the  several  classes  of  stock,  with  the  terms  on  which  they  are 
created  (Id.). 

e.  Duration.  —  May  be  perpetual,  if  desired  (Id.). 

/.  Officers  and  Directors.  —  Names  and  residences  of  officers  and  directors 
for  the  first  year  (Id.).    Directors  may  be  classified,  if  desired  (sec.  1105  e,  12). 

g.    Real  Estate.  —  Limitation  upon  amount  of  holdings  thereof  (Id.). 

h.  Regulation  of  Internal  Affairs.  —  Any  provisions  may  be  inserted  for 
the  conduct  of  the  affairs  of  the  corporation ;  also  any  provisions  defining, 
limiting,  or  regulating  the  powers  of  the  corporation  to  the  directors  or  stock- 
holders (Id.). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers,  the  following  additional  powers  are  granted :  To  take  real 
and  personal  estate  by  gift,  devise,  or  bequest;  to  subscribe,  guaranty,  or 
become  surety  in  respect  to  stock  and  bonds  of  other  corporations ;  to  conduct 
business  in  other  States  and  Territories  and  foreign  countries ;  to  hold  meetings 
of  directors  within  or  without  the  State ;  to  have  offices,  to  hold,  purchase, 
mortgage,  or  convey  real  and  personal  property  both  within  and  without  the 
State ;  to  authorize  voting  by  proxy  in  the  election  of  directors ;  to  classify 
directors ;  to  permit  the  insertion  in  the  articles  of  a  provision  delegating  the 
power  to  adopt  by-laws  to  the  directors;  to  remove  directors;  to  forfeit 
stock  for  non-payment  of  assessments ;  to  issue  preferred  stock ;  to  permit 
cumulative  voting  by  inserting  provision  therefor  in  the  articles;  power  to 
insert  in  the  articles  provision  conferring  upon  the  bondholders  right  to  vote 
in  respect  to  corporate  affairs,  management,  and  consolidation  with  other 
•corporations  (sec.  1105  e,  2-8,  10,  12,  13,  16,  19,  40-42).    The  statute  authorizes 

571 


PIGEST    OF   INCORPORATION    ACTS. — VIRGINIA. 

the  directors  to  appoint  an  executive  committee  of  two  or  more  directors  from 
their  own  number  (sec.  1105  a,  13). 

5.  Procuring  the  Charter.  —  Such  certificate  shall  be  signed  by  at  least 
three  persons,  and  shall  be  acknowledged  by  them,  before  an  officer  authorized 
by  the  laws  of  this  State  to  take  acknowledgment  of  deeds,  and  shall  be  pre- 
sented in  term  time  or  in  vacation  to  the  judge  of  the  Circuit  Court  of  the  court, 
or  of  the  circuit,  corporation,  or  chancery  court  of  the  city  wherein  the  principal 
office  of  the  corporation  is  to  be  located.  Such  judge  shall  thereupon  certify 
thereon  whether  in  his  opinion  such  certificate  is  signed  and  acknowledged  in 
accordance  with  the  requirements  of  this  act,  and  if  in  all  respects  it  is  valid. 
As  soon  as  the  certificate  is  so  endorsed  by  the  judge  and  the  fee  and  tax,  if 
any,  required  by  law  to  be  paid  to  the  State  upon  the  charter  shall  have  been 
duly  paid,  it,  together  with  the  receipt  for  such  payment,  separate  certified 
checks  or  bank  drafts,  postal  note  or  money  order,  one  payable  to  the  Secretary 
of  the  Commonwealth,  and  one  payable  to  the  clerk  of  the  proper  court  for  the 
amount  of  the  proper  fees  for  recording  such  charter,  may  be  presented  to  the 
State  Corporation  Commission,  which  shall  ascertain  and  declare  whether  the 
applicants  have  complied  with  the  requirements  of  the  law  entitling  themselves 
to  the  charter,  and  shall  issue  or  refuse  the  same  accordingly.  When  so  issued 
the  certificate  with  all  endorsements,  together  with  the  order  thereon  to  the 
State  Corporation  Commission  as  required  by  law  to  the  Secretary  of  the  Com- 
monwealth, and  by  the  last-named  officer  recorded  in  the  charter  records  of 
his  office,  who  shall  thereupon  certify  the  same  to  the  clerk  of  the  Circuit 
Court  of  the  county,  or  to  the  corporation  court  of  the  city  wherein  the  principal 
office  of  such  corporation  is  located,  or  to  the  clerk  of  the  chancery  court  of 
the  city  of  Richmond,  when  such  principal  office  is  located  in  said  city,  who 
shall  likewise  record  the  same  in  a  book  to  be  provided  and  kept  for  the  pur- 
pose in  his  office,  and  when  so  recorded  the  fact  of  such  recordation  shall  be 
endorsed  upon  the  said  certificate,  and  the  said  certificate  with  all  endorsements 
thereon  shall  be  returned  by  the  said  clerk  to  the  State  Corporation  Commis- 
sion and  lodged  and  preserved  in  the  office  of  its  clerk.  As  soon  as  the  charter 
shall  have  been  lodged  for  recordation  in  the  office  of  the  Secretary  of  the  Com- 
monwealth, the  persons  who  signed  and  acknowledged  said  certificate,  and 
their  successors  and  such  other  persons  as  may  be  associated  with  them,  accord- 
ing to  the  provisions  of  law  or  of  their  charter  shall  be  a  body  politic  and  cor- 
porate by  the  name  set  forth  in  the  said  certificate  together  with  the  powers, 
and  upon  the  terms  set  forth  therein,  and  so  far  as  not  in  conflict  with  this  act ; 
and  in  addition  shall  have  all  the  general  powers  and  be  subject  to  all  general 
restrictions  and  liabilities  conferred  and  imposed  by  this  act,  and  by  the  gen- 
eral laws  of  this  State  applicable  thereto,  not  in  conflict  with  this  act,  or  with 
said  charter  as  hereinbefore  provided.  Any  failure  on  the  part  of  the  said  clerk 
to  comply  with  the  provisions  of  this  section  shall  subject  him  to  a  fine  of  not 
less  than  $10,  nor  more  than  $100,  to  be  imposed  by  the  State  Corporation 
Commission  (sec.  1105,  a,  3;   as  amended  by  Acts  of  1908,  chap.  335). 

6.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon  the 
amount  of  corporate  indebtedness.  The  statute  expressly  gives  the  right  to 
a  corporation  to  create  a  bonded  indebtedness.  No  corporation  created  under 
the  laws  of  this  State  shall  create  any  bonded  indebtedness,  or  increase  its 
bonded  indebtedness,  to  be  secured  by  hen  on  any  of  its  property  or  franchises, 
until  the  creation  of  such  bonded  indebtedness,  or  the  increase  of  such  bonded 
indebtedness  be  sanctioned  by  a  vote  in  person  or  by  proxy  of  a  majority  in 

572 


DIGEST    OF  INCORPORATION   ACTS. — VIRGINIA. 

amount  of  all  the  stockholders  having  voting  powers  present  or  represented  and 
voting,  at  a  meeting  of  the  stockholders  called  by  the  Board  of  Directors  of  the 
corporation  for  that  purpose,  of  which  meeting  notice  by  publication  at  least 
six  times  a  week  for  two  successive  weeks  prior  to  such  meeting,  in  some  news- 
paper published  in  or  near  the  place  where  its  principal  office  is  located,  or  notice 
in  writing  must  be  given  to  each  stockholder  of  record  by  serving  the  same  on 
him  personally,  or  by  mailing  to  him,  addressed  to  the  postoffice  nearest  his 
place  of  residence,  as  it  appears  on  the  stock  books  of  the  corporation,  at  least 
ten  days  prior  to  such  meeting;  and  in  such  notice  must  be  stated  the  time  and 
place  of  the  meeting  and  its  object.  If  at  such  meeting  a  majority  in  amount  of 
all  the  stockholders  present  or  represented  and  voting,  shall  vote  in  favor  of 
creating  such  bonded  indebtedness  or  of  increasing  such  bonded  indebtedness, 
bonds  of  such  corporation  may  then  be  issued  to  the  amount  authorized  by  the 
vote  of  the  stockholders,  as  hereinbefore  provided,  and  the  payment  thereof 
with  the  interest  to  accrue  thereon,  may  be  secured  in  such  manner  and  upon 
such  terms  as  the  stockholders  at  such  meeting  may  by  resolution  prescribe- 
provided,  however,  that  no  such  bonds  shall  be  issued  until  after  full  compliance 
with  the  provisions  of  article  one  hundred  and  sixty-seven  of  the  Constitution 
of  this  State,  so  far  as  applicable;  and  in  default  thereof  any  such  corporation 
shall  be  subject  to  all  the  penalties  prescribed  in  this  act  against  corporations 
for  issuing  bonds  or  stock  without  having  first  complied  with  the  provisions  of 
said  article  of  the  Constitution;  provided,  further,  that  nothing  in  this  act 
shall  apply  to  any  note  or  bond  given  for  the  deferred  instalments  of  the  pur- 
chase price  of  property  and  secured  by  deeds  of  trust  on  the  property,  nor  to 
any  corporation  dealing  in  real  estate,  taken  in  the  usual  course  of  business, 
nor  to  any  note  or  bond  given  for  the  deferred  instalments  of  the  purchase 
price  of  rolling  stock  leased  or  purchased  by  railroad  corporations  (Laws  of  1912, 
p.  57).  If  provision  is  so  made  in  the  articles  of  incorporation  or  by  amendment 
thereto,  voting  powers  in  the  corporation  may  be  granted  to  bondholders  (sec. 
1105  e,  4,  29). 

7.  Organization  Tax. — On  capitalization  of  $50,000  or  less,  $10;  over 
$50,000  and  less  than  $3,000,000,  20  cents  for  each  $1000  or  fraction  thereof; 
$3,000,000  or  more,  $600.  (The  foregoing  schedule  does  not  apply  to  trans- 
portation or  transmission  companies.)  (Laws  of  1902-3-4,  chap.  148,  sec.  38; 
see  Act  of  February  26,  1910.) 

8.  Filing  and  Recording  Fees.  —  The  organization  tax  is  payable  to  the 
Secretary  of  the  Commonwealth.  The  following  additional  fees  are  charged : 
$1  for  application  of  the  seal  of  the  Charter  Commission  to  the  certificate,  and 
50  cents  per  page  plus  $2  for  recording  the  charter  in  the  office  of  the  Secretary 
of  the  Commonwealth.  The  registration  fee  as  well  as  the  franchise  tax  is  pay- 
able annually  on  or  before  March  1st  of  each  year.  The  annual  franchise  tax 
is  payable  to  the  order  of  the  Treasurer  of  Virginia,  and  forwarded  to  the  Audi- 
tor of  Public  Accounts  at  Richmond.  There  is  no  charge  for  the  approval  of 
the  local  judge,  or  for  obtaining  his  certificate  to  the  effect  that  the  certificate 
of  incorporation  is  executed  according  to  law.  The  State  Charter  Commission 
charges  SI  for  certificate  under  seal  that  the  applicants  for  a  charter  have  com- 
plied with  the  requirements  of  law  and  are  entitled  to  a  charter.  The  Secretary 
of  the  Commonwealth  makes  no  additional  charge  other  than  the  charges  re- 
ferred to  above  for  giving  his  certificate  to  the  clerk  of  the  Circuit  Court  as  to 
the  filing  in  his  office  of  the  certificate  of  incorporation.    The  charges  for  filing 

573 


DIGEST    OF    INCORPORATION    ACTS.  —  VIRGINIA. 

and  recording  in  the  local  office  (e.  g.,  clerk  of  the  State  court)  are  the  same  as 
for  the  Secretary  of  the  Commonwealth  given  above.  The  State  Charter  Com- 
mission makes  no  charge  for  finally  lodging  the  certificate  of  incorporation  in 
their  office.  The  Secretary  of  the  Commonwealth  charges  $1.50  for  issuing  cer- 
tificate of  incorporation.  The  cost  of  certified  copy  of  the  certificate  of  incor- 
poration is  50  cents  per  page,  50  cents  for  certificate  plus  $1  for  application  of 
seal  when  required  under  seal.  There  are  no  charges  made  for  filing  and  record- 
ing report  as  to  officers,  directors,  etc.  Under  sec.  39,  chap.  5,  of  the  act  concern- 
ing corporations,  a  report  is  required  to  be  filed  with  the  Charter  Commission. 
Under  sec.  14,  chap.  1,  of  the  same  act  a  report  is  required  to  be  filed  with  the 
clerk  of  the  court.  There  is  no  charge  as  to  the  report  under  sec.  39,  chap.  5,  of 
the  Corporation  Act,  but  a  charge  of  25  cents  to  the  clerk  of  the  court  for  the 
report  under  sec.  14,  chap.  1,  is  made.  There  is  an*  additional  charge  of  50 
cents  per  page  where  the  certificate  of  incorporation  exceeds  two  pages  in 
length. 

9.  Commencing  Business.  —  Business  may  be  commenced  as  soon  as 
the  certificate  has  been  recorded  and  approved  as  required  by  law,  and  as  soon 
as  the  minimum  capital  stock  as  fixed  by  the  certificate  of  incorporation  has 
been  filed.  Before  any  capital  stock  can  be  issued  there  must  be  submitted  to 
the  State  Corporation  Commission  a  statement  relative  to  the  financial  plan  on 
which  such  stock  issued  is  to  be  made.  (See  post,  sec.  16.)  The  corporation 
must  commence  business  within  two  years  after  the  date  of  the  issuance  of 
the  charter  (sec.  1105  e,  39;  1105  a,  14).  Within  thirty  days  after  the  first 
election  of  officers  and  directors  a  report  authenticated  by  the  signature  of  the 
president  or  one  of  the  vice-presidents  or  the  secretary  of  the  corporation  must 
be  filed  in  the  office  of  the  State  Corporation  Commission,  stating  character  of 
its  business,  corporate  name,  location,  name  of  agent  upon  whom  process  may 
be  served,  amount  of  its  authorized  capital  stock,  amount  actually  issued  and 
outstanding,  names  and  addresses  and  terms  of  office  of  officers  and  directors, 
and  date  of  annual  meeting  (sec.  1105,  14). 

Every  corporation,  all  of  whose  officers  and  directors  are  non-residents  of 
the  city  or  county  in  which  its  principal  offices  are  located,  shall,  before  com- 
mencing to  do  business,  by  written  power  of  attorney  appoint  some  practising 
attorney  at  law,  residing  in  the  city  or  county  wherein  the  principal  office  of 
such  corporation  is  located,  its  attorney  or  agent,  upon  whom  all  legal  process 
against  the  corporation  may  be  served,  and  who  shall  be  authorized  to  enter 
an  appearance  in  its  behalf.  Such  power  of  attorney  shall  be  recorded  in  the 
clerk's  office  of  the  Circuit  Court  of  the  county  or  of  the  clerk's  office  of  the 
circuit,  corporation,  or  chancery  court  of  the  city  wherein  the  principal  office 
of  such  corporation  is  located.  And  such  power  of  attorney  shall  remain  effective 
until  lawfully  revoked,  and  when  lawfully  revoked  shall  be  immediately  re- 
executed  and  recorded.  A  duplicate  of  such  power  of  attorney  shall  be  filed 
with  the  clerk  of  the  State  Corporation  Commission.  Written  notice  of  the 
resignation  or  voluntary  revocation  of  such  power  of  attorney  by  the  cor- 
poration shall  be  forthwith  filed  in  the  clerk's  office  wherein  it  is  recorded,  and 
the  clerk  shall  note  such  resignation  or  revocation  on  the  margin  of  the  page 
of  the  book  wherein  the  power  of  attorney  is  recorded,  and  be  entitled  to  a  fee 
of  twenty-five  cents  therefor,  and  until  this  is  done  such  revocation  shall  be 
ineffective  and  the  original  power  of  attorney  shall  remain  effective.  If  there 
be  no  such  attorney  in  fact  in  office  residing  in  such  county  or  city,  then  alL 
legal  process  against  such  corporation  may  be  served  upon  the  clerk  of  the  court 

574 


DIGEST    OF   INCORPORATION    ACTS. — VIRGINIA. 

of  such  county  or  city,  wherein  is  such  principal  office  having  jurisdiction  of 
the  suit,  action,  or  proceeding.  Any  such  corporation  failing  to  comply  with 
the  provisions  of  this  section  within  sixty  days  after  its  annual  meeting,  shall 
be  fined  not  less  than  $50  nor  more  than  $100,  and  each  day's  continuance  of 
such  failure  may  be  construed  to  be  a  separate  offence  under  this  section,  such 
fine  to  be  imposed  and  enforced  by  the  State-  Corporation  Commission,  with 
right  of  appeal  to  the  Supreme  Court  of  appeals;  and  if  any  such  corporation 
shall  be  in  default  for  more  than  six  months  in  complying  with  the  provisions 
of  this  section,  the  State  may  proceed  against  such  corporation  by  writ  of  quo 
warranto,  or  information  in  the  nature  of  a  writ  of  quo  warranto,  for  the  vaca- 
tion and  forfeiture  of  its  charter,  and  upon  judgment  in  such  proceeding  against 
any  such  corporation,  its  charter  shall  thereafter  be  vacated  and  forfeited.  Such 
proceeding  shall  be  instituted  and  prosecuted  by  the  attorney  general,  at  the 
request  of  the  State  Corporation  Commission  (Acts  of  1910,  p.  43). 

10.  Organization  Meeting. — The  organization  meeting  should  prop- 
erly be  held  within  the  State  (sec.  1105  a,  sub.  4).  The  corporation  must  or- 
ganize and  commence  business  within  two  years  after  granting  of  the  charter. 
Incorporators  may  assign  their  interests,  if  desired  (sec.  1105  e,  6;  sec. 
1105  e,  51). 

11.  Meetings  of  Stockholders  and  Directors.  —  The  annual  meeting 
of  the  stockholders  must  be  held  within  the  State.  It  would  seem  that  special 
meetings  should  likewise  be  held  within  the  State  (Acts  of  1910,  p.  43) .  Direc- 
tors' meetings  may  be  held  within  or  without  the  State  as  the  by-laws  provide 
(sec.  1105  e,  7). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  at  least  three  directors,  including  the  president,  who  must  be  a 
director.  The  act  provides  for  the  appointment  by  directors  of  an  executive 
committee  to  manage  the  business  of  the  corporation  (sec.  1105  a,  sub.  13; 
sec.  1105  e,  10).     Directors  may  be  classified,  if  desired  (sec.  1105  e,  sub.  12). 

b.  Liabilities.  —  Directors  are  jointly  and  severally  liable  for  any  damage 
resulting  from  their  wilfully  and  fraudulently  causing  to  be  published  or  given 
out  a  report  of  the  condition  or  business  of  the  corporation  known  to  them  to 
be  false  in  any  material  respect.  To  enforce  this  liability  action  must  be  brought 
within  two  years  after  the  right  of  action  accrues  (sec.  1105  e,  26,  35). 
They  are  also  liable  for  illegal  declaration  of  dividends,  if  they  do  not  dissent 
therefrom  (1105  e,  60). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  only  liable  for  their 
unpaid  stock  subscriptions  (1105  e,  9).  No  stock  can  be  assigned  on  the  books 
of  the  corporation  without  the  consent  of  the  corporation  until  all  dues  and 
debts  are  paid  thereon  (1105  e,  57).  If  the  stock  is  assigned  before  all  stock 
subscriptions  are  paid  thereon,  the  assignee  is  liable  for  any  instalments  which 
have  accrued  or  which  may  thereafter  accrue  under  the  subscription  agree- 
ment (Id.). 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
signed  by  the  president  or  one  of  the  vice-presidents  and  the  treasurer,  or  by 
any  two  officers  of  the  corporation  thereto  authorized  by  the  board  of  directors 
i     c.  1 105  e,  14).    As  to  lost  certificates  of  stock,  see  Acts  of  1910,  p.  580. 

15.  Preferred  Stock.  —  Preferred  stock  is  expressly  authorized  by  the 
act.  Provision  may  be  made  for  the  issuance  of  the  same  either  in  the  original 
certificate  or  by  subsequent  amendment  thereto.  Preferred  stock  may  be 
issued,  if  desired,  subject  to  redemption,  three  years  after  the  issue  thereof 

575 


DIGEST    OF    INCORPORATION    ACTS.  —  VIRGINIA. 

at  a  price  not  less  than  par.  Every  corporation  shall  have  power  to  create 
two  or  more  kinds  of  stock  of  such  classes,  with  such  distinctions,  pref- 
erences, and  voting  powers  or  restrictions  or  qualifications  as  shall  be  stated 
or  expressed  in  the  charter,  certificate  of  incorporation,  or  articles  of  associa- 
tion, or  in  any  amendment  thereof ;  and  the  power  to  increase  or  decrease  the 
stock,  as  in  this  act  elsewhere  provided,  shall  apply  to  all  or  any  of  the  classes 
of  stock.  Any  preferred  stock  that  may  be  issued  may,  if  desired,  be  made  sub- 
ject to  redemption  at  any  time  after  three  years  from  the  issue  thereof  at  a  price 
not  less  than  par,  and  the  holders  thereof  shall  be  entitled  to  receive,  and  the 
corporation  bound  to  pay  thereon,  dividends  at  such  rates  and  on  such  conditions 
as  shall  be  stated  in  its  charter  or  any  amendment  thereof,  or  in  the  original  or 
amended  certificate  of  incorporation  or  articles  of  association  or  any  amend- 
ment thereof,  and  such  dividends  may  be  made  payable  before  any  dividends 
shall  be  set  apart  or  paid  on  the  common  stock,  and  such  dividends  may  be 
made  cumulative  (sec.  1105  a,  2,  also  1105  e,  3). 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  for  money,  land, 
or  other  property,  real  or  personal,  leases,  options,  mines,  minerals,  mineral 
rights,  patent  rights,  rights  of  way,  easements,  contracts,  labor,  or  services. 
The  act  provides  that  there  shall  be  no  individual  liability  on  any  subscriber 
beyond  the  obligation  to  comply  with  his  contract  of  subscription.  Under  the 
Constitution  of  1902,  sec.  167,  it  is  provided  that  whenever  stocks  or  bonds 
are  to  be  issued  by  a  corporation  it  shall,  before  issuing  the  same,  file  with  the 
State  Corporation  Commission  a  statement  (verified  by  the  oath  of  the  president 
or  secretary  of  the  corporation)  in  such  form  as  may  be  prescribed  by  the  com- 
mission, stating  fully  and  correctly  the  basis  or  financial  plan  upon  which  stock 
or  bonds  are  to  be  issued;  and  where  such  basis  or  financial  plan  includes  ser- 
vices or  property  received  or  to  be  received  by  the  company,  such  statement 
shall  correctly  specify  and  describe,  in  the  manner  prescribed  or  required  by  the 
commission,  the  services  and  property,  together  with  the  valuation  at  which 
the  same  are  received  or  to  be  received.  (See  also  Code  of  1904,  sec.  1105  e,  9.) 
The  act  further  provides  that  the  judgment  of  the  directors  as  to  the  value  of 
the  property  taken  in  exchange  for  stock  shall,  in  the  absence  of  fraud  in  the 
transaction,  be  conclusive.  For  violating  this  provision  a  fine  of  $1,000  may 
be  imposed,  and  judgment  entered  therefor  by  the  said  Corporation  Commission, 
which  is  given  judicial  powers  for  this  purpose  (sec.  1105  e,  9). 

17.  Books. — Transfer  books  must  be  kept  (sec.  1105  e,  18). 

18.  Office  and  Agent.  —  Corporations  must  have  a  principal  office  within 
the  State.  In  case  the  officers  and  directors  are  non-residents  of  the  county, 
city,  or  town  where  the  principal  office  is  located,  they  must  annually,  by 
written  power  of  attorney,  appoint  some  practising  attorney  at  law  residing 
therein,  as  their  attorney  or  agent  upon  whom  service  of  process  may  be  made, 
who  shall  be  authorized  to  enter  an  appearance  in  its  behalf.  This  power  of 
attorney  must  be  recorded  in  the  clerk's  office  of  the  Circuit  Court  of  the  county 
or  the  Corporation  or  Chancery  Court  of  the  city  wherein  the  principal  office 
of  the  corporation  is  located.  It  must  also  be  filed  in  the  office  of  the  Secre- 
tary of  the  Commonwealth  (sec.  1105  a,  2;   also  sec.  1105  e,  5,  39). 

19.  Reports.  —  Companies  incorporated  under  the  general  laws  must, 
within  thirty  days  after  the  annual  meeting,  file  in  office  of  State  Corporation 
Commission  a  report  stating  name  of  the  corporation,  location,  character  of 
business,  authorized  capital  stock,  amount  issued  and  outstanding,  names  and 
addresses  of  officers  and  directors,  date  of  next  annual  meeting.     Every  cor- 

576 


DIGEST    OF    INCORPORATION    ACTS.  —  VIRGINIA. 

poration  must  file  with  the  State  Corporation  Commission  by  February  1st  of 
each  year  report  of  the  amount  of  its  maximum  capital  stock.  Every  corpora- 
tion shall  also,  at  the  time  of  paying  its  annual  registration  fee,  make  to  the  State 
Corporation  Commission  such  report  of  its  status,  business,  or  condition  as  the 
State  Corporation  Commission  shall  require.  Non-compliance  with  these  pro- 
visions subjects  the  corporation  to  a  fine  of  not  less  than  $25  and  not  more  than 
SI  00  for  each  thirty  days'  default  (sec.  1105  e,  39).  Every  corporation  shall, 
after  the  annual  meeting  of  its  stockholders,  certify  to  the  clerk  of  the  Circuit 
Court  of  the  county  or  the  clerk  of  the  Circuit,  Corporation,  or  Chancery  Court 
of  the  city  wherein  is  located  its  principal  office,  a  list  of  the  officers  and 
directors  of  such  corporation  elected  at  said  annual  meeting  (chap.  1,  sec. 
14).  A  fee  of  25  cents  must  be  paid  for  filing  such  certificate  (Acts  of  1910 
p.  43). 

20.  Anti-Trust  Statute.  —  The  Constitution  of  1902,  sec.  165,  provides 
that  the  General  Assembly  shall  enact  laws  preventing  all  trusts,  combinations, 
and  monopolies  inimical  to  the  public  welfare.     (See  Laws  of  1907.) 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Whenever  the 
principal  purpose  for  which  the  corporation  was  formed  has  failed,  or  the  man- 
agement thereof  is  abandoned  by  its  officers,  or  when  operations  under  the 
charter  have  been  suspended  or  abandoned  for  a  period  of  three  years,  or  the 
corporation  has  become  insolvent,  the  charter  of  such  corporation  is  liable  to 
forfeiture  or  may  be  dissolved  (sec.  1105  a,  15;  Acts  of  1908,  chap.  335). 
Charters  may  be  forfeited  for  failure  to  appoint  resident  agent  when  all  the 
officers  and  directors  are  non-residents  of  the  county  wherein  the  principal  place 
of  business  is  located  (Acts  of  1910,  p.  43). 

22.  Amendments.  —  Before  the  amount  of  stock  fixed  by  the  incorpo- 
rators as  the  minimum  capitalization  shall  have  been  subscribed,  any  amend- 
ment to  the  original  certificate  may  be  made  by  a  supplemental  certificate 
signed  and  acknowledged  by  the  incorporators,  and  certificate  issued  and  re- 
corded in  the  office  of  the  State  Corporation  Commission  in  the  same  manner 
as  provided  in  reference  to  the  original  certificate  (sec.  1105  a,  5). 

At  any  time  after  such  subscription  shall  have  been  completed,  the  sub- 
scribers to  the  capital  stock  may,  until  the  corporation  is  duly  organized,  apply 
to  the  State  Corporation  Commission  for  any  amendment  to  the  original  certifi- 
cate, and  to  that  end  may  present  the  State  Corporation  Commission  a  supple- 
mental certificate  signed  and  acknowledged  by  them  in  the  same  manner  as  in 
the  case  of  the  original  certificate  certified  by  a  judge  as  provided  in  the  case 
of  original  certificates,  and  thereupon  said  State  Corporation  Commission  shall 
act  thereon  in  the  same  manner  as  provided  in  the  case  of  such  original  certifi- 
cates ;  and  if  the  amendment  be  issued,  then  such  supplemental  certificate,  to- 
gether  with  all  endorsements  and  order  of  the  commission  thereon,  shall  be 
recorded  in  the  office  of  the  State  Corporation  Commission  as  is  provided  in  the 
case  of  original  certificates,  and  when  lodged  in  the  office  of  the  Secretary  of  the 
Commonwealth  for  record  the  original  charter  shall  he  deemed  to  he  altered  or 
amended  accordingly  (sec.  1105  a,  6). 

At  any  time  after  organization  any  such  corporation  may  change  the  nature 
of  its  business,  change  its  name,  decrease  its  capital  stock,  change  the  par  value 
of  the  shares  of  its  capital  stock,  change  the  location  of  its  principal  office  in 
this  State,  extend  its  corporate  existence,  create  one  or  more  classes  of  pre- 
ferred stock,  and  make  such  other  amendments,  changes,  or  alterations  as  may 
be  desired  in  the  manner  following,  except  that  no  increase  of  capital  stock 

37  577 


DIGEST   OF   INCORPORATION   ACTS.  —  VIRGINIA. 

shall  be  made  otherwise  than  in  the  manner  prescribed  in  sec.  9  of  this  act  (sec. 
1105  a,  7). 

The  board  of  directors  shall  pass  a  resolution  declaring  that  such  amend- 
ment, change,  or  alteration  is  advisable,  and  calling  a  meeting  of  the  stock- 
holders to  take  action  thereon,  the  meeting  to  be  held  upon  notice  by  publication 
at  least  six  times  a  week  for  two  successive  weeks  prior  to  such  meeting  in  some 
newspaper  published  in  or  near  the  place  where  its  principal  office  is  located, 
or  notice  in  writing  to  each  of  the  stockholders,  to  be  served  on  him  personally, 
or  by  mailing  the  same  to  him  to  his  last  known  post-office  address,  at  least  ten 
days  prior  to  such  meeting ;  such  notice  must  state  the  time  and  place  of  the 
meeting  and  its  object.  If  two-thirds  in  interest  of  each  class  of  the  stockholders 
having  voting  power  shall  vote  in  favor  of  such  amendment,  change,  or  alteration, 
a  certificate  thereof  shall  be  made  by  the  president  or  by  one  of  the  vice-presi- 
dents, under  the  seal  of  the  corporation,  attested  by  the  secretary  and  acknowl- 
edged by  them  before  an  officer  authorized  by  the  laws  of  the  State  to  take 
acknowledgments  of  deeds.  Such  certificate,  and  if  the  amendment  or  altera- 
tion be  one  in  respect  to  which  the  payment  of  a  fee  to  the  State  is  imposed 
by  law,  a  receipt  for  such  payment  shall  be  presented  to  the  State  Corporation 
Commission,  which  shall  ascertain  and  declare  whether  the  said  applicant,  by 
complying  with  the  requirements  of  the  law,  is  entitled  to  the  amendment, 
alteration,  or  extension  set  forth  in  said  certificate,  and  shall  issue  or  refuse  the 
same  accordingly.  If  the  same  is  issued,  the  said  certificate  with  the  endorse- 
ments thereon,  together  with  the  order  thereon  of  the  commission,  shall  be  forth- 
with certified  as  required  by  law  to  the  Secretary  of  fhe  Commonwealth,  to  be 
recorded  by  the  last-named  officer  as  provided  in  reference  to  original  certifi- 
cates, and  shall  be  certified  by  him  to  the  clerk  of  the  Circuit  Court  of  the  county, 
or  the  Circuit,  Corporation,  or  Chancery  Court  of  the  city  in  which  the  original 
certificate  of  incorporation  is  recorded,  and  the  clerk  of  such  court  shall  there- 
upon record  the  same  in  his  office  in  a  book  provided  and  kept  for  the  recorda- 
tion of  charters,  and  shall  endorse  the  fact  of  such  recordation  upon  the  said 
certificate,  and  return  the  same  to  the  State  Corporation  Commission,  to  be 
lodged  and  preserved  in  the  office  of  its  clerk.  As  soon  as  the  said  certificate 
is  lodged  for  recordation  in  the  office  of  the  Secretary  of  the  Commonwealth, 
the  original  certificate  of  incorporation  shall  be  deemed  to  be  amended  accord- 
ingly; provided,  however,  that  such  certificate  of  amendment,  change,  or  altera- 
tion shall  contain  only  such  provisions  as  it  would  be  lawful  and  proper  to  insert 
in  an  original  certificate  of  incorporation,  made  at  the  time  of  making  such 
amendment  or  alteration,  (sec.  1105  a,  8;  as  amended  by  Laws  of  1910,  chap. 
174). 

In  case  the  capital  stock  of  any  corporation  organized  under  this  chapter 
or  under  any  charter  heretofore  granted  by  any  court,  or  by  the  General  As- 
sembly of  this  State,  for  any  purpose  permitted  under  sec.  1  of  this  chapter, 
is  found  to  be  insufficient  for  its  purposes,  such  corporation  may  increase  its 
capital  stock  from  time  to  time  to  any  amount  that  it  may  deem  requisite,  such 
increase  to  be  sanctioned  by  a  vote  in  person  or  by  proxy  of  two-thirds  in 
amount  of  all  the  stockholders  who  shall  be  present  or  represented  and  voting 
at  a  meeting  of  the  stockholders,  which  two-thirds  shall  amount  to  at  least  a 
majority  of  the  capital  stock  of  the  corporation,  called  by  the  directors  for  that 
purpose  by  a  notice  by  publication  at  least  six  times  a  week,  for  two  successive 
weeks  prior  to  such  meeting,  in  some  newspaper  published  in  or  near  the  place 
where  its  principal  office  is  located,  or  notice  in  writing  to  each  of  the  stock- 
578 


DIGEST    OF   INCORPORATION    ACTS. VIRGINIA. 

holders,  to  be  served  on  him  personalty,  or  by  mailing  the  same  to  him  at  his 
last  known  post-office  address,  at  least  ten  days  prior  to  such  meeting ;  such 
notice  must  state  the  time  and  place  of  the  meeting  and  its  general  object,  and 
the  amount  to  which  it  is  proposed  to  increase  the  capital  stock.  The  proceed- 
ings of  said  meeting  must  be  entered  on  the  minutes  of  the  proceedings  of  the 
stockholders ;  and  if  two-thirds  in  amount  of  such  stockholders  vote  in  favor 
of  such  increase,  a  certificate  thereof  shall  be  made  by  the  president,  or  by  one 
of  the  vice-presidents,  under  the  seal  of  the  corporation  attested  by  the  secretary, 
and  shall  be  acknowledged  by  said  officers  signing  the  same  before  any  officer 
authorized  by  the  laws  of  the  State  to  take  acknowledgments  of  deeds;  and 
when  so  acknowledged,  it,  together  with  the  receipt  for  the  payment  of  any  fee 
to  the  State  which  may  be  imposed  by  law  for  such  increase  of  capital,  may  be 
presented  to  the  State  Corporation  Commission,  which  shall  ascertain  and  declare 
whether  the  said  corporation  has,  by  complying  with  the  requirements  of  the 
law,  entitled  itself  to  make  such  increase  of  the  capital  stock  of  said  corporation, 
and  accordingly  shall  issue  or  refuse  a  certificate  for  said  increase  of  capital. 
If  the  amendment  to  the  charter  of  such  corporation  allowing  such  increase  of 
capital  be  issued,  it  shall  be  certified  by  the  commission  as  required  by  law  to 
the  Secretary  of  the  Commonwealth,  and  recorded  by  the  last-named  officer 
in  the  charter  records  of  his  office,  and  by  him  certified  to  the  clerk  of  the  court 
of  the  county  or  city  in  which  the  original  certificate  of  incorporation  is  recorded, 
who  shall  likewise  record  the  same  in  his  office,  and  endorse  upon  such  certifi- 
cate the  fact  of  such  recordation,  and  return  the  same  to  the  State  Corporation 
Commission,  to  be  lodged  and  preserved  in  the  office  of  its  clerk.  As  soon  as  the 
said  certificate  is  lodged  for  recordation  in  the  office  of  the  Secretary  of  the 
Commonwealth,  the  charter  of  said  corporation  shall  stand  so  amended,  and 
the  increase  of  capital  stock  shall  become  effective,  and  from  time  to  time  the 
board  of  directors  may  proceed  to  dispose  of  the  capital  stock  as  so  increased, 
upon  such  terms  and  conditions  and  for  such  considerations  as  they  may  deem 
for  the  best  interests  of  the  corporation,  but  not  until  after  full  compliance  with 
the  requirements  in  that  regard  of  sec.  167  of  the  Constitution  of  the  State  (sec. 
1 105  a,  9) .  Whenever  the  actually  issued  and  outstanding  capit  al  stock  of  any  cor- 
poration organized  under  this  chapter  or  under  any  charter  heretofore  granted 
by  any  court  or  by  the  general  assembly  of  this  State  for  any  purposes  permitted 
under  sec.  1  of  this  chapter,  shall  be  found  to  be  more  than  sufficient  for  its 
purposes,  it  may  with  the  concurrence  of  two-thirds  in  amount  of  all  its  stock- 
holders, given  as  hereinafter  provided,  decrease  its  capital  stock  from  time  to 
time  to  any  amount,  not  less  than  the  minimum  fixed  in  its  charter,  or  some 
amendment  thereof.  Such  decrease  must  be  sanctioned  by  a  vote,  in  person  or 
by  proxy,  of  two-thirds  in  amount  of  the  stockholders  of  the  corporation  at  a 
meeting  of  such  stockholders  called  by  the  Board  of  Directors  for  that  purpose, 
of  which  meeting  notice  by  publication,  at  least  six  times  a  week  for  two  suc- 
cessive weeks  prior  to  such  meeting  in  some  newspaper  published  in  or  near  the 
place  where  its  principal  office  is  located,  or  notice  in  writing  must  be  given  to 
each  stockholder  of  record  by  serving  the  same  on  him  personally,  or  by  mailing 
it  to  him,  addressed  to  the  post-office  nearest  his  place  of  residence,  us  it  appears 
upon  the  stock  books  of  the  corporation,  at  least  ten  days  prior  to  such  meet- 
ing, and  in  such  notice  must  be  stated  the  time  and  place  of  the  meeting,  its 
object,  and  the  amount  to  which  it  is  proposed  to  decrease  the  capital  stock 
If  at  such  meeting  two-thirds  in  amount  of  all  the  stockholders  vote  in  favor  of 
decreasing  the  capital  stock  to  an  amount  not  less  than  the  amount  mentioned 

579 


DIGEST   OF   INCORPORATION    ACTS.  —  VIRGINIA. 

in  such  notice,  which  shall  not  be  less  than  the  minimum  amount  of  authorized 
capital  of  the  corporation,  a  copy  of  the  proceedings  so  far  as  they  relate  to  this 
subject,  entered  upon  the  records  of  the  corporation,  may  be  certified  by  the 
president,  or  by  one  of  the  vice-presidents,  under  the  seal  of  the  corporation, 
attested  by  its  secretary  and  acknowledged  by  them  before  an  officer  authorized 
by  the  laws  of  this  State  to  take  acknowledgments  of  deeds.  A  copy  thus  cer- 
tified may  be  presented  to  the  State  Corporation  Commission,  which  shall 
ascertain  whether  the  applicants  have,  by  complying  with  the  requirements  of 
the  law,  entitled  themselves  to  make  such  decrease  of  the  capital  stock,  and 
accordingly  shall  issue  or  refuse  a  certificate  permitting  the  same,  which  cer- 
tificate shall  be  certified  to  the  Secretary  of  the  Commonwealth  to  be  recorded 
by  the  last-named  officer  as  provided  with  reference  to  original  certificates  and 
shall  be  certified  by  him  to  the  clerk  of  the  circuit  court  of  the  county  or  the  cir- 
cuit, corporation  or  chancery  court  of  the  city  in  which  the  original  certificate 
of  incorporation  is  recorded,  and  the  clerk  of  such  court  shall  thereupon  record 
the  same  in  his  office  in  a  book  provided  and  kept  for  the  recordation  of  char- 
ters and  shall  endorse  the  fact  of  such  recordation  upon  the  said  certificate  and 
return  the  same  to  the  State  Corporation  Commission  to  be  lodged  and  preserved 
in  the  office  of  the  clerk.  When  so  recorded  in  the  office  of  the  Secretary  of  the 
Commonwealth,  the  power  of  the  said  corporation  to  make  such  decrease,  sub- 
ject to  the  provisions  of  sec.  167  of  the  Constitution,  so  far  as  applicable  thereto, 
shall  be  complete. 

The  capital  stock  may  thereupon  be  decreased  in  the  manner  following,  that 
is  to  say,  by  retiring  or  reducing  any  class  of  stock,  or  by  the  surrender  of  every 
stockholder  of  his  shares,  and  the  issue  to  him  in  lieu  thereof  of  a  decreased 
number  of  shares,  or  by  the  purchase  at  the  fair  market  value  not  exceeding 
par,  of  certain  shares  for  retirement,  or  by  retiring  shares  owned  by  the  cor- 
poration, or  by  reducing  the  par  value  of  shares,  and  when  any  corporation  shall 
decrease  the  amount  of  its  capital  stock  as  hereinbefore  provided,  the  certificate 
decreasing  the  same  shall  be  published  for  three  weeks  successively,  at  least 
once  a  week  in  a  newspaper  published  in  the  county  or  city  in  which  the  prin- 
cipal office  of  the  corporation  is  located,  and  if  no  newspaper  be  published  therein, 
then  in  a  newspaper  published  in  a  county  or  city  convenient  thereto,  the  first 
publication  to  be  made  within  fifteen  days  after  the  filing  of  such  certificate; 
provided,  however,  that  no  such  decrease  in  capital  stock  shall  affect  the  right  of 
any  creditor  of  the  said  corporation  existing  at  the  time  of  such  decrease  (Acts 
of  1912,  p.  79). 

23.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for  the 
extension  of  corporate  existence  after  the  expiration  of  the  charter. 

24.  Dissolution.  —  The  incorporators  before  the  payment  of  any  part  of 
the  capital  stock  and  before  beginning  business  may  surrender  all  their  corpo- 
rate rights  and  franchises  by  following  the  steps  prescribed  in  the  statutes. 
After  organization,  on  resolution  of  a  majority  of  the  bv>ard  of  directors,  with 
the  consent  of  two-thirds  in  interest  of  the  stockholders,  Ihe  corporation  may 
be  voluntarily  dissolved  (sec.  1105  a,  11,  12,  15;  see  also  Acts  of  1908,  p.  338). 

25.  Annual  Franchise  Tax.  —  Before  the  1st  day  in  October  in  each  year 
every  domestic  corporation  and  every  foreign  corporation  doing  business  in 
this  State  must  pay  into  the  treasury  of  the  State  a  tax  to  be  assessed  by  the 
State  Corporation  Commission,  as  follows: 

Every  corporation,  joint  stock  company,  or  association  organized  or  created 
under,   by,  or  pursuant   to  law  in  this  State,  except   railway,  canal,  light, 

580 


DIGEST   OF    INCORPORATION    ACTS.  —  VIRGINIA. 

heat,  and  power  companies,  insurance,  banking,  and  surety  companies,  tele- 
phone companies  having  an  authorized  maximum  capital  stock  of  $5000 
or  less,  cemeteries,  religious  and  charitable  associations,  shall  in  addition  to 
the  charter  fee,  tax  on  property  and  income  or  receipt  and  license  tax, 
and  the  registration  fee  prescribed  by  law,  pay  into  the  treasury  of  the  State 
on  or  before  the  1st  day  of  March  of  each  and  every  year,  an  annual  State 
franchise  tax  to  be  assessed  by  the  State  Corporation  Commission,  as  follows: 

Where  the  maximum  capital  stock  is  $25,000  and  under,  $10;  over  $25,000 
and  not  in  excess  of  $50,000,  $20;  over  $50,000,  and  not  in  excess  of  $100,000, 
$•40;  over  $100,000  and  not  in  excess  of  $300,000,  $60;  over  $300,000  and 
not  in  excess  of  $500,000,  $100;  over  $500,000  and  not  in  excess  of  $1,000,000, 
$200;  over  $1,000,000,  an  additional  sum  of  $10  for  each  $100,000  or  fraction 
thereof  in  excess  of  $1,000,000. 

The  State  Corporation  Commission  shall  ascertain  the  amount  of  the  author- 
ized maximum  capital  stock  of  said  corporation,  company,  or  association  as  of 
the  1st  day  of  January  in  each  year,  and  shall  assess  against  such  corporation, 
company,  or  association,  the  State  franchise  tax  herein  imposed,  and  a  certified 
copy  of  such  assessment  when  so  made  shall  be  forwarded  by  the  clerk  of  the 
State  Corporation  Commission  before  the  15th  day  of  February,  to  the  Auditor 
of  Public  Accounts  and  to  the  president  or  other  proper  officer  of  every  such 
corporation,  company,  or  association. 

Any  such  corporation,  company,  or  association  failing  to  pay  the  said  tax 
into  the  State  Treasury  within  the  time  prescribed  shall  incur  a  penalty  thereon 
of  five  per  centum  and  interest  at  the  rate  of  six  per  centum  on  the  total  amount 
of  tax  and  penalty  from  the  date  when  the  same  was  due  until  paid,  which 
shall  be  added  to  the  amount  of  such  tax  (Acts  of  1903,  p.  182  as  amended  by 
Acts  of  1908,  p.  590;  Act  of  Feb.  26,  1910;  Laws  of  1910,  p.  87). 

26.  Annual  Registration  Fee.  —  All  domestic  corporations  other  than 
charitable  and  foreign  corporations  doing  business  within  the  State  shall  pajr 
annually  into  the  treasury  of  the  State  before  March  1  of  each  year  the  follow- 
ing registration  fee :  With  capitalization  of  $15,000  or  under,  $5 ;  over  $15,000 
and  not  exceeding  $50,000,  $10 ;  over  $50,000  and  not  exceeding  $100,000,  $15 ; 
over  $100,000  and  not  exceeding  $300,000,  $20;  over  $300,000,  $25.  This  fee 
is  payable  in  addition  to  the  annual  franchise  tax  or  other  taxes  imposed  upon 
the  corporation.  Failure  to  pay  such  fee  for  two  years  and  ninety  days  operates 
as  revocation  of  the  charter  of  the  corporation  (Act  of  1908,  p.  338;  Acts  of  1909, 
p.  338;   see  also  Cons.,  1902,  sec.  157). 

27.  Foreign  Corporations.  — The  Constitution  of  1902,  sec.  163,  provides 
that  no  foreign  corporation  shall  be  authorized  to  carry  on  in  the  State  any 
kind  of  business  which  domestic  corporations  are  prohibited  from  doing,  or  be 
relieved  from  compliance  with  any  of  the  requirements  of  similar  domestic  cor- 
porations by  the  Constitution  and  laws  of  the  State  where  the  same  can  be  made 
applicable  to  such  foreign  corporations  without  discriminating  against  it.  Every 
incorporated  company  doing  business  in  this  State  shall  have  an  office  in  the 
State,  at  which  all  claims  against  the  company  due  residents  of  the  State  may 
be  audited,  settled,  and  paid.  Every  such  company  incorporated  under  a  juris- 
diction beyond  the  limits  of  the  State  (and  hereinafter  designated  as  a  foreign 
corporation)  shall,  before  doing  business  in  this  State,  present  to  the  State  Cor- 
poration Commission  (a)  a  written  power  of  attorney  executed  in  duplicate,  ap- 
pointing some  person  residing  in  this  State  its  agent  upon  whom  all  legal  process 
against  the  corporation  may  be  served,  and  who  shall  be  authorized  to  enter  an 

581 


DIGEST    OF    INCORPORATION    ACTS. VIRGINIA. 

appearance  in  its  behalf ;  (b)  two  duly  authenticated  copies  of  the  charter  of 
the  corporation ;  and  (c)  a  certificate  of  the  Auditor  of  Public  Accounts,  show- 
ing the  payment  into  the  treasury  of  the  fee  required  by  law  to  be  paid  by  such 
corporation,  and  shall  obtain  from  said  Corporation  Commission  a  license  to 
transact  business  in  the  State.  If  it  shall  be  made  to  appear  to  the  State  Corpo- 
ration Commission  that  said  corporation  has  complied  with  the  law  relative  to  the 
licensing  of  a  foreign  corporation  of  the  character  of  the  applicant  corporation, 
then  said  Corporation  Commission  shall  issue  to  said  corporation  a  license  to 
transact  business  in  the  State.  Certain  mining  and  manufacturing  corporations 
are  given  special  power  with  reference  to  the  acquisition  of  real  estate,  subject  to 
the  limitation  that  they  shall  not  be  allowed  to  acquire  and  hold  save  in  Tazwell, 
Russell,  and  Buchanan  counties  more  than  ten  thousand  acres  of  land  in  any 
one  county  (sec.  1103  b).  Under  the  Constitution  foreign  corporations  may  be 
taxed  the  same  as  domestic  corporations  (Cons.,  1902,  sec.  163).  Under  Laws 
of  1902-3-4,  chap.  148,  sec.  38,  they  pay  the  same  fee  upon  commencing  to 
do  business  as  is  imposed  upon  domestic  corporations  at  the  time  of  organiza- 
tion. In  the  case  of  the  foreign  corporation,  tins  fee  is  based  upon  the  amount 
of  their  property  located  within  the  State.  Foreign  corporations  doing  business 
within  the  State  are  subject  to  payment  of  the  annual  registration  tax,  and  the 
annual  franchise  tax  (Cons.,  1902,  chap.  157;  see  also  Laws  of  1903,  chap.  242). 
Foreign  corporations  are  also  required  to  make  the  same  reports  as  are  required 
in  the  case  of  domestic  corporations  (sees.  1105  e,  39;  Cons.,  1902,  sees.  157, 
163;    sees.  1103b,  1104,  1105,  1105a). 

Slaughter  v.  Commonwealth,  13  Grat.  767;  Nickels  v.  P.  B.  L.  &  S.  Ass'n,  93  Va.  380; 
25  S.  E.  8;  Goldsberry  v.  Carter,  100  Va.  438;  41  S.  E.  858;  American  Surety  Co.  v.  Com- 
monwealth, 102  Va.  841 ;  47  S.  E.  994. 

Every  foreign  corporation  when  it  obtains  from  the  State  Corporation  Com- 
mission a  certificate  of  authority  to  do  business  in  this  State,  shall  pay  an  en- 
trance fee  into  the  treasury  of  Virginia  to  be  ascertained  and  fixed  as  follows: 
For  a  company  whose  maximum  capital  stock  is  $50,000  or  less,  $30;  over 
$50,000  and  not  to  exceed  $1,000,000,  60  cents  for  each  $1,000  or  fraction 
thereof;  over  $1,000,000  and  not  to  exceed  $10,000,000,  $1,000;  over 
$10,000,000,  and  not  to  exceed  $20,000,000,  $1,250;  over  $20,000,000  and  not  to 
exceed  $30,000,000,  $1,500;  over  $30,000,000  and  not  to  exceed  $40,000,000, 
$1,750;  over  $40,000,000  and  not  to  exceed  $50,000,000,  $2,000;  over 
$50,000,000  and  not  to  exceed  $60,000,000,  $2,250;  over  $60,000,000,  and  not 
to  exceed  $70,000,000,  $2,500;  over  $70,000,000  and  not  to  exceed  $80,000,000, 
$2,750;  over  $80,000,000,  and  not  to  exceed  $90,000,000,  $3,000;  over 
$90,000,000,  $5,000;  provided,  however,  that  foreign  corporations  without 
capital  stock  shall  pay  $50  only  for  such  certificate  of  authority  to  do  business 
in  this  State  (Act  of  Feb.  26,  1910). 


582 


DIGEST    OF    INCORPORATION   ACTS.  —  WASHINGTON. 


WASHINGTON. 

(The  references  below  are  to  Ballinger's  Code  and  Statutes  of  Washington  (1897),  unless 
otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  Wasliington  is  to  be  found  in  Ballinger's  Code, 
seci.  4250-4302,  and  acts  amendatory  thereof.  Parties  may  incorporate  there- 
under for  manufacturing,  mining,  milling,  wharfing,  and  docking,  mechanical, 
banking,  mercantile,  improvement,  and  building  purposes,  or  for  the  building, 
equipping,  and  managing  water  flumes  for  the  transportation  of  wood  and 
lumber,  or  for  the  purpose  of  building,  equipping,  and  running  railroads,  or  con- 
structing canals  or  irrigation  canals,  or  engaging  in  any  other  species  of  trade  or 
business.    (See  Laws  of  1903,  chap.  84;   Laws  of  1905,  chap.  11.) 

2.  Incorporators.  — Two  or  more  persons.  There  are  no  residential  re- 
quirements (sec.  4251 ;   Laws  of  1905,  chap.  11). 

Hastings  v.  Company,  29  Wash.  224;  69  Pac.  776. 

3.  Contents  of  the  Articles  of  Incorporation.  —  The  articles  of  incor- 
poration must  set  forth : 

a.  Name.  —  No  name  can  be  used  similar  to  that  of  an  existing  domestic 
corporation  or  of  any  foreign  corporation  that  has  obtained  a  permit  to  do 
business  within  the  State  (sec.  4251 ;  Laws  of  1903,  chap.  84 ;  Laws  of  1905, 
chap.  11). 

b.  Purposes.  —  The  objects  for  which  the  corporation  is  formed  must  be 
stated.  The  law  expressly  authorizes  incorporation  for  one  or  more  purposes 
(Laws  of  1905,  chap.  11). 

c.  Capital  Stock.  —  The  amount  of  capital  stock,  which  may  be  any  amount 
(Laws  of  1905,  chap.  11). 

d.  Duration.  —  The  time  of  existence,  not  to  exceed  fifty  years  (Laws  of 
1905,  chap.  11). 

e.  Number  of  Shares.  —  Number  of  shares  into  which  the  capital  stock  is  to 
be  divided  (Laws  of  1905,  chap.  11). 

/.  Trustees.  —  The  number  of  trustees  and  the  names  of  those  who  shall 
manage  the  concerns  of  the  company  for  such  length  of  time  (not  less  than  two 
nor  more  than  six  months)  as  may  be  designated  in  the  articles  (Laws  of  1905, 
chap.  11). 

g.  Domicile.  —  Name  of  the  locality  and  county  in  which  the  principal  place 
of  business  of  the  company  is  to  be  located  (Laws  of  1905,  chap.  11). 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of  com- 
mon law  powers,  the  statute  confers  the  following  additional  powers:  The  right 
to  vote  by  proxy,  to  remove  trustees,  to  forfeit  stock  for  non-payment  of  assess- 
ment, and  giving  stockholders  in  mining  companies  the  right  to  inspect  property 
(sees.  4253,  4255,  4262;  Laws  of  1901,  chap.  120) ;  to  subscribe  for,  acquire  by 
purchase  or  otherwise,  shares  of  stock  of  other  corporations  (Laws  of  1905,  chap. 
27). 

Parsons  v.  Company,  25  Wash.  492;   65  Pac.  765;  Barto  v.  Nix,  15  Wash.  563;   46  Pac. 
1033;  Pitcher  v.  Company  (Wash.),  81  Pac.  1047. 

5.  Procuring  the  Charter.  —  The  incorporators  must  subscribe  and  ac- 
knowledge before  an  officer  authorized  to  take  acknowledgments  the  articles 

583 


DIGEST   OF   INCORPORATION    ACTS.  —  WASHINGTON. 

of  incorporation  in  triplicate.  One  of  these  must  be  filed  in  the  office  of  the 
Secretary  of  State  and  another  with  the  county  auditor  of  the  county  in  which 
the  principal  place  of  business  of  the  company  is  intended  to  be  located.  A 
third  copy  should  be  retained  by  the  incorporators  (sec.  4251 ;  Laws  of  1905, 
chap.  11). 

6.  Corporate  Indebtedness.  —  There  is  no  Umitation  upon  the  amount 
of  corporate  indebtedness  which  a  corporation  may  incur.  (See,  however, 
sec.  4266.) 

7.  Organization  Tax.  —  Every  corporation  having  a  capital  stock  divided 
into  shares  shall  pay  to  the  Secretary  of  State  upon  filing  its  articles  of  incor- 
poration a  filing  fee  of  $25  (Laws  of  1907,  chap.  140). 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State  for  filing  and 
recording  articles  of  incorporation,  including  issuance  of  certificate  of  incor- 
poration, $25 ;  for  filing  and  recording  amendatory  or  supplemental  articles  of 
incorporation,  including  issuance  of  certificate,  $10;  for  fifing  and  recording 
certificate  of  increase  or  decrease  of  capital  stock,  including  issuance  of  cer- 
tificate, $5 ;  for  recording  any  of  the  foregoing  documents  in  excess  of  twenty 
folios,  and  for  all  such  excess  per  folio,  15  cents ;  for  copy  of  articles  of  incor- 
poration duly  certified  under  the  seal  of  the  State,  $5 ;  for  filing  and  recording 
in  local  county  office  the  fee  generally  averages  about  $3  (sees.  4285,  4287,  4288). 
The  act  provides  that  there  shall  be  no  charge  for  recording  certificate  of  incor- 
poration or  making  certified  copy  of  the  same  other  than  those  already  men- 
tioned, unless  the  same  shall  exceed  twenty  folios,  in  which  case  there  shall  be  a 
further  charge  of  15  cents  per  folio  for  all  such  excess  (Laws  of  1907,  chap.  140). 
For  filing  certificate  of  appointment  of  agent  by  a  foreign  corporation,  $5 ;  for 
certifying  to  the  printed  compilation  of  the  corporation  laws  of  the  State,  $5 
(Laws  of  1907,  chap.  140). 

9.  Commencing  Business.  —  Before  commencing  business  and  within 
thirty  days  after  it  shall  have  filed  its  certificate  of  incorporation  with  the 
county  auditor  of  the  county  in  which  it  has  its  principal  place  of  business,  the 
corporation  must  file  with  the  latter  a  statement  sworn  to  by  its  president  and 
attested  by  its  secretary  and  sealed  with  its  corporate  seal,  containing  a  list  of  all 
its  officers  and  names  and  addresses  and  terms  of  office  for  which  they  have  been 
chosen  (sees.  4259,  4260).  Except  in  the  case  of  mining  corporations,  all  the 
capital  stock  must  be  subscribed  before  business  can  be  commenced  (sec.  4266). 

City  of  Spokane  v.  Trustees,  22  Wash.  172;  60  Pac.  141. 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  thirty  days  after  the  certificate  of  incorporation  is  filed  with  the  county 
auditor  as  required  by  law.  The  meeting  must  be  held  within  the  State,  and 
statutory  provision  is  made  for  calling  the  same  (sees.  4255,  4258,  4260.  The 
first  meeting  of  the  trustees  shall  be  called  by  a  notice,  signed  by  one  or  more 
persons  named  as  trustees  in  the  certificate,  setting  forth  the  time  and  place 
of  meeting,  which  notice  shall  be  delivered  personally  to  each  trustee  or  pub- 
lished at  least  twenty  days  in  some  newspaper  in  the  county  wherein  the  cor- 
poration's principal  place  of  business  is  located  (sec.  4258). 

11.  Meetings  of  Stockholders  and  Trustees.  —  Meetings  of  stockholders 
must  be  held  at  the  principal  office  within  the  State.  Meetings  of  the  board  of 
trustees  or  directors  may  be  held  at  such  place  or  places  within  or  without  the 
State  as  may  be  designated  in  the  articles  of  incorporation  or  the  by-laws.  In 
case  the  meetings  of  the  board  of  trustees  or  directors  of  a  corporation  shall  be 

584 


DIGEST    OF   INCORPORATION    ACTS.  —  WASHINGTON. 

held  outside  of  the  State,  either  the  original  or  full  and  complete  copies  or 
duplicates  of  all  proceedings  had  at  said  meeting  or  meetings,  certified  by  the 
secretary  under  the  corporate  seal,  shall  be  sent  to  and  kept  at  the  principal 
office  or  place  of  business  of  the  corporation  in  this  State,  and  shall  be  part  of 
the  records  of  the  corporation  in  this  State  (Laws  of  1907,  chap.  607). 

12.  Trustees'  Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  at  least  two  trustees  who  must  be  stockholders  and  one  of  whom  shall 
be  a  resident  of  the  State  of  Washington,  and  a  majority  of  them  citizens  of 
the  United  States,  and  must  take  and  subscribe  to  an  oath  of  office  (sec.  4255). 

O.  &  B.  F.  C.  M.  &  M.  Co.  v.  Conlan  (Wash.),  75  Pac.  798. 

b.  Liabilities.  —  All  trustees  not  formally  dissenting  to  the  declaration  of 
illegal  dividends  or  to  the  unlawful  withdrawal  of  any  part  of  the  capital  stock 
are  jointly  and  severally  liable  to  the  corporation  and  to  the  creditors  to  the 
full  amount  so  divided  or  reduced  or  paid  out  (sec.  4265;  see  also  Laws  of 
1903,  chap.  93;  Laws  of  1909,  chap.  249).  They  are  also  liable  for  making 
fraudulent  reports,  prospects,  etc.  (Laws  of  1903,  p.  141 ;  Laws  of  1909,  chap. 
249). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  only  liable  to  the  ex- 
tent of  their  unpaid  stock  subscriptions  (sec.  4262;  Cons.,  Art.  XII.  sec.  4). 

14.  Stock  Certificates.  —  Stock  certificates  must  be  signed  by  such 
officers  as  the  by-laws  prescribe. 

15.  Preferred  Stock.  —  The  act  does  not  expressly  authorize  the  issuance 
of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Stock  must  be  paid  for  in  money  or 
money's  worth.  Special  provision  is,  however,  made  in  the  case  of  mining 
corporations.  Where  the  amount  of  capital  stock  of  such  corporations  con- 
sists of  the  aggregate  valuation  of  the  whole  number  of  feet,  shares,  or  interest 
in  any  mining  claim  within  the  State,  no  material  subscription  to  the  capital 
stock  is  necessary,  but  each  owner  thereof  shall  be  deemed  to  have  subscribed 
such  an  amount  to  the  capital  stock  of  the  corporation  as  in  its  by-laws  shall 
represent  the  value  of  so  much  of  his  interest  in  said  mining  claims  or  legal 
title  to  which  he  may  by  deed  or  other  instrument  vest  in  the  corporation  for 
mining  purposes  (sec.  4280;  Cons.,  Art.  XII.  sec.  6). 

Dunlap  v.  Rauch,  24  Wash.  620;  64  Pac.  807;   Krisch  v.  Company  (Wash.),  81  Pac.  855. 

17.  Books.  —  Stock  transfer  books  must  be  kept  at  all  times  at  the  prin- 
cipal office  of  the  corporation  in  the  State  (sec.  4269).  These  are  open  to  the 
inspection  of  stockholders. 

State  v.  Company,  21  Wash.  451;  58  Pac.  584. 

18.  Office  and  Agent.  —  Every  corporation  must  maintain  an  office  within 
the  State  and  an  agent  thereat  to  receive  service  of  process  (sec.  4251). 

19.  Reports.  —  Before  the  second  Tuesday  in  January  all  corporations  both 
domestic  and  foreign  must  file  with  the  auditor  of  the  county  where  business  is 
located  a  statement  showing  names  and  addresses  and  titles  of  company's 
officers  and  terms  of  office,  and  also,  within  thirty  days  of  date  of  incorporating, 
must  file  a  similar  report.  No  penalty,  however,  is  provided  for  failure  to  com- 
ply therewith,  and  the  provision  is  generally  disregarded  (sees.  4259,  4260; 
see  also  Laws  of  1905,  chap.  115). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  in  force  in  this 
State.  The  Constitution,  however,  prohibits  combinations  to  fix  the  price  or 
limit  the  production  of  commodities  (Cons.,  Art.  XII.  sec.  22). 

585 


DIGEST    OF   INCORPORATION    ACTS.  —  WASHINGTON. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  provisions  of 
law  as  to  the  bringing  of  information  in  the  nature  of  quo  warranto  against 
corporations  will  be  found  in  Ballinger's  Codes  and  Statutes  (sees.  5189,  5190). 
The  Secretary  of  State  is  authorized  to  strike  from  the  records  of  his  office  the 
names  of  all  corporations  which  have  neglected  for  a  period  of  two  years  to  pay 
their  annual  license  fee.  If  the  corporation  does  not  apply  within  six  months 
after  its  name  has  been  so  stricken  from  the  record  in  the  office  of  the  Secretary 
of  State  for  reinstatement,  then  the  corporation  shall  thereupon  be  dissolved,  and 
the  trustees  of  such  corporation  shall  hold  title  to  the  property  of  the  corporation 
for  the  benefit  of  its  stockholders  and  creditors,  to  be  disposed  of  under  proper 
court  proceedings  (Laws  of  1909,  chap.  19).  The  name  of  any  corporation  which 
is  stricken  from  the  records  of  the  office  of  the  Secretary  of  State  for  non-pay- 
ment of  its  annual  license  tax  may  be  adopted  by  another  corporation  at  the 
termination  of  the  period  of  six  months  next  ensuing  from  the  date  when  such 
name  has  been  so  stricken  from  said  records  (Laws  of  1909,  chap.  19;  see 
also  sec.  5789,  Laws  of  1909,  p.  928). 

22.  Annual  Franchise  Tax.  —  On  or  before  July  1st  of  each  year  every 
corporation  must  pay  an  annual  license  tax  of  $15.  For  failure  to  pay  the 
annual  license  fee  on  or  before  the  1st  day  of  July  and  prior  to  the  1st  day  of 
January  next  following,  a  fine  of  $2.50  is  imposed  (Laws  of  1907,  chap.  140). 

Any  corporation  neglecting  for  a  period  of  two  years  to  pay  its  annual 
license  fee  shall  have  its  name  stricken  from  the  records  in  the  office  of  the  Sec- 
retary of  State.  Any  corporation  may  apply  within  six  months  after  its  name 
has  been  stricken  from  the  records  of  the  office  of  the  Secretary  of  State  for 
reinstatement  by  it  and  payment  of  license  fees  and  penalties  then  due  from 
it  and  the  sum  of  $25  for  additional  penalty  (Laws  of  1909,  chap.  19). 

23.  Amendments.  —  Amendments  for  any  purpose  may  be  made  by  a 
majority  vote  of  the  trustees  and  the  vote  or  written  assent  of  two-thirds  of 
the  capital  stock  of  the  corporation.  If  the  written  assent  of  two-thirds  of  the 
capital  stock  has  not  been  obtained,  the  vote  of  said  stock  may  then  be  taken 
at  any  regular  meeting  called  for  that  purpose  in  the  manner  provided  in  the 
by-laws  for  special  meetings  of  stockholders.  The  president  and  secretary  of 
the  said  corporation  shall  certify  such  amendments  in  triplicate  under  the  seal 
of  said  corporation  to  be  correct,  and  file  a  copy  of  the  same  as  in  the  case 
of  the  original  articles.  The  time  of  existence  of  such  corporation  shall  not  be 
extended  by  amendment  beyond  the  time  fixed  in  the  original  articles  of  incor- 
poration (Laws  of  1905,  chap.  11). 

Whenever  a  corporation  shall  execute  and  file  in  the  office  of  the  Secretary 
of  State  and  in  the  office  of  the  county  auditor  of  the  proper  county  supple- 
mental articles  of  incorporation  changing  its  corporate  name,  such  corporation 
shall  file  in  the  office  of  such  county  auditor  at  the  time  of  filing  such  sup- 
plemental articles,  or  within  ten  days  thereafter,  a  written  notice  signed  by 
the  president,  vice-president,  or  secretary,  setting  forth  its  original  corporate 
name,  its  corporate  name  as  changed,  and  stating  that  supplemental  articles 
making  such  change  of  name  have  been  filed  in  the  office  of  the  Secretary  of 
State  and  in  the  office  of  the  county  auditor  of  the  county  (Laws  of  1905,  chap. 
109). 

Whenever  it  is  desired  to  increase  or  diminish  the  amount  of  capital  stock, 
a  meeting  of  the  stockholders  shall  be  called  by  a  notice  signed  by  at  least  a 
majority  of  the  trustees,  and  published  at  least  eight  weeks  in  some  news- 
paper published  in  the  county  where  the  principal  place  of  business  of  the 

586 


DIGEST    OF    INCORPORATION    ACTS.  —  WASHINGTON. 

company  is  located,  or  if  no  newspaper  is  published  in  the  county,  then  the 
nearest  thereto  in  that  State,  which  notice  shall  specify  the  object  of  the  meet- 
in"-,  the  time  and  place  where  it  is  to  be  held,  and  the  amount  to  which  it  is 
proposed  to  increase  or  diminish  the  capital,  and  a  vote  of  two-thirds  of  all  the 
shares  of  the  stock  shall  be  necessary  to  increase  or  diminish  the  amount  of  the 
capital  stock  (sec.  4272). 

If  at  a  meeting  so  called  a  sufficient  number  of  votes  have  been  given  in 
favor  of  increasing  or  diminishing  the  amount  of  capital,  a  certificate  of  the 
proceedings  showing  compliance  with  these  provisions,  the  amount  of  capital 
actually  paid  in,  the  whole  amount  of  debts  and  liabilities  of  the  company  and 
the  amount  to  which  the  capital  is  to  be  increased  or  diminished,  shall  be  made 
out,  and  signed  and  verified  by  the  affidavit  of  the  chairman  and  secretary  of 
the  meeting,  certified  by  a  majority  of  the  trustees,  and  filed  in  the  same  man- 
ner as  is  required  in  the  case  of  original  articles,  and  when  so  filed  the  capital 
stock  of  the  corporation  shall  be  increased  or  diminished  to  the  amount  specified 
in  the  certificate  (sec.  4273). 

Any  corporation  desiring  at  any  time  to  remove  its  principal  place  of  busi- 
ness into  some  other  county  in  the  State  shall  ule  in  the  office  of  the  county 
auditor  a  certified-  copy  of  its  certificate  of  incorporation.  If  it  is  desired  to 
remove  its  principrv  place  of  business  to  some  other  city,  town,  or  locality 
within  the  same  county,  publication  shall  be  made  of  such  removal  at  least 
once  in  each  week  for  four  weeks  in  the  newspaper  published  nearest  to  the 
city,  town,  or  locality  from  which  the  principal  place  of  business  of  such  cor- 
poration is  desired  to  be  removed.  The  formation  or  corporate  acts  of  any 
corporation  hereafter  formed  under  this  chapter  shall  not  be  rendered  invalid 
by  reason  of  the  fact  that  its  principal  place  of  business  may  not  have  been 
designated  in  the  certificate  of  incorporation:  Provided  that  within  three 
months  from  the  passage  of  this  chapter  such  corporation  shall  cause  publica- 
tion to  be  made  once  a  week  for  at  least  four  weeks  in  a  newspaper  published 
nearest  the  city,  town,  or  locality,  and  where  the  principal  place  of  business  of 
such  corporation  has  been  located,  designating  the  city,  town,  or  locality  and 
county  where  its  principal  place  of  business  shall  be  located.  On  compliance 
with  the  provisions  of  the  section  in  the  several  cases  herein  mentioned,  the 
principal  place  of  business  of  any  corporation  shall  be  deemed  established  or 
removed  at  or  to  any  designated  city,  town,  or  locality  and  county  in  the  State 
(sec.  4276). 

24.  Extension  of  Corporate  Existence.  —  No  provision  is  made  for  the 
extension  of  corporate  existence. 

25.  Dissolution.  —  Corporations  may  be  dissolved  on  vote  of  two-thirds 
of  all  stockholders  upon  application  to  the  courts,  or  by  three-fourths  vote  of 
all  its  members  it  may  surrender  its  corporate  powers  (sec.  4275). 

26.  Foreign  Corporations.  —  Every  foreign  corporation  must  cause  to 
be  filed  and  recorded  in  the  office  of  the  Secretary  of  State  a  copy  of  its  charter, 
articles  of  incorporation,  memorandum  of  association,  or  certificate  of  incor- 
poration, certified  to  by  the  officer  who  is  the  custodian  of  the  same,  according 
to  the  laws  of  the  State  or  Territory,  country  or  colony,  where  such  corporation 
is  incorporated,  or  who  is  authorized  to  issue  certificates  of  incorporation  ac- 
cording to  laws  of  such  State  or  Territory  or  foreign  country  or  colony.  The 
instruments  herein  required  to  be  filed  and  recorded  shall  be  attested  by  such 
certifying  officer  under  his  hand  and  seal  of  office,  which  attestation  shall  be 
■prima  facie  evidence  of  the  facts  therein  stated,  and  the  genuineness  of  the 

587 


DIGEST    OF   INCORPORATION   ACTS. — WASHINGTON. 

certificate.  If  such  officer  has  no  official  seal,  his  certificate  shall  state  that  fact 
over  his  signature,  and  thereupon  the  Secretary  of  State  or  of  the  Territory,  in 
case  of  corporations  within  the  United  States,  and  the  consul-general,  consul, 
vice-consul,  deputy  consul,  consular  agent,  or  commercial  agent  of  the  United 
States,  at  or  nearest  to  the  place  where  such  certificate  is  made,  in  the  case  of 
corporations  not  within  the  United  States  shall  certify  under  his  hand  and  seal 
of  office  to  the  genuineness  of  the  signature  of  the  officer  making  the  certificate, 
and  to  the  fact  that  at  the  time  of  making  such  certificate  the  person  making 
the  same  held  the  office  described  in  the  certificate  (sec.  4292). 

Such  corporations  shall  also  constitute  and  appoint  an  agent,  who  shall 
reside  at  the  place  in  the  State  where  the  principal  business  of  the  corporation 
is  to  be  carried  on,  to  be  designated  as  hereinafter  required.  Such  appointment 
shall  be  in  writing,  signed  by  the  president  or  chief  officer  of  such  corporation, 
and  shall  be  attested  by  its  corporate  seal,  and  shall  contain  the  name  of  the 
agent,  his  place  of  residence,  and  the  place  where  the  principal  business  of  such 
corporation  is  to  be  carried  on,  and  shall  authorize  such  agent  to  accept  service 
of  process  in  any  action  or  suit  pertaining  to  the  property,  business,  or  transac- 
tions of  such  corporation  within  this  State,  in  which  such  corporation  may  be 
a  party.  The  signature  of  such  president  or  chief  officer,  attested  by  the  cor- 
porate seal  to  such  written  appointment,  shall  be  sufficient  proof  of  the  appoint- 
ment of  such  agent.  Such  appointment  when  duly  executed  shall  be  filed  for 
record  in  the  office  of  the  Secretary  of  State  by  such  corporation,  and  shall  be 
there  recorded,  and  such  corporation  shall  have  and  keep  continually  some 
resident  agent,  empowered  as  aforesaid,  during  all  the  time  such  corporation 
shall  conduct  or  carry  on  any  business  within  this  State,  and  service  of  any 
process,  pleading  notice,  or  other  paper  shall  be  taken  and  held  as  due  service  on 
such  corporation.  Such  corporation  may  change  its  agent  or  its  principal  place 
of  business  from  time  to  time  by  fifing  and  recording  with  the  Secretary  of  State 
a  new  appointment  stating  the  change  of  such  agent  or  the  change  in  the  prin- 
cipal place  of  business,  and  in  the  event  such  foreign  corporation  shall  withdraw 
from  this  State  and  cease  to  transact  business  therein  it  shall  continue  to  keep 
and  maintain  such  agent  within  this  State  upon  whom  service  of  process,  plead- 
ings and  papers  may  be  made,  until  the  statute  of  limitations  shall  have  run 
against  anyone  bringing  an  action  against  said  corporation,  which  accrued 
prior  to  its  withdrawal  from  this  State.  In  case  said  corporation  shall  revoke 
the  authority  of  its  designated  agent  after  its  withdrawal  from  this  State  and 
prior  to  the  time  when  the  statute  of  limitation  would  run  against  causes  of 
action  accruing  against  it,  then  in  that  event  service  of  process,  pleadings,  and 
papers  in  such  actions  may  be  made  upon  the  Secretary  of  State,  of  the  State 
of  Washington,  and  the  same  shall  be  held  as  due  and  sufficient  service  upon 
such  corporation  (sec.  4293;  Laws  of  1890,  sec.  3,  p.  290,  as  amended  by  Laws 
of  1909,  p.  72). 

Every  foreign  corporation  filing  in  the  office  of  the  Secretary  of  State  a  cer- 
tificate of  the  appointment  of  an  agent  residing  in  this  State,  or  a  certificate 
of  the  revocation  of  such  appointment  of  the  resident  agent,  shall  pay  to  the 
Secretary  of  State  a  fee  of  five  dollars  (Laws  of  1907,  p.  270). 

Foreign  corporations  must  pay  the  same  license  tax  and  the  same  annual 
license  tax  as  is  required  of  domestic  corporations  (Const.,  Art.  XII.  sec.  7; 
Laws  of  1907,  p.  271).  They  must  also  file  annual  reports  (sec.  4259;  Laws  of 
1905,  p.  355). 

588 


DIGEST    OF   INCORPORATION   ACTS.  —  WEST   VIRGINIA. 


WEST   VIRGINIA. 

(The  references  below  are  to  the  Code  of  West  Virginia,  1899,  chaps.  52-54.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  is  to  be  found  in  the  Code  of  West  Virginia 
(Laws  of  1899,  as  amended  in  1901,  chap.  52,  sees.  1-24;  chap.  53,  sees.  1-G3 ; 
chap.  54,  sees.  1-83).  For  convenience  in  classification  for  prescribing  and 
assessing  license  tax  on  charters  or  certificates  of  incorporation,  corporations 
are  divided  into  two  classes,  domestic  and  foreign.  A  domestic  corporation  is 
(a)  one  incorporated  by  or  under  the  laws  of  this  State,  or  (b)  under  the  laws 
of  the  State  of  Virginia  before  June  20,  1863,  and  which  has  its  principal  plac<> 
of  business  and  cliief  works  (if  it  have  chief  works)  in  this  State.  Every  other 
corporation  is  a  foreign  corporation.  Domestic  corporations  are  subdivided 
into  two  classes,  resident  and  non-resident.  A  resident  corporation  is  a  domestic 
corporation  whose  principal  place  of  business  or  chief  works  (if  it  have  chief 
works)  are  located  within  this  State,  and  a  non-resident  corporation  is  a  do- 
mestic corporation  whose  principal  place  of  business  or  cliief  works  are  located 
without  this  State.  The  words  "cliief  works"  as  used  in  the  act  include 
shops,  factories,  mines,  manufacturing  plants,  or  any  building  or  other  place 
where  mechanics,  artisans,  or  laborers  are  employed.  No  corporation  can  be 
incorporated  for  the  sole  purpose  of  purchasing  real  estate  in  order  to  sell  the 
same  for  profit  (Code  52 :  3,  as  amended  by  Laws  of  1901,  chap.  35,  and  Laws 
of  1903,  chap.  3). 

2.  Incorporators.  —  Five  or  more  persons.  There  are  no  residential 
requirements  (Code  54  :  6). 

Crumlish  Admr.  v.  Ry.  Co.,  40  W.  Va.  627;  22  S.  E.  90;  Greenbrier  Ind.  Exposition 
v.  Rodes,  37  W.  Va.  738;  17  S.  E.  305. 

3.  Contents  of  the  Agreement  of  Incorporation.  —  The  agreement  of 
incorporation  must  contain : 

a.  Name.  —  Similarity  of  corporate  names  forbidden  (Code  54 :  6,  sub.  1 ; 
see  also  Code  53 :  11 ;   Laws  of  1903,  chap.  3,  sec.  3). 

b.  Domicile.  —  Location  of  its  principal  place  of  business  and  its  chief 
works  (Code  54 :  6,  sub.  2).  The  principal  office  need  not  be  within  the  State. 
(See  Code  53  :  46.) 

c.  Purposes.  —  Objects  for  which  the  corporation  is  formed.  Any  number 
of  purposes  may  be  inserted  (Code  54 :  6,  sub.  3). 

d.  Capital  Stock.  —  Amount  of  total  authorized  capital  stock,  number  of 
shares  and  par  value  thereof,  and  the  amount  of  the  same  paid  in.  If  pre- 
ferred stock  is  desired,  the  terms  on  which  the  same  is  issued  must  be  set  forth 
(Code  54 :  6,  sub.  4 ;  see  also  Code  53  :  17,  as  amended  by  Laws  of  1901,  chap. 
35).    Capitalization  and  par  value  of  shares  may  be  any  amount  (Code  53 :  15). 

e.  Stock  Subscriptions  by  Incorporators.  —  Names  and  post-office  addresses 
of  the  incorporators  and  the  number  of  shares  subscribed  for  by  each  (Code 
54  :  6,  sub.  5).  There  must  be  at  least  five  bona  fide  stockholders  who  are  re- 
quired to  pay  in  ten  per  cent  of  their  subscriptions  forthwith  (Code  53  :  17,  25). 

/.  Duration.  —  Period  of  corporate  existence  not  to  exceed  fifty  years  (Code 
54 :  6,  sub.  6  ,    see  also  Code  54 :  11,  as  amended  by  Laws  of  1901,  chap.  35). 

589 


DIGEST    OF   INCORPORATION   ACTS. — WEST   VIRGINIA. 

g.  Provisions  for  Regulation  of  Corporate  Affairs.  —  Any  provisions  desired 
may  be  inserted  for  the  regulation  of  the  business  and  for  the  conduct  of  the 
affairs  of  the  corporation,  or  denning,  limiting,  or  regulating  the  powers  of 
the  corporation,  the  stockholders,  and  directors  (Code  54 :  6,  sub.  7). 

h.  If  the  corporation  desires  to  hold  more  than  ten  thousand  acres  of  land 
in  West  Virginia,  the  agreement  must  set  forth  the  maximum  number  of  acres 
it  desires  to  hold  (Code  54 :  6).  Every  corporation,  including  railroad  and  all 
other  corporations  holding  more  than  ten  thousand  acres  of  land  in  this  State, 
shall  pay  a  tax  of  five  cents  per  acre  for  each  acre  in  excess  of  ten  thousand 
acres.  Corporations  heretofore  incorporated  and  foreign  corporations  hereto- 
fore authorized  to  hold  property  and  transact  business  in  this  State,  which  are 
liable  to  pay  such  tax  and  have  not  paid  the  same,  shall  pay  the  same  to  the 
Secretary  of  State  before  August  1,  1905.  Such  corporations  shall,  under  the 
hand  of  the  president  and  seal  of  the  corporation,  and  attested  by  the  secretary, 
apply  to  the  Secretary  of  State  for  a  certificate  authorizing  the  holding  of  the 
number  of  acres  stated  in  such  application,  and  pay  the  tax  thereon,  and  it 
shall  be  the  duty  of  the  Secretary  of  State  to  issue  to  such  corporation  a  cer- 
tificate stating  the  amount  of  tax  paid  and  number  of  acres  on  which  paid, 
and  the  number  of  acres  the  corporation  is  thereby  entitled  to  hold.  Here- 
after a  domestic  corporation  shall  state  in  its  agreement  for  incorporation, 
and  a  foreign  corporation  shall  state  in  its  application  for  authority  to  hold 
property  and  transact  business  in  this  State,  the  number  of  acres  it  desires  to 
hold  and  pay  the  tax  thereon  to  the  Secretary  of  State  before  the  certificate 
of  incorporation  or  of  authority  is  issued.  If  any  corporation  desires  to  in- 
crease the  number  of  acres  it  may  hold,  it  shall  make  application  therefor  to 
the  Secretary  of  State.  Such  application  shall  be  signed  by  the  president  of 
the  corporation,  sealed  with  its  corporate  seal  and  attested  by  the  secretary, 
and  it  shall  state  the  number  of  acres  it  then  holds  and  the  number  of  acres  it 
desires  to  hold.  The  Secretary  of  State  shall  collect  the  proper  amount  of  tax, 
and  shall  issue  to  the  corporation  a  certificate,  reciting  the  number  of  acres 
the  corporation  may  hold  and  the  amount  of  tax  paid  to  him.  If  any  corpora- 
tion shall  fail  to  comply  with  the  provisions  of  this  section,  it  shall  be  liable  to 
a  fine  of  not  less  than  $25  and  not  exceeding  $500,  and  be  liable  to  pay  such 
tax  due  to  the  State  with  a  penalty  of  ten  per  cent  on  the  total  amount 
due,  and  be  liable  to  all  the  provisions  of  sees.  136  and  137  so  far  as  they 
are  applicable.  All  moneys  received  by  the  Secretary  of  State  under  the 
provisions  of  this  section  he  shall  report  to  the  auditor  and  pay  into  the 
State  treasury  in  the  manner  prescribed  for  the  payment  of  other  moneys 
received  by  him. 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  the 
common  law  powers  of  corporations  (Code,  chap.  52,  sec.  1),  the  following 
additional  powers  are  granted :  To  subscribe,  with  the  consent  of  the  stock- 
holders, for  the  stock  of  other  corporations;  to  vote  by  proxy;  to  transact 
business  in  other  States  and  countries ;  to  hold  its  organization,  stockholders', 
and  directors'  meetings  outside  of  the  State ;  to  purchase  its  own  stock ;  to 
transfer  all  its  assets;  to  issue  its  stock  for  property  or  services;  may  have 
an  office,  own  property,  and  carry  out  the  corporate  purposes  without  the 
State ;  cumulative  voting  in  the  election  of  directors  is  mandatory ;  to  appoint 
an  executive  committee  from  the  board  of  directors ;  to  forfeit  stock  for  non- 
payment of  assessments ;  to  remove  directors,  and  to  issue  preferred  stock  and 
bonds  (Code  52 :  1 ;   52 :  3 ;  53 :  3 ;  53  :  18 ;   54 :  6 ;  54 :  23 ;   54 :  83,  as  amended 

590 


DIGEST    OF    INCORPORATION    ACTS.  —  WEST    VIRGINIA. 

by  Laws  of  1901,  chap.  35 ;  53 :  16 ;  53 :  24 ;  53 :  42 ;  53 :  44 ;  53 :  53 ;  54  :  82  c, 

sub.  11). 

Cross  v.  Ry.  Co.,  35  W.  Va.  174;  12  S.  E.  1071;  Rece  v.  Company,  32  W.  Va.  164; 
9  S.  E.  212;  P.  L.  R.  Co.  v.  Board  of  Education,  20  W.  Va.  360;  Smith  v.  Cornelius,  41  W. 
Va.  59;  23  S.  E.  599. 

5.  Procuring  the  Charter.  —  The  agreement  of  incorporation  must  be 
signed  and  acknowledged  by  each  of  the  five  incorporators.  Eacli  incorpora- 
tor must  be  a  subscriber  for  at  least  one  share  of  stock.  Two  of  the  incorpora- 
tors must  give  their  affidavit  that  the  amount  stated  therein  to  have  been  paid 
on  the  capital  stock  has  been  in  good  faith  paid  in  for  the  purposes  of  the  busi- 
ness of  the  intended  corporation  and  with  no  intention  or  understanding  that 
the  same  shall  be  withdrawn.  'When  application  is  made  to  the  Secretary  of 
State  for  a  certificate  of  incorporation  for  a  resident  corporation,  two  of  the 
incorporators  must  make  affidavit  to  the  following  effect  that  the  statement 
made  in  such  certificate,  to  wit,  "That  said  corporation  shall  keep  its  principal 
place  of  business  at  in  the  county  of  and  State  of  West  Vir- 
ginia, "  is  true,  and  that  said  principal  place  of  business  and  chief  works  have 
been  so  located  in  good  faith,  and  not  for  the  purpose  of  evading  any  law  of  the 
State  of  West  Virginia,  etc.  Within  three  months  after  filing  the  agreement 
of  incorporation  in  the  office  of  the  Secretary  of  State,  a  certified  copy  thereof 
must  be  recorded  in  the  office  of  the  clerk  of  the  county  in  which  the  principal 
office  is  located,  if  within  West  Virginia ;  or  if  the  principal  office  is  located 
out  of  the  State,  then  such  certified  copy  must  be  filed  in  the  office  of  the  clerk 
of  the  county  in  which  the  statutory  attorney  resides  (chap.  54,  sec.  20 ;  Laws 
of  1901,  chap.  35;   Laws  of  1905,  chap.  36,  sec.  127). 

Greenbrier  Ind.  Exposition  v.  Rodes,  37  W.  Va.  738;  17  S.  E.  305;  Singer  Mfg.  Co.  v. 
Bennett,  28  W.  Va.  16. 

6.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon  the 
amount  of  indebtedness  which  the  corporation  may  incur. 

7.  Organization  Tax.  —  The  organization  tax  is  in  fact  the  first  year's 
annual  tax.  The  statute  distinguishes  between  resident  corporations  and  non- 
resident corporations  in  the  matter  of  organization  taxes.  Resident  corpora- 
tions are  those  whose  principal  place  of  business  and  chief  works  are  located 
outside  of  West  Virginia.  For  both  classes  of  corporations  the  license  year 
begins  July  1st.  On  every  certificate  issued  after  September  30th  of  any  year 
the  State  collects  only  one-tenth  of  the  amount  of  the  annual  tax  for  each  month 
or  fractional  part  of  a  month  to  ensue  before  the  first  day  of  the  next  license 
tax  year,  which  commences  on  July  1st  of  each  year.  But  in  no  case  shall  the 
amount  assessed  and  collected  be  less  than  $5  for  a  resident  corporation,  nor 
less  than  $10  for  a  non-resident  corporation.  If  the  certificate  of  incorporation 
be  issued  on  or  after  the  1st  day  of  May  in  any  one  year,  and  before  the  1st  day 
of  July  of  any  year,  the  Secretary  of  State  shall  assess  and  collect  the  tax  for 
the  full  year  beginning  on  said  July  1st  in  addition  to  the  annual  tax  for  the 
current  year  (Acts  of  1907,  Extra  Session,  chap.  16). 

For  resident  corporations  the  annual  license  tax  is  as  follows:  $5,000  or 
less,  $10;  more  than  $5,000  and  not  more  than  $10,000,  $15;  more  than  si 0,000 
and  not  more  than  $25,000,  $20  ;  more  than  $25,000  and  not  more  than  $50,000, 
$25;  more  than  $50,000  and  not  more  than  $75,000,  $45;  more  than  $75,000 
and  not  more  than  $100,000,  $50;  more  than  $100,000  and  not  more  than 
$125,000,  $55;  more  than  $125,000  and  not  more  than  $150,000,  $60;  more 
than  $150,000  and  not  more  than  $175,000,  $70;   more  than  $175,000  and  not 

501 


DIGEST    OF    INCORPORATION    ACTS.  —  WEST    VIRGINIA. 

more  than  $200,000,  $75;  more  than  $200,000  and  not  more  than  $300,000, 
$90 ;  more  than  $300,000  and  not  more  than  $400,000,  $105 ;  more  than  $400,000 
and  not  more  than  $500,000,  $120;  more  than  $500,000  and  not  more  than 
$1,000,000,  $170;  $1,000,000,  $170,  and  $60  on  each  $1,000,000  or  fraction 
thereof  in  excess  of  $1,000,000  (Laws  of  1909,  chap.  68,  sec.  126). 

For  non-resident  corporations  the  annual  license  tax  is  as  follows:  $10,000 
or  less,  $15;  more  than  $10,000  and  not  more  than  $25,000,  $20;  more  than 
$25,000  and  not  more  than  $50,000,  $30 ;  if  more  than  $50,000  and  not  more 
than  $75,000,  $40;  if  more  than  $75,000  and  not  more  than  $100,000,  $50; 
if  more  than  $100,000  and  not  more  than  $1,000,000,  $50,  and  an  additional 
25  cents  on  each  $1,000  or  fraction  thereof  in  excess  of  $100,000;  if  more 
than  $1,000,000  and  not  more  than  $2,000,000,  $275,  and  an  additional  20 
cents  on  each  and  every  $1,000  or  fraction  thereof  in  excess  of  $1,000,000; 
if  more  than  $2,000,000  and  not  more  than  $4,000,000,  $475,  and  an  additional 
10  cents  on  each  and  every  $1,000  or  fraction  thereof  in  excess  of  $2,000,000; 
if  more  than  $4,000,000,  $675,  and  an  additional  $50  on  each  and  every 
$1,000,000  or  fraction  thereof  in  excess  of  $4,000,000  (Laws  of  1905,  chap.  36, 
sec.  128).  Non-resident  domestic  corporations  must,  at  the  time  of  taking 
out  their  charter,  pay  to  the  State  Auditor,  as  their  attorney  in  fact,  upon 
whom  service  of  process  may  be  made  (see  post,  sec.  9),  $10  for  his  services  as 
such  for  the  then  current  year  ending  on  the  30th  day  of  April  next  ensuing ; 
and  on  or  before  the  1st  day  of  May  of  each  year  thereafter  such  corporation 
shall  pay  to  the  State  Auditor  the  like  sum  of  $10  for  his  services  as  such  attor- 
ney (Laws  of  1907,  Special  Session,  chap.  9). 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State  for  certificate 
of  incorporation  or  copy  thereof,  $10 ;  for  each  certified  copy  of  certificate  of 
incorporation,  $10;  for  each  certificate  of  change  of  name,  or  increase  or  de- 
crease of  authorized  capital  stock,  or  change  of  principal  office,  or  amendment 
to  certificate  of  incorporation,  $5 ;  for  recording  power  of  attorney,  $3 ;  for 
endorsing  and  filing  reports  of  corporations,  $1  each  (Laws  of  1904,  chap.  13). 
Filing  and  recording  fees  in  local  county  office  average  about  $2.50. 

9.  Commencing  Business.  —  The  corporation  must  hold  its  organization 
meeting  within  six  months  after  the  issuance  of  the  certificate  of  incorporation. 
Every  domestic  corporation  shall  within  thirty  days  after  its  first  election  of 
officers,  by  power  of  attorney  duly  executed,  appoint  some  person  residing  in 
the  county  in  this  State  wherein  its  business  is  conducted  to  accept  service  on 
behalf  of  said  corporation  and  upon  whom  service  may  be  had  of  any  process 
or  notice ;  such  power  of  attorney  to  be  recorded  in  the  office  of  the  county 
clerk  of  the  county  in  which  the  attorney  resides,  and  filed  and  recorded  in  the 
office  of  the  Secretary  of  State.  Any  corporation  failing  to  comply  with  such 
requirement  within  twelve  months  from  the  date  of  incorporation  shall  thereby 
forfeit  its  charter  (Acts  of  1907,  Extra  Session,  chap.  10).  Within  ninety  days 
after  incorporation  non-resident  domestic  corporations  must,  by  power  of 
attorney,  duly  executed  and  acknowledged  and  filed  in  the  Auditor's  office  of 
the  State,  appoint  the  said  Auditor  and  his  successors  in  office  their  attorney 
in  fact  to  accept  service  of  process  and  notice  in  the  State  for  such  corporation, 
and  by  the  same  instrument  they  must  declare  their  consent  that  service  of 
any  process  or  notice  in  the  State  upon  said  attorney  in  fact,  or  his  acceptance 
thereof  endorsed  thereon,  shall  be  equivalent  for  all  purposes,  and  shall  be  and 
constitute  due  and  legal  service  upon  said  corporation.  The  post-office  address 
of  all  non-resident  domestic  corporations  must  be  filed  with  the  power  of  at- 

592 


DIGEST    OF    INCORPORATION    ACTS.  —  WEST    VIRGINIA. 

torney.  Non-resident  domestic  corporations  may,  if  they  choose,  however,  des- 
ignate, in  addition  to  the  State  Auditor,  other  persons  within  the  State  as  their 
attorney  in  fact  upon  whom  service  of  process  may  be  made  (Laws  of  1905, 
Senate  Bill  No.  77,  passed  February  22,  1905).  Business  must  be  commenced 
within  one  year  after  incorporation  (Laws  of  1901,  chap.  35). 

Bank  v.  Lumber  Co.,  32  W.  Va.  357;  9  S.  E.  243;  Richardson  v.  Graham,  45  W.  Va. 
134;  30  S.  E.  92. 

10.  Organization  Meeting.  —  May  be  held  within  or  without  the  State 
(Code  54  :  15,  23). 

11.  Meetings  of  Stockholders  and  Directors.  —  If  the  by-laws  so  pro- 
vide, any  stockholders'  or  directors'  meetings  may  be  held  without  the  State. 
Otherwise  they  must  be  held  within  the  State  (Code  54 :  23 ;  see  also  Code 
53:51,  as  amended  by  Laws  of  1901,  chap.  35). 

Reilly  v.  Oglebay,  25  W.  Va.  36;  R.  S.  &  G.  Ry.  Co.  v.  Woodyard,  46  W.  Va.  558;  33 
S.  E.  285. 

12.  Directors'    Qualifications    and    Liabilities,      a.    Qualifications.  — 

There  must  be  at  least  five  directors,  unless  the  by-laws  otherwise  prescribe. 

Unless  otherwise  provided  by  the  by-laws,  directors  must  be  stockholders  and 

residents  of  the  State  (Code  53  :  49). 

Donnally  v.  Hearndon,  41  W.  Va.  519;  23  S.  E.  646;  Darr'ah  v.  Company,  50  W.  Va. 
417;  40  S.  E.  373. 

b.  Liabilities.  —  Assenting  directors  are  jointly  and  severally  liable  to 
creditors  for  the  illegal  declaration  of  dividends,  to  the  extent  of  the  capital  ille- 
gally withdrawn  in  this  manner  (Code  53 :  40). 

Zenn  v.  Mendel,  9  W.  Va.  580;  Smith  v.  Cornelius,  41  W.  Va.  59;  23  S.  E.  599;  Liner 
v.  Company,  44  W.  Va.  175;   28  S.  E.  730;  Kyle  v.  Wagner,  45  W.  Va.  349;   32  S.  E.  213. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  creditors  to 
the  amount  of  their  unpaid  stock  subscriptions.  They  are  also  liable  to  creditors 
to  the  extent  of  any  illegal  dividends  received  by  them  (Cons.,  Art.  II.  sec.  2; 
Code  53  :  22,  40). 

W.  E.  R.  E.  Co.  v.  Nash,  51  W.  Va.  341 ;  41  S.  E.  182. 

14.  Stock  Certificates.  —  Must  be  signed  by  the  president  or  vice-president 
and  such  other  officers,  if  any,  as  the  board  of  directors  may  direct.  The  certifi- 
cates must  show  the  amount  paid  on  each  share  (Code  53 :  35,  as  amended  by 
Laws  of  1901,  chap.  35). 

15.  Preferred  Stock.  —  The  act  specially  provides  that  preferred  stock 
may  be  issued  either  by  providing  for  it  in  the  certificate  of  incorporation,  or 
by  resolution  adopted  at  a  general  meeting  of  the  corporation  (Code  53 :  61 ; 
Code  54:6,  as  amended  by  Laws  of  1901,  chap.  35). 

16.  Payment  of  Capital  Stock.  —  The  statute  provides  that  at  least  ten 
per  cent  of  the  par  value  of  each  share  shall  be  paid  at  the  time  of  such  sub- 
scription, and  the  residue  as  required  by  the  board  of  directors  or  the  commis- 
sioners having  control  of  the  subscription.  Stock  in  corporations  other  than 
mining  and  manufacturing  shall  not  be  sold  or  disposed  of  at  less  than  par, 
except  by  a  vote  of  three-fourths  of  all  the  stock  of  the  corporation  outstand- 
ing after  the  advertisement  of  such  intention.  Hut  mining  or  manufacturing 
corporations  may  issue  stocks  or  bonds,  and  negotiate  the  sale  of  the  same,  in 
payment  for  real  and  personal  property,  at  such  price  and  upon  such  terms 
and  conditions  as  may  be  agreed  upon  by  the  owners  and  the  directors  or 
stockholders.  All  stock  so  issued  shall  be  fully  paid  and  not  liable  for  any 
further  call  or  assessment,  and  in  absence  of  actual  fraud  in  the  transaction 

38  593 


DIGEST   OF   INCORPORATION    ACTS.  —  WEST   VIRGINIA. 

the  valuation  placed  by  the  directors  upon  the  property  so  purchased  shall  be 
conclusive  (Code  52 :  24,  53 :  25,  as  amended  by  Laws  of  1901,  chap.  35). 
Richardson  v.  Graham,  45  W.  Va.  134;  30  S.  E.  92. 

17.  Books.  —  No  books  are  required  to  be  kept  in  the  State.  (See  Code 
53:47,  54.) 

Lipscombs  Adm'r  v.  Condon  (W.  Va.),  49  S.  E.  392. 

18.  Office  and  Agent.  —  Every  non-resident  corporation  must,  within 
ninety  days  after  its  organization,  execute  a  power  oi  attorney  appointing 
the  State  Auditor  as  its  statutory  attorney.  This  power  of  attorney  must  be 
filed  in  the  office  of  the  State  Auditor  (Laws  of  1905,  Senate  Bill  No.  77,  passed 
February  22,  1905).  All  domestic  corporations  must  appoint  a  resident  attor- 
ney on  whom  process  against  the  corporation  may  be  served  (Laws  of  1907, 
Extra  Session,  chap.  10). 

19.  Reports.  —  The  board  of  directors  must  make  an  annual  report  to  the 
stockholders  of  the  condition  of  the  corporation.  They  must  also,  within 
ninety  days  after  the  first  election,  and  after  every  annual  meeting  thereafter, 
make  a  report  giving  the  names  and  post-office  addresses  of  the  president  and 
secretary,  and  post-office  address  of  the  principal  office  of  the  corporation.  A 
penalty  is  provided  for  not  making  this  report  (Code,  chap.  53,  sec.  46,  as 
amended  by  Laws  of  1901,  chap.  35).  All  corporations  having  their  principal 
office  or  place  of  business  in  West  Virginia  must  annually,  between  the  first  day 
of  the  assessment  year  and  the  1st  day  of  May,  make  a  written  report  verified 
by  the  oath  of  the  president  or  chief  managing  officer  to  the  assessor  of  the 
county  in  which  its  principal  office  or  chief  place  of  business  is  situated,  show- 
ing the  following  items :  (a)  The  amount  of  authorized  capital  to  be  employed 
by  it ;  (b)  the  amount  of  cash  actually  paid  on  each  share  of  stock ;  (c)  the 
amount  of  money  on  hand  or  on  deposit  anywhere  subject  to  its  check  or  draft 
on  the  first  day  of  the  assessment  year;  (d)  the  amount  of  credits  and  invest- 
ments other  than  its  own  capital  stock  held  by  it  on  said  day,  with  their  true 
and  actual  value;  (e)  the  quantity,  location,  and  true  and  actual  value  of  all 
of  its  real  estate  and  the  magisterial  district  or  districts  in  which  it  is  located ; 
(/)  the  kinds,  quantity,  and  true  and  actual  value  of  all  tangible  property  in 
each  magisterial  district  in  which  it  is  located;  and  in  case  such  company 
desires  to  have  its  indebtedness  deducted  from  its  money,  credits,  investments  as 
hereinbefore  provided,  it  shall  also  include  in  such  report  (g)  an  itemized  state- 
ment such  as  is  provided  for  in  sec.  67  of  this  chapter,  and  all  of  the  provisions 
of  said  sec.  67  shall  apply  to  such  statement  so  far  as  they  are  applicable,  — 
which  statement  shall  be  verified  by  the  oath  of  the  president  or  chief  account- 
ing officer  of  such  company  substantially  in  the  form  required  for  individuals 
under  sec.  67  (Acts  of  1907,  chap.  80,  sees.  77,  78). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  in  force  in  West 
Virginia. 

21.  Annual  License  Tax.  —  Every  resident  corporation  shall  pay  an  annual 
license  tax  on  its  charter,  based  on  its  authorized  capital  stock  as  follows : 

If  the  authorized  capital  stock  be  $5,000  or  less,  $10;  if  more  than  $5,000 
and  not  more  than  $10,000,  $15;  if  more  than  $10,000  and  not  more  than  $25,000, 
$20;  if  more  than  $25,000  and  not  more  than  $50,000,  $25;  if  more  than 
$50,000  and  not  more  than  $75,000,  $45;  if  more  than  $75,000  and  not  more 
than  $100,000,  $50;  if  more  than  $100,000  and  not  more  than  $125,000,  $55; 
if  more  than  $125,000  and  not  more  than  $150,000,  $60;  if  more  than  $150,000 

594 


DIGEST    OF   INCORPORATION    ACTS.  —  WEST   VIRGINIA. 

and  not  more  than  $175,000,  $70;  if  more  than  $175,000  and  not  more  than 
$200,000,  $75;  if  more  than  $200,000  and  not  more  than  $300,000,  $90;  if 
more  than  $300,000,  and  not  more  than  $400,000,  $105;  if  more  than  $400,000 
and  not  more  than  $500,000,  $120;  if  more  than  $500,000  and  not  more  than 
$1,000,000,  $170;  and  $60  on  each  $1,000,000  or  fraction  thereof  in  excess  of 
$1,000,000  (Laws  of  1909,  chap.  68,  sec.  126). 

For  non-resident  corporations  the  annual  license  tax  is  as  follows:  $10,000 
or  less,  $15;  more  than  $10,000  and  not  more  than  $25,000,  $20;  more  than 
$25,000  and  not  more  than  $50,000,  $30 ;  if  more  than  $50,000  and  not  more 
than  $75,000,  $40;  if  more  than  $75,000  and  not  more  than  $100,000,  $50;  ■ 
if  more  than  $100,000  and  not  more  than  $1,000,000,  $50,  and  an  addi- 
tional 25  cents  on  each  $1,000,  or  fraction  thereof  in  excess  of  $100,000; 
if  more  than  51,000,000  and  not  more  than  $2,000,000,  $275,  and  an  addi- 
tional 20  cents  on  each  and  every  $1,000  or  fraction  thereof  in  excess  of 
$1,000,000:  if  more  than  $2,000,000  and  not  more  than  $4,000,000,  $475, 
and  an  additional  ten  cents  on  each  and  every  $1,000  or  fraction  thereof  in 
excess  of  $2,000,000 ;  if  more  than  $4,000,000,  $675,  and  an  additional  $50 
on  each  and  every  $1,000,000  or  fraction  thereof  in  excess  of  $4,000,000 
(Laws  of  1905,  chap.  36,  sec.  128). 

The  State  Auditor,  between  the  15th  day  of  April  and  the  15th  day  of 
May,  must  notify  every  corporation  liable  to  the  annual  license  tax  of  the 
time  of  payment  of  such  tax  and  the  amount  thereof.  The  tax  must  be  paid 
on  or  before  the  30th  day  of  June  of  each  year.  At  the  time  of  making  the 
payment  to  the  Auditor  every  domestic  corporation  shall  deliver  to  him  a 
statement  which  shall  show  the  name  of  the  corporation,  the  date  of  its  charter, 
the  name  and  post-office  address  of  its  attorney  of  record  in  the  State,  the  names 
and  post-office  addresses  of  its  president,  secretary,  and  treasurer,  the  amount 
of  its  authorized  capital  stock,  the  number  of  acres  of  land  it  holds  in  the  State  if 
the  number  exceeds  ten  thousand  acres,  and  such  other  facts  as  the  Auditor  may 
require.  Such  statement  shall  be  signed  by  the  president,  secretary,  or  treas- 
urer of  the  corporation.  The  amount  of  such  tax  shall  be  deemed  a  preferred 
debt  due  the  State,  and  shall  be  a  hen  on  all  property  and  assets  of  the  corpora- 
tion prior  to  all  other  hens  except  the  hen  of  the  taxes  levied  on  its  property 
for  State,  district,  or  county  purposes  (Acts  of  1907,  Extra  Session,  chap.  16). 
If  the  tax  is  not  paid  on  or  before  August  1st  of  each  year,  the  Auditor  pub- 
lishes a  list  of  delinquent  corporations.  Any  delinquent  corporation  may,  on 
or  before  the  1st  day  of  November  following,  or  at  any  time  before  judgment 
or  decree  is  entered,  pay  the  amount  of  such  taxes,  and  a  penalty  of  one  per 
cent  for  each  month  or  fractional  part  thereof  that  such  failure  has  continued, 
but  the  amount  thereof  shall  not  be  less  than  $5.  Between  the  1st  day  of 
February  and  the  1st  day  of  December  the  Auditor  shall  certify  to  the  gov- 
ernor and  Secretary  of  State  a  list  of  all  delinquent  corporations  (Acts  of  1907, 
Extra  Session,  chap.  16.     As  to  amount  of  annual  license  taxes  see  ante,  sec.  7). 

22.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  on  the  following  grounds: 

(1)  For  failing  to  have  five  stockholders  for  a  period  of  six  months  (Code, 
chap.  53,  sec.  17). 

(2)  For  failure  to  pay  license  tax  (Code,  chap.  32,  sec.  90,  as  amended  by 
Laws  of  1901,  chap.  35;  Laws  of  1903,  chap.  4;  Acts  of  1907,  chaps.  9,  16, 
Extra  Session). 

(3)  For  suspension  of  business  for  two  years  (Code,  chap.  53,  sec.  7). 

595 


DIGEST    OF    INCORPORATION    ACTS.  —  WEST    VIRGINIA. 

(4)  For  failure  to  organize  and  commence  business  within  one  year  after 
incorporation  (Code,  chap.  53,  sec.  6,  as  amended  by  Laws  of  1901,  chap.  35). 

(5)  For  misuse  or  abuse  of  charter  (Code,  chap.  109,  sees.  6-12). 

(6)  Where  the  certificate  has  been  obtained  for  a  fraudulent  purpose,  or 
for  a  purpose  not  authorized  by  law  (Code,  chap.  109,  sees.  6-12). 

(7)  For  failure  to  appoint  resident  agent  as  required  by  law  (Code,  chap. 
54,  sec.  24 ;  Laws  of  1905,  Senate  Bill  No.  77 ;  Acts  of  1907,  chap.  10,  Extra 
Session). 

Moore  v.  Schoffert,  22  W.  Va.  282;    G.  L.  Co.  v.  Ward,  30  W.  Va.  43;   3  S.  E.  227. 

23.  Amendments.  —  Any  corporation  formed,  or  which  may  hereafter  be 
formed,  or  which  has  accepted  or  may  accept  the  provisions  of  this  chapter, 
may,  by  a  resolution  at  a  general  or  special  meeting  of  the  stockholders  thereof, 
change  the  place  of  its  principal  office,  or  make  such  reduction  or  increase  in 
the  number  of  shares  of  its  capital  stock,  or  the  par  value  of  each  share,  as 
may  be  decided  upon  by  said  stockholders,  a  majority  of  the  stock  of  such 
company  being  represented  by  the  holders  thereof  at  such  meeting  in  person 
or  by  proxy  and  voting  therefor;  provided  that  notice  be  given  by  advertise- 
ment published  at  least  two  weeks  before  such  action  in  some  newspaper  of 
general  circulation  printed  in  the  county  wherein  the  principal  office  of  such 
corporation  is  located,  if  such  office  be  within  the  State ;  and  if  such  office  be 
not  in  this  State,  then  in  some  newspaper  printed  at  the  capital  of  this  State, 
of  the  intention  to  offer  such  resolution ;  and  provided,  further,  that  such 
resolution  may  be  adopted  without  such  notice  being  published,  if  the  meeting 
at  which  it  is  adopted  be  assented  to  in  writing  by  all  of  the  stockholders  of 
the  company  at  the  time  or  before  the  meeting  is  held.  Any  corporation  here- 
tofore incorporated,  or  that  may  be  incorporated  before  this  act  takes  effect 
(that  is,  before  February  18,  1901),  may  reduce  its  authorized  capital  stock, 
in  the  manner  prescribed  in  this  act.  If  such  application  be  made  to  the  Sec- 
retary of  State  before  January  1,  1903,  he  shall  charge  no  fee  whatever  for 
such  certificate,  or  for  any  work  in  connection  therewith  or  relating  thereto 
provided  in  this  act,  nor  shall  he  collect  a  tax  for  the  State  seal  thereon  (Code 
54:21,  amended  1901,  Act  35). 

When  such  change  of  principal  office  or  increase  or  reduction  shall  have 
been  made  by  any  such  corporation,  the  president  thereof  shall,  under  his  sig- 
nature and  the  seal  of  the  corporation,  certify  the  resolution  to  the  Secretary 
of  State ;  and  the  Secretary  of  State,  under  his  hand  and  the  great  seal  of  the 
State,  shall  issue  to  the  corporation  so  making  such  change  of  principal  office 
or  increase  or  reduction,  a  certificate  reciting  the  resolution  and  declaring  the 
proposed  change  of  principal  office  or  increase  or  reduction  to  be  authorized 
by  law,  which  certificate  shall  be  received  in  all  courts  and  places  as  evidence 
of  the  change  in  the  number  or  par  value  of  the  shares  of  the  capital  stock 
of  such  corporation,  and  of  the  authority  to  increase  or  reduce  the  same,  or  of 
such  change  of  said  principal  office  (Code  54 :  22,  as  amended  by  1901,  Acts  35). 
A  corporation  at  any  time,  when  it  accepts  the  provisions  of  this  chapter,  may 
change  the  par  value  of  its  shares,  as  the  stockholders  thereof  in  general  meet- 
ing, or  the  board  of  directors  under  the  authority  given  them  by  the  stock- 
holders, may  determine ;  in  which  case  the  statement  to  be  filed  as  aforesaid 
with  the  Secretary  of  State  shall  show  the  proposed  change,  and  the  same 
shall  have  effect  from  the  date  of  the  certificate  of  incorporation  (Code  54 :  13). 

If  the  stockholders  of  a  joint  company  desire  to  change  the  name  thereof, 
596 


DIGEST    OF   INCORPORATION    ACTS.  —  WEST   VIRGINIA. 

they  may  do  so  in  the  same  manner  that  they  may  increase  or  reduce  the  num- 
ber of  shares  of  the  capital  stock,  and,  after  doing  so,  such  resolution  chang- 
ing such  name,  certified  under  the  common  seal  and  signature  of  the  president 
of  the  corporation,  shall  be  delivered  to  the  Secretary  of  State,  who  shall  issue 
his  certificate  under  seal  reciting  the  resolution,  and  declaring  that  the  cor- 
poration is  to  be  thereafter  known  by  the  new  name  so  adopted;  and  such 
certificate  shall  be  evidence  of  the  change  of  name  therein  specified,  and  the 
Secretary  of  State  shall  keep  an  index  in  his  office  showing  the  new  name  and 
the  change  from  the  old  name,  and  the  old  name  showing  the  change  to  the 
new  name  (Code  53:  12,  amended  1901,  Act  35). 

Any  corporation,  except  railroad  companies,  may  agree  to  and  adopt  a  new 
agreement,  so  as  to  enlarge  or  diminish  the  objects  and  purposes  for  which  it 
was  incorporated,  by  signing  and  acknowledging  a  new  agreement  in  all  respects 
as  the  original  agreement  was  signed  and  acknowledged.  Such  new  agree- 
ment must  be  signed  and  acknowledged  by  the  holders  of  a  majority  of  the 
stock  of  the  corporation,  and  a  resolution  showing  that  such  new  agreement 
has  been  made  must  be  spread  upon  the  minutes  of  the  stockholders'  meeting 
and  concurred  in  by  the  holders  of  a  majority  of  the  stock.  When  such  new 
agreement  is  made,  the  same  and  a  certified  copy  of  such  resolution,  under 
the  hand  of  the  president  of  the  corporation  and  the  seal  of  the  corporation, 
shall  be  delivered  to  the  Secretary  of  State,  and  the  Secretary  of  State  shall 
issue  his  certificate  in  the  form  prescribed  in  the  ninth  section  of  this  chapter, 
so  far  as  the  same  may  be  found  practicable;  and  from  thence  such  corpora- 
tion shall  be  subject  to  such  new  agreement  and  certificate.  And  all  the  pro- 
visions of  this  chapter  shall  apply  to  such  new  certificates  and  to  the  corporations 
receiving  the  same,  in  like  manner  as  to  original  certificates  of  incorporation 
and  agreements,  except  as  herein  otherwise  provided. 

L.  F.  &  S.  H.  R.  R.  Co.  v.  Company,  25  W.  Va.  324. 

24.  Extension  of  Corporate  Existence.  —  May  be  extended  upon  com- 
pliance with  the  statute  for  an  additional  period  of  fifty  years  (Code  54,  sec. 
11,  as  amended  by  Laws  of  1901,  chap.  35). 

25.  Dissolution.  —  A  majority  of  the  stockholders  may  at  any  time  at  a 

meeting  resolve  to  discontinue  the  corporate  business,  and  may  divide  the 

property  and  assets  that  may  remain  after  paying  the  debts  and  liabilities  of 

the  corporation.    Before  a  certificate  of  dissolution  shall  issue,  all  State  license 

taxes  must  be  paid.     Not  less  than  one-third  in  interest  of  the  stockholders 

of  a  corporation  desiring  to  wind  up  its  affairs  may  petition  the  Court  of  Chancery 

in  the  county  in  which  the  principal  office  or  place  of  business  is  situated; 

but  if  there  be  no  such  office  or  place  of  business  in  the  State,  they  may  petition 

the  Circuit  Court  of  the  county  in  which  the  other  stockholders  or  any  one  or 

more  of  them  reside,  stating  the  grounds  of  their  application.     The  charter 

may  also  be  voluntarily  surrendered  before  organization  (Code,  chap.  53,  sec.  56 ; 

chap.  53,  sees.  57-59;   chap.  53,  sec.  6,  as  amended  by  Laws  of  1901,  chap.  35; 

Laws  of  1903,  chap.  3,  sec.  4). 

Weigand  v.  Company,  44  W.  Va.  133;  28  S.  E.  803;  Hurst  v.  Company,  30  W.  Va.  158; 
3  S.  E.  564. 

26.  Foreign  Corporations.  —  Foreign  corporations  must  file  in  the  Secre- 
tary of  State's  office  and  in  the  office  of  the  county  clerk  of  the  county  where 
the  principal  office  is  located,  a  copy  of  the  charter.  It  must  also  file  in  the 
latter  office  a  certificate  from  the  Secretary  of  State  showing  that  it  has  com- 
plied  with  the  laws  of  the  State  regulating  the  transaction  of  business  therein 

597 


DIGEST    OF   INCORPORATION"  ACTS.  —  WEST   VIRGINIA. 

by  foreign  corporations.  It  must  also  file  with  the  Secretary  of  State  a 
written  acceptance  of  the  condition  that  it  will  exercise  its  powers  subject 
to  same  conditions  imposed  upon  domestic  corporations.  Foreign  corpora- 
tions must  at  the  time  of  procuring  authority  to  do  business  in  the  State, 
by  power  of  attorney  duly  executed  and  acknowledged  and  filed  in  the  State 
Auditor's  office,  appoint  such  State  Auditor  as  its  attorney  in  fact  upon  whom 
process  and  notices  may  be  served.  At  the  same  time  they  must  pay  to  the 
State  Auditor  $10  for  his  services  as  such  for  the  then  current  year  ending  on 
the  30th  day  of  April  next  ensuing;  and  on  or  before  the  1st  day  of  May  for 
each  year  thereafter  such  corporation  shall  pay  to  the  State  Auditor  a  like  sum 
of  $10  for  his  services  as  such  attorney.  The  post-office  address  of  the  corpora- 
tion must  be  filed  at  the  same  time  (Laws  of  1905,  Senate  Bill  No.  77,  passed 
February  22,  1905 ;  Acts  of  1907,  Extra  Session,  chap.  9).  If  the  certificate  of 
authority  be  issued  after  the  last  day  of  July  the  Secretary  of  State  shall  assess 
and  collect  $1  for  each  month  or  fractional  part  thereof  to  ensue  before  the 
1st  day  of  the  next  May ;  and  on  or  before  the  said  1st  day  of  May  in  each  year 
the  said  corporation  shall  pay  to  the  Auditor  a  like  sum  of  $10  for  his  services 
as  such  attorney,  provided  that  if  the  certificate  of  authority  be  issued  in  the 
month  of  March  or  April  the  Secretary  of  State  shall  assess  and  collect  the  sum 
of  $1  for  each  month  and  shall  in  addition  thereto  at  the  same  time  assess  and 
collect  the  full  fee  of  $10  for  the  year  beginning  with  the  1st  day  of  the  ensuing 
May  (Acts  of  1907,  Extra  Session,  chap.  9). 

Every  foreign  corporation  at  the  time  of  its  application  for  the  certificate 
mentioned  in  sec.  30,  chap.  54,  of  the  Code,  shall  file  with  the  Secretary  of 
State  a  report,  preliminary  to  the  annual  report  hereinafter  mentioned,  which 
preliminary  report  shall  contain  sufficient  information  upon  which  to  base  an 
assessment  of  its  license  tax  for  the  then  current  year.  Before  issuing  such 
certificate  the  Secretary  of  State  shall  collect  the  amount  of  license  tax  he 
finds  to  be  proper  for  the  license  tax  year  ending  with  the  30th  day  of  June.  If 
the  certificate  be  issued  after  the  30th  day  of  September  and  before  the  1st  day 
of  July  of  the  ensuing  year  the  Secretary  of  State  shall  assess  and  collect  such 
taxes  at  the  rate  of  one-tenth  of  the  amount  of  the  annual  license  tax  for  each 
month  or  fractional  part  of  a  month  to  ensue  before  the  said  1st  day  of  the 
ensuing  license  tax  year.  Thereafter  on  or  before  the  1st  day  of  the  license 
tax  year  next  following  the  date  of  the  certificate  of  authority,  and  on  or  before 
every  succeeding  first  day  of  the  license  tax  year,  the  Auditor  shall  collect  such 
tax  for  the  full  year,  provided  that  if  the  certificate  of  authority  be  issued  in 
either  the  months  of  May  or  June  of  any  one  year  the  Secretary  of  State  shall 
assess  and  collect  the  license  tax  for  said  months  as  well  as  for  a  full  year  begin- 
ning with  the  1st  day  of  July  of  the  ensuing  license  tax  year  (Acts  of  1907, 
Extra  Session,  chap.  16). 

Every  foreign  corporation  holding  property  or  doing  business  in  the  State 
shall  make  a  report  to  the  Auditor  annually  in  the  month  of  April  of  each  year, 
in  which  report  shall  be  set  out : 

1.  The  name  of  such  corporation,  the  name  of  the  State  or  country  by 
which  incorporated,  the  date  of  incorporation,  the  date  of  the  certificate  of 
the  Secretary  of  State  authorizing  it  to  do  business  in  this  State,  the  place  of 
its  principal  office,  the  names  and  post-office  addresses  of  its  president,  secre- 
tary, and  of  its  officer  (if  any)  charged  with  the  duty  of  making  returns  of 
its  property  for  taxation,  and  the  name  and  post-office  address  of  its  attorney 
of  record  in  this  State. 

598 


DIGEST    OF   INCORPORATION   ACTS.  —  WEST   VIRGINIA. 

2.  The  number  of  shares  of  its  authorized  capital  stock  and  the  par  value 
of  each  share. 

3.  The  value  of  the  property  owned  and  used  by  such  corporation  within 
the  State,  where  situate,  of  what  it  consists,  and  the  number  of  acres  of  land 
it  holds  in  this  State,  and  the  value  of  its  property  owned  and  used  without 
this  State ;  and 

4.  The  proportion  of  its  capital  stock  which  is  represented  by  property 
owned  and  used  in  the  State  of  West  Virginia,  which  report  shall  be  verified 
by  the  affidavit  of  the  president,  secretary,  or  other  executive  officer  of  such 
corporation.  It  shall  be  the  duty  of  the  Auditor  to  assess  and  fix  the  license 
tax  according  to  the  proportion  of  the  capital  stock  which  is  represented  by 
the  property  owned  and  used  in  this  State,  according  to  the  rates  prescribed 
in  sec.  126  of  tliis  chapter,  if  the  assessed  value  of  its  property  located  in  this 
State  amounts  to  $5,000;  but  if  the  assessed  value  of  such  property  be  less 
than  $5,000,  the  assessment  shall  be  according  to  the  rates  prescribed  in  sec.  128 
of  this  chapter ;  provided  that  no  such  corporation  shall  pay  an  annual  license 
tax  of  less  than  $100.  The  Auditor  may  in  any  case  require  such  additional 
information  as  he  may  deem  necessary  to  enable  him  to  assess  and  fix  the 
just  amount  of  license  tax  of  such  corporation;  and  it  shall  be  his  duty  to 
notify  every  such  corporation  of  the  amount  so  assessed  by  him ;  and  it  shall 
be  the  duty  of  the  corporation  to  pay  the  same  into  the  treasury  of  this  State 
within  thirty  days  thereafter,  and  if  it  shall  fail  to  do  so,  it  shall  be  liable  to 
the  penalties  prescribed  in  sees.  136  and  137  of  this  chapter. 

If  the  corporation  has  property  to  the  amount  of  $5,000  or  over  within  the 
State,  it  must  pay  the  same  annual  license  tax  as  is  required  of  domestic  corpora- 
tions. If  the  amount  of  its  property  is  not  $5,000,  it  must  pay  the  same  annual 
tax  as  is  required  of  non-resident  domestic  corporations  (Laws  of  1905,  chap.  36, 
sees.  126,  128,  130,  137;  Laws  of  1909,  chap.  68,  sec.  126). 

If  any  foreign  corporation  desires  no  longer  to  hold  property  and  transact 
business  in  this  State,  it  may  surrender  to  the  State  its  authority  therefor  in 
the  following  manner:  It  shall  publish  once  in  each  week  for  four  successive 
weeks,  in  some  newspaper  of  general  circulation  published  in  the  county  in  the 
State  where  it  carries  on  its  business,  a  notice  of  its  intention  to  withdraw 
from  the  State.  After  such  publication  it  shall  make  application  to  the  Secretary 
of  State  for  a  certificate  of  withdrawal,  which  application  shall  be  signed  by 
the  president  of  the  corporation,  sealed  with  its  corporate  seal  and  attested 
by  its  secretary,  and  be  accompanied  by  a  copy  of  the  said  notice  and  the 
publisher's  certificate  of  its  publication.  The  Secretary  of  State  shall  file  the 
eame  in  his  office  and  issue  to  said  corporation  a  certificate  of  withdrawal,  but 
said  certificate  of  withdrawal  shall  not  be  issued  unless  and  until  the  corporation 
has  paid  into  the  State  treasury  any  amount  it  may  owe  as  license  tax,  including 
all  fines,  interest,  and  penalties  as  provided  in  sec.  56  of  chap.  53  of  the  Code. 
The  issuance  of  such  certificate  of  withdrawal  shall  not  relieve  the  corporation 
of  any  debt  or  obligation  due  from  it  to  the  State  or  any  resident  thereof. 

Toledo,  etc.  Co.  v.  Thomas,  33  W.  Va.  556;  11  S.  E.  37;  B.  J.  Co.  v.  Scherr,  510  W  Va. 
533;  40  S.  E.  514;  Floyd  v.  N.  L.  &  I.  Co.,  49  W.  Va.  327;  38  S.  E.  053;  Rell  v.  Company,  32 
W.  Va.  164;  9  S.  E.  212;  Quesenberry  v.  Association,  44  W.  Va.  512;  30  S.  E.  73;  Guilds  v. 
Hurd,  32  W.  Va.  66;  9  S.  E.  362;  Thompson  v.  Association  (W.  Va.),  50  8.  E.  756. 


599 


DIGEST    OF   INCORPORATION   ACTS. — WISCONSIN. 


WISCONSIN. 

(The  references  are  to  the  Wisconsin  Statutes  of  1898,  unless  otherwise  stated.  They  are 
published  in  two  volumes,  and  are  edited  and  annotated  by  Sanborn  &  Berryman.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  Wisconsin  is  found  in  the  Revised  Statutes 
of  Wisconsin,  1898,  Title  XIX.  chap.  85,  sees.  1748  to  1776.  Special  acts  are 
provided  for  banking,  insurance,  railway  construction,  and  operation  companies 
and  plank  and  turnpike  roads. 

2.  Incorporators.  —  Three  or  more  adult  persons.  All  must  be  residents 
of  the  State  (R.  S.,  1771). 

3.  Contents  of  the  Articles  of  Incorporation. — The  articles  of  in- 
corporation must  contain : 

a.  Purposes.  —  Any  number  of  the  classes  specified  (R.  S.,  sec.  1771). 

State  ex  rel.  Lederer  v.  Company,  88  Wis.  512;  60  N.  W.  796. 

b.  Name.  —  Similarity  of  names  expressly  forbidden.  Cannot  use  the  names 
of  individuals  in  the  manner  in  which  they  are  ordinarily  used  in  co-partnerships 
(R.  S.,  sec.  1772,  sub.  2).  The  name  must  be  such  as  to  distinguish  it  from 
any  other  corporation  organized  under  the  Laws  of  the  State  (Laws  of  1905, 
chap.  507).  No  corporate  name  shall  be  held  illegal  because  of  the  omission 
of  the  word  "limited"  (Laws  of  1907,  chap.  507). 

I.  O.  of  F.  v.  Commissioner,  98  Wis.  94;  73  N.  W.  326. 

c.  Domicile.  —  The  location  in  some  city,  village,  or  town  in  the  State 
(R.  S.,  sec.  1772,  Laws  of  1905,  chap.  507). 

d.  Capital  Stock.  —  Amount,  number  of  shares,  and  par  value  of  same 
(R.  S.,  sec.  1772).  If  preferred  stock  is  to  be  issued,  provision  therefor  should 
be  inserted  in  this  subdivision  of  the  articles  (Laws  of  1903,  chap.  109).  The 
capital  stock,  number  and  par  value  of  shares  are  unlimited  as  to  amount 
(sec.  1759  as  amended  by  Laws  of  1907,  chap.  576). 

e.  Directors  and  O  cers.  —  Designation  of  general  officers  and  number  of 
directors.  There  must  be  at  least  three  directors,  and  they  may  be  divided  into 
three  classes  if  desired  (R.  S.,  sees.  1772,  sub.  4,  1776 ;  Laws  of  1905,  chap.  507). 

/.  Duties  of  Officers.  —  Principal  duties  of  the  several  officers  respectively 
(R.  S.,  sec.  1772,  sub.  5). 

g.  Membership.  —  Method  and  conditions  upon  which  members  shall  be 
accepted,  discharged,  or  expelled  (R.  S.,  sec.  1772,  sub.  6). 

h.  Regulation  of  Corporate  Affairs.  —  Provisions  for  the  interests  of  the 
corporation,  the  accomplishment  of  the  purposes  thereof  (Laws  of  1907,  chap. 
562;   Laws  of  1909,  chap.  355). 

Ford  v.  Hill,  92  Wis.  188;  66  N.  W.  115. 

i.  Corporate  Existence.  —  Duration  may  be  inserted  if  desired ;  otherwise 
unlimited  (Laws  of  1905,  chap.  507). 

j.  Organization  Meeting.  —  Time  and  place  for  first  meeting  for  election  of 
officers  (R.  S.,  sec.  1773). 

4.    Statutory  Powers.  —  In  addition  to  a  very  full  statutory  enumeration 

600 


DIGEST    OF    INCORPORATION    ACTS.  —  WISCONSIN. 

of  the  "common  law"  and  "incidental  powers"  the  act  provides  for  the  follow- 
ing additional  powers :  A  limited  power  to  hold  stock  in  other  corporations ;  to 
vote  by  proxy ;  to  issue  preferred  stock ;  to  acquire  the  rights,  privileges,  or 
franchises  conferred  upon  any  person  by  the  law  of  the  State  where  the  same 
would  be  in  direct  aid  of  the  corporation's  business ;  may  establish  a  sinking 
fund  for  the  payment  of  corporate  debts,  classify  directors,  and  hold  stock  in 
other  corporations;  may  sell  all  of  its  property  (R.  S.,  sees.  1748,  1754,  1757, 
1759  a,  1760,  1775;  Laws  of  1899,  chaps.  100,  198;  Laws  of  1903,  chap.  12; 
Laws  of  1905,  chap.  382) ;  may  transact  business  outside  of  the  State  and 
establish  branch  offices  therein  (sec.  1748,  Laws  of  1905,  chap.  507,  sec.  5). 

N  M  T  S  Co  No.  2  v.  Bishop,  103  Wis.  492;  79  N.  W.  785;  Marvin  v.  Anderson,  111 
Wis.  387;  87  N.  W.  226;  Grabiner  v.  Post,  119  Wis.  392;  96  N.  W.  783. 

5.  Procuring  the  Charter.  — The  articles  of  association  duly  signed  and 
acknowledged,  or  a  true  copy  thereof,  verified  as  such  by  the  affidavits  of  two 
of  the  signers  thereof,  must  be  first  filed  in  the  office  of  the  Secretary  of  State. 
A  like  verified  copy  and  certificate  of  the  Secretary  of  State  showing  the  date 
when  the  articles  were  filed  and  accepted,  must  within  thirty  days  thereafter 
be  recorded  by  the  register  of  deeds  of  the  county  where  the  corporation  is 
located.  The  register  of  deeds  must  forthwith  transmit  to  the  Secretary  of  State 
a  certificate  stating  the  time  when  such  copy  was  recorded,  for  which  he  shall 
receive  a  fee  of  twenty-five  cents.  Upon  receipt  of  such  certificate  the  Secretary 
of  State  shall  issue  a  certificate  of  incorporation  (Laws  of  1905,  chap.  507; 
Laws  of  1909,  chap.  355).  The  better  practice  is  upon  incorporation  to  have 
the  articles  executed  as  duplicate  originals.  No  corporation  shall  have  a  legal 
existence  until  such  articles  have  been  so  left  for  record.  The  organization  tax 
must  be  paid  to  the  Secretary  of  State  at  the  time  the  articles  are  presented  to 
him  for  filing  (R.  S.,  sec.  1773,  as  amended  by  chap.  238,  Session  Laws  of  1901). 
Business  cannot  be  commenced  until  one-half  of  the  capital  stock  is  subscribed 
and  twenty  per  cent  paid  in  (R.  S.,  sec.  1773). 

Attorney-General  v.  Company,  35  Wis.  425;  B.  P.  Co.  v.  Rose  et  al.,  95  Wis.  146;  70 
X.  W.  302;  Slocum  v.  Head,  105  Wis.  431;  81  X.  W.  673. 

6.  Corporate  Indebtedness.  —  Bonds  can  only  be  issued  for  money, 
labor,  or  property  estimated  at  its  true  money  value,  equal  to  seventy-five  per 
cent  of  the  par  value  thereof  (R.  S.,  sec.  1753).  There  is  no  statutory  limitation 
upon  the  amount  of  corporate  indebtedness. 

7.  Organization  Tax.  —  For  filing  articles  of  beet  sugar  or  dairy  com- 
panies, $10;  for  filing  articles  of  companies  formed  for  the  purpose  of  mining, 
smelting,  and  owning  mines  and  minerals  in  the  State  of  Wisconsin,  $25,  if  the 
capitalization  is  $25,000  or  less,  and  $1  for  each  additional  $1,000  capitalization 
up  to  $150,000;  and  for  all  such  corporations  with  a  capitalization  in  excess 
of  $150,000,  a  fee  of  $150.  For  all  other  business  corporations  the  tax  is  $25 
if  the  capital  stock  is  $25,000  or  less;  if  in  excess  of  $25,000,  there  is  an  addi- 
tional tax  of  $1  for  each  additional  thousand  dollars  of  capitalization  (R.  S., 
sec.  1772,  as  amended  by  chap.  238,  Session  Laws  of  1901 ;  Laws  of  1905,  chap. 
507;  Laws  of  1907,  chap.  562;   Laws  of  1909,  chap.  355). 

Heath  v.  Company,  39  Wis.  146. 

8.  Filing  and  Recording  Fees.  —  There  are  no  fees  for  filing  articles  in 
the  office  of  the  Secretary  of  State  other  than  the  payment  of  the  organization 
tax.    For  certified  copy  of  articles  of  incorporation,  the  charge  is  12  cents  per 

601 


DIGEST    OF   INCORPORATION    ACTS.  —  WISCONSIN. 

folio,  and  25  cents  for  certificate ;    for  filing  amendments,  $10 ;    for  recording 
certificate  in  the  local  county  office,  10  cents  per  folio  of  one  hundred  words. 

9.  Commencing  Business.  —  A  corporation  cannot  transact  business  ex- 
cept with  its  members,  until  one-half  of  the  authorized  capital  stock  is  sub- 
scribed, and  twenty  per  cent  thereof  actually  paid  in  (R.  S.,  sec.  1773).  Business 
must  be  commenced  within  one  year  after  articles  are  filed  (R.  S.,  sec.  1763). 
Twenty  days  after  the  election  of  officers  it  is  advisable  that  a  list  of  the  officers 
elected  at  the  organization  meeting,  giving  their  names  and  addresses,  be  filed 
in  the  office  of  the  Secretary  of  State  (Laws  of  1905,  sec.  5 ;  see  also  post,  sec.  19). 

10.  Organization  Meeting.  —  Must  be  held  within  the  State.  The  meet- 
ing may  be  called  by  any  two  of  the  incorporators  on  ten  days'  notice  in  writing 
given  personally  or  by  two  weeks'  publication,  but  the  notice  may  be  waived 
if  all  of  the  subscribers  for  stock  are  present  in  person  or  by  proxy  (R.  S.,  sec. 
1773).  The  meeting  cannot  be  held  until  one-half  of  the  capital  stock  has  been 
subscribed  (R.  S.,  sec.  1773).  Until  organization  the  incorporators  have  by 
statute  the  direction  of  the  affairs  of  the  corporation  (Id.). 

Heath  v.  Company,  39  Wis.  146. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  within  the  State  (R.  S.,  sec.  1762).  Directors'  meetings  may  be 
held  without  the  State  if  the  by-laws  so  provide  (R.  S.,  1776).  Unless  a  pro- 
vision to  the  contrary  is  inserted  in  the  articles  of  incorporation  and  recited  in 
each  certificate  for  any  share  of  stock  issued  by  the  corporation,  every  stock- 
holder of  any  corporation  shall  be  entitled  to  one  vote  for  each  share  of  stock 
owned  and  held  by  him  at  every  meeting  of  the  stockholders,  and  at  every  elec- 
tion of  the  officers  thereof,  and  may  vote  either  in  person  or  by  proxy  at  such 
elections,  and  by  proxy  at  other  meetings  when  so  provided  by  the  by-laws  of 
the  corporation;  and  every  executor,  administrator,  guardian,  assignee  for 
creditors,  receiver  or  trustee  shall  represent  the  shares  of  stock  in  his  hands  at 
all  meetings  of  the  stockholders  and  may  vote  thereat  as  a  stockholder  (sec.  1760, 
as  amended  by  Laws  of  1911,  chap.  532). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications. — 
There  must  be  at  least  three  directors,  all  of  whom  must  be  stockholders  (R.  S., 
sec.  1772,  sub.  4,  sec.  1776).    There  are  no  residential  requirements. 

b.  Liabilities.  —  Directors  are  liable  for  illegal  declaration  of  dividends  and 
for  transacting  business  before  one-half  of  the  capital  stock  is  subscribed  for, 
and  twenty  per  cent  actually  paid  in  (R.  S.,  sees.  1765,  1773) ;  also  for  failure 
to  make  reports  or  refusing  to  allow  inspection  of  books  and  accounts  (Laws  of 
1905,  chap.  347).  Directors  may  avoid  liability  by  entering  their  dissent  in 
writing  in  the  minutes  of  the  directors'  meeting  (Laws  of  1903,  chap.  474). 

Directors  are  liable  for  misappropriating  corporate  funds  or  for  failing  to 
make  proper  entries  thereof  in  the  books  of  account  and  for  falsifying  accounts 
or  making  false  reports  (Laws  of  1909,  chap.  43). 

Gores  v.  Day,  99  Wis.  276;  74  N.  W.  787. 

13.  Stockholders'  Liabilities.  —  Stockholders  authorizing  the  transaction 
of  business  before  half  of  its  authorized  capital  is  subscribed  and  twenty  per 
cent  paid  in,  are  liable  for  debts  of  the  corporation  incurred  prior  thereto  (R.  S., 
sees.  1755,  1756,  1773).  They  are  also  personally  liable  to  the  amount  of  the 
stock  held  by  them  for  wages  due  clerks,  servants,  and  laborers,  for  services 
performed  for  a  period  not  exceeding  six  months  in  length  (R.  S.,  sec.  1769). 

602 


DIGEST    OF    INCORPORATION    ACTS.  —  WISCONSIN. 

They  are  also  liable  for  the  debts  of  the  corporation  to  the  extent  of  their  un- 
paid stock  subscriptions  (R.  S.,  sec.  1756).  They  are  also  liable  to  existing 
creditors  to  the  extent  of  any  diminution  of  capital  stock  (R.  S.,  sec.  1755;  see 
also  Laws  of  1901,  chap.  129). 

Sleeper  v.  Goodwin,  67  Wis.  577;  31  N.  W.  335;  Clokus  v.  Company,  92  Wis.  325-  66 
N.  W.  398. 

14.  Stock  Certificates.  —  Certificates  are  ordinarily  signed  by  the  presi- 
dent and  secretary  (R.  S.,  sec.  1751). 

15.  Preferred  Stock.  —  Any  corporation  may  provide  for  preferred  stock 
in  its  original  articles  of  organization  or  by  amendment  thereto  adopted  by  the 
unanimous  vote  of  the  stockholders,  and  may  in  such  original  articles  or  such 
amendment  thereto  adopted  by  unanimous  vote  of  the  stockholders,  provide 
for  the  payment  of  dividends  on  such  preferred  stock  out  of  the  profits  at  a 
specified  rate  before  dividends  are  paid  on  the  common  stock ;  for  the  cumula- 
tion of  such  dividends ;  for  a  preference  on  such  preferred  stock  not,  however, 
exceeding  the  par  value  thereof  over  the  common  stock  in  the  distribution  of 
the  corporate  assets  from  its  profits ;  for  the  redemption  of  such  preferred  stock 
and  for  defining  or  restricting  the  voting  power  of  such  preferred  stock.  Neither 
preferred  nor  common  stock  shall  bear  interest.  Certificates  of  both  preferred 
and  common  stock  shall  state  on  the  face  thereof  all  the  privileges  accorded  to 
and  all  restrictions  imposed  upon  the  preferred  stock.  No  change  or  amend- 
ment in  relation  to  such  preferred  stock  shall  be  made  except  by  way  of  amend- 
ment to  the  articles  of  organization  adopted  by  unanimous  vote  of  the  holders 
of  all  the  outstanding  stock,  both  preferred  and  common  (sec.  1759  a,  as  amended 
by  Laws  of  1907,  chap.  576). 

16.  Payment  of  Capital  Stock.  —  Stock  can  be  issued  only  for  money, 
labor,  or  property  estimated  at  its  true  money  value  equal  to  the  par  value 
thereof.  An  exception  is  made  in  the  case  of  stocks  listed  on  the  stock  exchanges 
of  New  York,  Chicago,  Boston,  and  Philadelphia.  No  corporate  bonds  can  be 
issued  except  for  money  or  for  labor  or  property  estimated  at  its  true  money 
value  actually  received  by  it  equal  to  seventy-five  per  cent  of  the  par  value 
thereof.  All  fictitious  increase  of  the  capital  stock  of  any  corporation  is  declared 
to  be  void  (sec.  1753  as  amended  by  Laws  of  1907,  chap.  576). 

First  Ave.  Land  Co.  v.  Parker,  111  Wis.  1;  86  N.  W.  604;  Shaw  v.  Gilbert,  111  Wis. 
165;  86  N.  W.  188. 

17.  Books.  —  Stock  books  and  books  of  account  must  be  kept  by  the  cor- 
poration at  its  principal  office  in  the  State  (R.  S.,  sees.  1750,  1757).  The  former 
are  open  to  the  inspection  of  stockholders  and  creditors  (Laws  of  1905,  chap. 
347).  The  books  required  by  statute  are  open  to  the  inspection  of  stockholders 
and  creditors. 

18.  Office  and  Agent.  —  Every  business  corporation  must  have  its  prin- 
cipal office  in  the  State,  and  its  managing  officer  or  superintendent  shall  also 
reside  therein  (R.  S.,  sec.  1750). 

19.  Reports.  —  Must  within  ten  days  after  election  of  its  officers  file  in 
the  office  of  the  register  of  deeds  of  county  in  which  the  corporation  is  located, 
and  where  its  articles  of  incorporation  are  recorded,  a  list  containing  name  of 
its  president,  vice-president,  if  any,  secretary,  cashier  or  managing  agent,  upon 
whom  service  of  process  may  be  made  (R.  S.,  sec.  1775  b;  Laws  of  1905,  chap. 
347).  All  domestic  corporations  must,  between  the  1st  day  of  January  and  the 
1st  day  of  March  of  each  year,  file  with  the  Secretary  of  State  a  report,  sworn 

G0:3 


DIGEST   OF   INCORPORATION   ACTS.  —  WISCONSIN. 

to  by  the  president,  secretary,  treasurer,  or  general  manager,  stating:  (1)  name 
of  such  corporation  and  location,  giving  street  and  number ;  (2)  the  name  and 
address  of  the  officers  and  directors  of  said  corporation,  giving  street  and  number; 
(3)  amount  of  authorized  capital  stock;  (4)  amount  of  capital  stock  paid  in 
money,  property,  and  services;  (5)  whether  such  corporation  was  engaged  in 
active  business  during  preceding  year;  (6)  nature  of  business  transacted  during 
preceding  year;  (7)  in  what  State  such  corporation  is  licensed  to  transact  busi- 
ness as  a  foreign  corporation  (sec.  1774,  as  amended  by  Laws  of  1907,  chap.  562). 

20.  Anti-Trust  Statute.  —  Combinations  and  monopolies  are  provided 
against  by  both  civil  and  penal  laws  (see  Cons.,  Art.  I,  sec.  22;  sees.  1770  e,  f,. 
g,  Laws  of  1905,  chap.  506;  Laws  of  1907,  chap.  562). 

21.  Annual  License  Tax.  —  There  is  no  annual  license  tax. 

22.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  for  failing  to  keep  an  office  and  a  managing  officer  or  superintendent 
within  the  State  (R.  S.,  sec.  1750),  for  entering  into  illegal  trusts  (sec.  1791  j,  k, 
1,  Laws  of  1905,  chap.  507;  Laws  of  1907,  chap.  562),  also  where  charter  is 
procured  upon  some  fraudulent  suggestion  or  enactment  (R.  S.,  sees.  3240,  3241). 
If  a  corporation  remains  insolvent  or  neglects  to  pay  its  debts  or  suspends  its 
ordinary  business  for  one  year,  it  is  deemed  to  have  surrendered  its  charter,  and 
shall  be  adjudged  to  be  dissolved  (R.  S.,  sec.  1763).  The  charter  may  be  for- 
feited for  failing  to  file  annual  report  (Laws  of  1907,  chap.  562). 

Phillips  v.  Albany,  28  Wis.  340;  State  ex  rel.  Cornish  v.  Tuttle,  53  Wis.  45;  9  N.  W. 
791;  Attorney-General  v.  Company,  93  Wis.  604;  67  N.  W.  1138;  Harrigan  v.  Gilchrist, 
121  Wis.  127;  99  N.  W.  901. 

23.  Amendments.  —  Any  corporation  may  at  any  meeting  of  the  stock- 
holders, by  a  vote  of  at  least  the  owners  of  two-thirds  thereof,  unless  a  greater 
vote  shall  be  required  in  its  articles,  amend  the  same  so  as  to  modify  its  business 
or  purposes,  change  its  name  or  location,  increase  or  decrease  its  capital  stock, 
change  its  officers  or  the  number  of  directors,  or  provide  anything  which  might 
have  been  originally  provided  for  in  such  articles.  Such  amendment  shall  be 
adopted  only  in  accordance  with  the  articles  of  organization,  which  shall  be 
therein  prescribed.  Duplicate  copies  of  such  amendment  must  be  prepared 
with  a  certificate  thereto  attached  signed  by  the  president  and  secretary  and 
sealed  with  the  corporate  seal,  stating  the  fact  and  the  date  of  the  adoption  of 
such  amendment,  the  total  number  of  shares  voting  in  favor  of  such  amendment, 
and  that  such  copy  is  a  true  copy  of  the  original.  These  are  then  forwarded  to 
the  Secretary  of  State,  one  to  be  filed  by  him  and  the  other  copy  to  be  returned 
with  his  certificate  attached  to  the  register  of  deeds,  who  must  record  the  same 
within  thirty  days  after  filing  with  the  Secretary  of  State.  The  register  of  deeds 
then  transmits  to  the  Secretary  of  State  a  certificate  stating  time  when  such 
amendment,  was  recorded  in  his  office.  Upon  receipt  of  such  certificate  the 
Secretary  of  State  issues  a  certificate  of  amendment  (Laws  of  1905,  chap.  507). 
No  amendment  to  the  articles  of  any  corporation  increasing  the  capital  stock 
shall  be  filed  unless  accompanied  by  the  vote  of  the  president  and  secretary  that 
at  least  one-half  of  the  capital  stock,  including  the  proposed  increase,  has  been 
duly  subscribed  and  at  least  twenty  per  cent  thereof  actually  paid  in.  The 
aforesaid  officers  and  any  other  officer  or  stockholder  consenting  to  the  incurring 
of  any  debt  or  liability  by  such  corporation,  while  having  knowledge  that  less 
than  one-half  of  the  authorized  capital  stock  has  been  subscribed,  or  that  less 
than  twenty  per  cent  thereof  has  been  actually  paid  in  shall  be  personally 
liable  upon  the  same  (Laws  of  1911,  chap.  532,  sec.  2). 

604 


DIGEST    OF    INCORPORATION    ACTS.  —  WISCONSIN. 

Whenever  the  corporate  name  shall  be  changed,  the  secretary  shall  publish 
a  notice  thereof  in  a  newspaper  published  at  or  nearest  the  place  of  location  of 
such  corporation  for  three  weeks.  Xo  change  of  location  of  any  such  corpora- 
tion if  beyond  the  limits  of  the  county  shall  be  valid  until  the  articles  of  organiza- 
tion be  amended  and  thereafter  shall  have  been  recorded  in  the  office  of  the 
register  of  deeds  of  the  county  to  which  the  same  shall  be  changed  (Laws  of 
1901,  chap.  238;  see  also  R.  S.,  sees.  1774,  1790). 

Wood  v.  Association,  63  Wis.  9;  22  N.  W.  756. 

24.  Dissolution.  —  Corporation  may  be  dissolved  by  two-thirds  vote  of 
capital  stock,  at  a  meeting  called  for  the  purpose  (R.  S.,  sec.  1789).  The  charter 
may  also  be  surrendered  before  organization  (R.  S.,  sec.  1773,  as  amended  by 
Laws  of  1905,  chap.  407).  The  statute  provides  that  a  dissolution  shall  follow 
a  rejection  of  a  fundamental  amendment  to  a  charter  by  more  than  one-half 
of  the  stock  (Laws  of  1903,  chap.  474,  p.  1315). 

Hinckley  et  al.  v.  Pfister  el  ah,  83  Wis.  64;   33  N.  W.  21. 

25.  Extension  of  Corporate  Existence. — There  is  no  provision  for 
extension  of  corporate  existence. 

26.  Foreign  Corporations.  —  Foreign  corporations  must  file  a  certified 
copy  of  articles  of  incorporation  in  the  office  of  the  Secretary  of  State,  accom- 
panied by  a  sworn  statement  of  an  officer  of  the  corporation  stating  the  name 
of  such  corporation  and  location  without  and  within  the  State ;  names  and 
addresses  of  its  officers,  and  name  and  address  of  agent  within  the  State ;  amount 
of  capital  stock  paid  in ;  nature  of  business  to  be  transacted  within  the  State ; 
proportion  of  capital  stock  represented  by  property  within  the  State,  etc. 
The  Secretary  of  State  must  be  appointed  agent  of  the  corporation  for  the 
acceptance  of  service  of  process.  The  certificate  must  also  state  when  the  cor- 
poration was  authorized  to  do  business  in  the  State  where  incorporated,  and 
that  it  will  comply  with  all  the  laws  of  the  State  relative  to  foreign  corporations. 
An  initial  license  tax  is  exacted  of  $25  and  $1  for  every  $1,000  of  its  capital  in 
excess  of  $25,000  employed  within  the  State.  Annual  reports  must  be  filed 
between  the  1st  day  of  January  and  the  1st  day  of  March  of  each  year.  A  fee 
of  $2  is  required  for  filing  this  report.  The  report  must  state :  (a)  Name  of  such 
corporation,  and  the  location  of  its  principal  office  or  place  of  business  without 
this  State,  and  its  place  of  business  or  principal  office  within  this  State,  if  main- 
tained. (6)  The  names  and  addresses  of  the  officers  of  such  corporation,  and 
the  name  and  address  of  the  agent  or  manager  who  may  represent  such  cor- 
poration in  this  State,  (c)  The  nature  of  the  business  transacted  in  this  State 
during  the  year  preceding,  (d)  The  amount  of  capital  stock  paid  in  money, 
property,  or  services,  (e)  The  proportion  of  the  capital  stock  represented  in 
the  State  of  Wisconsin  by  its  property  located  and  business  transacted  therein 
during  the  preceding  year.  In  determining  the  proportion  of  capital  stock 
employed  in  the  State,  the  same  shall  be  computed  by  taking  the  gross  business 
in  dollars  of  the  corporation  in  the  State,  and  the  full  value  in  dollars  of  the 
property  of  the  corporation  located  in  the  State.  The  same  shall  be  the  nu- 
merator of  a  fraction  of  which  the  denominator  shall  consist  of  the  total  gross 
business  in  dollars  of  the  corporation,  both  within  and  without  the  State, 
added  to  the  full  value  in  dollars  of  the  entire  property  of  the  corporation,  both 
within  and  without  the  State.  The  fraction  so  obtained  shall  represent  the 
proportion  of  the  capital  stock  represented  within  the  State.     The  Secretary 

605 


DIGEST   OF   INCORPORATION   ACTS.  —  WISCONSIN. 

of  State  may  demand  as  a  condition  precedent  to  the  filing  of  such  report  such 
further  figures,  information,  and  statements  as  he  may  deem  proper  in  order 
to  determine  the  accuracy  of  the  report  submitted.  The  additional  information 
so  obtained  shall  not  become  a  matter  of  record  in  the  department  of  State. 
The  corporation  shall  pay  a  fee  of  $2  for  filing  such  report.  In  case  such  report 
shows  that  such  corporation  employs  in  this  State  a  proportion  of  its  capital 
stock  in  excess  of  $25,000,  such  corporation  shall  pay  to  the  Secretary  of  State 
at  the  time  of  filing  of  said  report,  an  additional  fee  of  $1  for  each  $1,000  in  excess 
of  said  amount,  except  that  the  said  corporation  shall  receive  a  credit  for  the 
proportion  of  its  capital  stock  already  paid  for  in  excess  of  $25,000.  (/)  That 
said  corporation  as  a  condition  of  its  being  permitted  to  begin  or  continue  doing 
business  within  this  State  shall  comply  with  all  of  the  laws  of  the  State  with 
regard  to  foreign  corporations.  In  case  of  failure  to  file  such  report  in  the  time 
above  stated,  the  corporation  shall  pay  to  the  Secretary  of  State  a  penalty  of 
$25,  if  the  same  is  not  filed  before  May  1st.  In  case  such  report  is  not  filed  by 
May  1st,  or  if  said  corporation  shall  remove  or  make  application  to  remove  in 
any  District  or  Circuit  Court  of  the  United  States  any  action  or  proceeding 
commenced  against  it  by  any  citizen  of  Wisconsin,  upon  any  claim  or  cause  of 
action  arising  within  this  State,  the  license  issued  to  said  corporation  shall  be 
void,  and  the  Secretary  of  State  shall  enter  such  forfeiture  in  the  records  of  his 
department  (sec.  1770  b,  as  amended  by  Laws  of  1907,  chap.  562).  An  anti- 
trust affidavit  must  be  filed  at  the  time  application  for  permit  is  made  and  also 
with  the  annual  report  (Laws  of  1905,  chap.  506;  R.  S.,  sec.  1770,  a  and  b  as 
amended;.  Laws  of  1901,  chaps.  351,  399,  434,  sec.  1). 

State  ex  rel.  Drake  v.  Doyle,  40  Wis.  175;  Ashland  Lumber  Co.  v.  Detroit  Salt  Co.,  114 
Wis.  66;  89  N.  W.  904;  D.  G.  Co.  v.  Company,  187  U.  S.  611;  23  Sup.  Ct.  206;  C.  T.  T. 
Co.  v.  Bashford,  (Wis.)  97  N.  W.  940. 


606 


DIGEST    OF    INCORPORATION    ACTS.  —  WYOMING. 

WYOMING-. 

(The  references  below  are  to  the  Revised  Statutes  of  Wyoming,  1899,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  is  found  in  Revised  Statutes  of  Wyoming,  1899, 
sees.  3029-3079,  3255-3270.  (See  also  Laws  of  1901,  chap.  83.)  Under  it  cor- 
porations may  be  found  for  carrying  on  any  kind  of  manufacturing,  mining, 
chemical,  merchandising,  or  mechanical  business,  constructing  wagon  roads, 
railroads,  telegraph  lines,  digging  ditches,  building  flumes,  mining  tunnels, 
dealing  in  real  estate,  or  carrying  on  any  business  designed  to  aid  in  the  indus- 
trial or  productive  interests  of  the  country  (Laws  of  1907,  chap.  70). 

2.  Incorporators.  — Three  or  more.  No  residential  requirements  (R.  S., 
sec.  3029;   Laws  of  1907,  chap.  70). 

Durlacher  v.  Frazer,'8  Wy.  58;  55  Pac.  306. 

3.  Contents  of  the  Certificate  of  Incorporation.  —  Duplicate  certifi- 
cates must  be  executed,  setting  forth  (Laws  of  1907,  chap.  70) : 

a.  Name.  —  (Similarity  of  names  not  expressly  forbidden  by  statute,  but 
Secretary  of  State  will  not  allow  the  use  of  any  name  already  adopted  by  an 
existing  domestic  corporation.) 

b.  Purposes.  —  Object  for  which  the  company  is  formed.  Under  the  Con- 
stitution (Art.  X.  sec.  6)  no  corporation  can  have  power  to  transact  more  than 
one  general  line  or  department  of  business,  which  shall  be  distinctly  specified 
in  its  charter  of  incorporation. 

c.  Capital  Stock.  —  Amount  thereof  (unlimited  by  law).  If  preferred  stock 
is  to  be  issued,  this  must  be  set  forth  (R.  S.,  sec.  3042). 

d.  Duration.  —  Term  of  existence  not  to  exceed  fifty  years. 

e.  Number  of  Shares.  —  Number  and  par  value  of  shares  (par  value  may  be 
any  amount). 

/.  Directors.  —  Number  and  names  of  the  board  for  the  first  year  (Laws  of 
1907,  chap.  70). 

g.  Domiciliary  Office.  —  Name  of  the  town  and  county  in  which  the  opera- 
tions of  the  company  shall  be  carried  on.  More  than  one  locality  may  be  named 
if  desired.  If  it  is  to  transact  business  outside  of  the  State,  this  must  also  be 
set  forth  (R.  S.,  sees.  3029,  3033,  3034). 

h.  If  directors  are  to  adopt  by-laws,  provision  therefor  must  be  made  in  the 
certificate. 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  the 
common  law  powers,  the  law  provides  for  the  following  additional  powers :  To 
hold  stock  in  such  other  corporations  as  are  subsidiary  to  and  contribute  to  the 
objects  and  purposes  of  the  corporation  ;  to  issue  preferred  stock  ;  to  purchase 
mines,  manufactories,  and  other  appropriate  property  in  exchange  for  capital 
stock;  to  vote  by  proxy;  mining  companies  may  construct  and  operate  rail- 
ways, tramways,  and  wagon  roads  for  their  own  particular  purposes ;  to  trans- 
act business  outside  of  the  State;  to  levy  assessments  and  forfeit  stock  for 
non-payment  thereof  (R.  S.,  sees.  3032,  3034,  3035,  3038,  3040,  3041,  3046, 
3056,  3059,  3078,  3079;  Laws  of  1907,  chap.  70).  If  the  certificate  of  incor- 
poration so  provides,  the  power  to  adopt  by-laws  may  be  bestowed  upon  the 
directors. 

G07 


DIGEST    OF   INCORPORATION   ACTS.  —  WYOMING. 

5.  Procuring  the  Charter.  —  Duplicate  certificates  must  be  executed 
and  acknowledged  by  each  of  the  incorporators.  One  of  them  must  be  filed 
and  recorded  in  the  office  of  the  county  clerk  where  the  business  of  the  corpora- 
tion is  to  be  carried  on  and  one  in  the  office  of  the  Secretary  of  State  (sees. 
3029,  3032 ;  Laws  of  1907,  chap.  70).  All  corporations  must,  within  thirty  days 
after  the  filing  of  their  articles  of  incorporation  with  the  Secretary  of  State, 
cause  to  be  published  in  a  newspaper  of  general  circulation  a  notice  of  their  in- 
corporation. Such  notice  shall  contain  the  corporate  name  of  the  company, 
the  object  for  which  the  company  shall  be  formed,  the  amount  of  the  capital 
stock  of  the  company,  the  term  of  its  existence,  the  number  of  shares  of  which 
the  said  stock  shall  consist,  the  number  of  trustees,  and  the  names  of  those  who 
shall  manage  the  business  of  the  company  for  the  first  year,  the  name  of  the 
town  and  county  in  which  the  operation  of  said  company  shall  be  carried  on, 
the  location  (by  town,  city,  giving  the  street  number  if  any  there  be)  of  its  prin- 
cipal office  within  the  State,  and  the  name  of  the  agent  in  charge  thereof.  Such 
notice  shall  be  published  three  times  in  such  newspaper,  for  which  a  charge 
of  $5  shall  be  the  legal  rate  for  the  publication  of  the  three  notices.  The 
incorporators  must,  within  said  thirty  days,  file  in  the  office  of  the  Secretary 
of  State  the  publishers'  proof  of  such  publication  and  receipt  for  same,  and 
pay  the  Secretary  of  State  for  filing  and  indexing  such  proof  (Laws  of  1905, 
chap.  13). 

6.  Corporate  Indebtedness. — The  indebtedness  shall  at  no  time  ex- 
ceed amount  of  the  capital  stock  (R.  S.,  sees.  3049,  3053;  Laws  of  1907,  chap. 
70). 

7.  Organization  Tax.  —  Capital  stock  not  exceeding  $5,000,  $5;  over 
$5,000  and  not  exceeding  $100,000,  $10 ;  over  $100,000,  $10,  and  5  cents  ad- 
ditional for  each  $1,000  in  excess  of  $100,000  (sec.  3030). 

8.  Filing  and  Recording  Fees.  —  The  payment  of  the  organization  tax 
includes  the  filing  and  recording  fees  in  the  office  of  the  Secretary  of  State. 
The  latter's  fee  for  filing  proof  of  publication  of  charter  is  $1 ;  for  certified 
copy  of  the  articles,  15  cents  per  folio  of  one  hundred  words  for  copy  and  $1 
for  certificate  and  seal ;  for  filing  appointment  of  agent,  $2.50 ;  for  fifing  cer- 
tificate of  full-paid  stock  in  the  office  of  the  county  clerk,  the  fee  averages  $1.20. 
The  average  fee  for  filing  and  recording  certificate  of  incorporation  in  the  county 
clerk's  office  is  $2. 

9.  Commencing  Business.  —  Within  ninety  days  after  the  incorporation 
there  must  be  filed  in  the  office  of  the  Secretary  of  State  a  certificate  designating 
the  location  of  the  principal  office  in  the  State  and  the  agent  in  charge  thereof 
upon  whom  process  may  be  served.  Within  thirty  days  after  the  payment  of 
the  last  instalment  of  capital  stock  a  certificate  thereof,  sworn  to  by  the 
president  and  a  majority  of  the  directors,  must  be  recorded  in  the  office  of  the 
county  clerk  of  the  county  wherein  the  business  of  the  corporation  is  carried 
on  (Laws  of  1907,  chap.  70).  Ten  per  cent  of  the  capital  stock  must  be  paid 
in  within  one  year  (sec.  3045). 

10.  Organization  Meeting.  —  Should  be  held  within  the  State  (sees.  3035, 
3036). 

11.  Meetings  of  Stockholders  and  Directors. — The  act  does  not  au- 
thorize meetings  of  stockholders  to  be  held  without  the  State.  Directors' 
meetings  may  be  held  wherever  the  by-laws  prescribe  (R.  S.,  sees.  3035,  3036). 
Notice  of  annual  meetings  must  be  published  ten  days  prior  thereto  (Laws  of 
1907,  chap.  70). 

608 


DIGEST    OF    INCORPORATION    ACTS.  —  WYOMING. 

12.  Directors' Qualifications  and  Liabilities. —  a.  Qualifications.  —  The 
stock,  property  and  concerns  of  such  company  shall  be  managed  by  not  less 
than  three  directors,  who  shall  respectively  be  stockholders  in  such  company,  and 
who  shall  (except  the  first  year)  be  annually  elected  by  the  stockholders  at  such 
time  and  place  as  shall  be  directed  by  the  by-laws  of  the  company;  public 
notice  of  the  time  and  place  of  holding  such  election  shall  be  published  not  less 
than  ten  days  previous  thereto  in  the  newspaper  printed  nearest  to  the  place 
where  the  operations  of  said  company  shall  be  carried  on,  and  the  election  shall 
be  made  by  such  of  the  stockholders  as  shall  attend  for  that  purpose  either  in 
person  or  by  proxy,  provided  a  majority  of  the  stock  is  represented  at  said  meet- 
ing or  adjourned  meeting,  the  stockholders  so  present  to  name  the  Board  of 
Directors  to  be  elected,  each  stockholder  having  the  right  to  nominate.  The 
election  shall  be  by  ballot  on  which  each  person  voting  shall  write  the  names  of 
as  many  persons  as  are  to  be  elected  from  the  nominees.  Each  stockholder  shall 
have  the  right  to  vote  in  person  or  by  proxy  the  number  of  shares  owned  by 
him  or  her,  and  in  balloting  for  directors  he  or  she  may  cumulate  such  shares, 
and  give  one  candidate  as  many  votes  as  the  number  of  directors  multiplied 
by  the  number  of  his  or  her  shares  of  stock  shall  equal,  or  to  distribute  them  on 
the  same  principle  among  as  many  candidates  as  he  or  she  may  desire,  and  the 
person  having  the  highest  number  of  votes  in  consecutive  order  shall  be  declared 
elected  as  the  Board  of  Directors  for  that  year,  and  such  directors  shall  not  be 
elected  in  any  other  way,  and  when  vacancy  shall  happen  among  the  directors 
by  death,  resignation  or  otherwise,  it  shall  be  filled  for  the  remainder  of  the 
year  as  shall  be  provided  by  the  by-laws  of  said  company  (Laws  of  1911,  chap.  27). 
The  president  must  be  a  member  of  the  board  of  directors  (Laws  of  1907,  chap. 
70).  Executive  committee  may  be  provided  for  in  the  by-laws  (sees.  3037, 
3039,  3078).  If  the  certificate  of  incorporation  so  provides,  the  power  to 
adopt  by-laws  may  be  bestowed  upon  the  directors. 

b.  Liabilities.  —  Directors  are  personally  liable  for  payment  of  corporate 
debts  where  they  participate  in  an  illegal  declaration  of  a  dividend  or  in  the 
creation  of  corporate  indebtedness  in  excess  of  the  capital  stock  (R.  S.,  sees. 
3048,  3049).  To  avoid  this  liability  as  to  dividends  only,  a  certificate  of 
objection  must  be  filed  with  the  secretary  of  the  company,  and  with  the 
county  clerk  of  the  county  wherein  the  meeting  is  held  (Laws  of  1907, 
chap.  70).  They  are  also  liable  for  issuing  false  certificates  of  stock  (sees. 
5151,  5158).  , 

13.  Stockholders'  Liabilities.  —  Stockholders  are  only  liable  to  creditors 
for  their  unpaid  stock  subscriptions  (R.  S.,  sec.  3045). 

14.  Stock  Certificates.  —  Must  be  signed  by  such  officers  as  the  by-laws 
prescribe. 

15.  Preferred  Stock.  —  May  be  provided  for  in  the  certificate  of  incor- 
poration, or  may  be  issued  thereafter  by  the  unanimous  consent  of  all  the  stock- 
holders (R.  S.,  sees.  3041,  3042).  Dividends  thereon  cannot  exceed  seven  per 
cent.  The  holders  of  common  stock  have  the  first  right  to  subscribe  for  pre- 
ferred stock,  in  proportion  to  their  holdings  (sees.  3041-3043). 

16.  Payment  of  Capital  Stock.  —  Capital  stock  may  be  issued  in  ex- 
change for  mines,  manufactories,  and  other  necessary  property  to  the  amount 
of  the  value  thereof.  The  act  specifically  provides  that  stock  so  issued  shall 
be  taken  to  be  full  stock,  and  the  holders  thereof  shall  not  be  liable  thereon 
either  to  the  corporation  or  to  creditors  (R.  S.,  sec.  3046;  Laws  of  1907,  chap. 
70).     Within  thirty  days  after  the  payment  of  the  last  instalment  of  capital 

39  009 


DIGEST   OF   INCORPORATION   ACTS.  —  WYOMING. 

Btock  the  president  and  a  majority  of  the  trustees  must  record  in  the  office  of 
the  register  of  deeds  of  the  county  where  the  principal  business  is  carried  on,  a 
certificate  stating  the  amount  of  the  capital  so  fixed  and  paid  in  (R.  S.,  sec. 
3047;  Laws  of  1907,  chap.  70).  Ten  per  cent  of  the  capital  stock  must  be 
paid  in  within  one  year  (sec.  3045). 

17.  Books.  —  There  is  no  provision  as  to  what  books  must  be  kept  other 
than  the  stock  book  (R.  S.,  sec.  3055).  Fifteen  per  cent  of  the  stockholders 
may  demand  a  statement  of  the  company's  affairs  from  the  treasurer  (R.  S., 
sec.  3057). 

18.  Office  and  Agent.  —  The  corporation  must  maintain  an  office  within 
the  State  and  have  an  agent  in  charge  thereof  on  whom  process  against  the 
corporation  may  be  served  (Laws  of  1903,  chap.  53). 

19.  Reports.  —  Within  thirty  days  after  the  payment  of  the  last  instal- 
ment of  capital  stock  a  certificate  thereof,  sworn  to  by  the  president  and  a 
majority  of  the  directors,  must  be  recorded  in  the  office  of  the  register  of  deeds 
of  the  county  wherein  the  business  of  the  corporation  is  carried  on  (Laws  of 
1907,  chap.  70).  Whenever  stockholders  owning  15  per  cent  of  the  capital  stock 
of  any  company  shall  present  written  request  to  the  treasurer  thereof  asking 
for  a  statement  of  the  affairs  of  the  company,  the  latter  officer  must  make  such 
a  statement  under  oath  within  20  days  after  service  upon  him  of  such  request 
(sec.  3057). 

20.  Anti-Trust  Statute.  —  Anti-trust  statute  is  found  in  the  Laws  of 
1911,  chap.  62. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  — The  charter  may 
be  forfeited  for  non-user  and  misuser  of  its  corporate  franchises  and  privileges 
(R.  S.,  sec.  4214) ;  also  for  failing  to  file  certificate  of  agent  and  place  of 
business  (Laws  of  1903,  chap.  53)  or  to  publish  articles  as  required  by  law  (Laws 
of  1905,  chap.  13),  or  for  violation  of  anti-trust  statute  (Laws  of  1911,  chap. 
62). 

Any  person  who  knowingly  makes  or  publishes  in  any  way  whatever,  or 
permits  to  be  so  made  or  published,  any  book,  prospectus,  notice,  report,  state- 
ment, exhibit,  or  other  publication  of  or  concerning  the  affairs,  financial  con- 
dition, or  property  of  any  corporation,  joint  stock  association,  co-partnership, 
or  individual,  which  said  book,  prospectus,  notice,  report,  statement,  exhibit, 
or  other  publication  shall  contain  any  statement  which  is  false  or  wilfully  ex- 
aggerated, or  which  is  intended  to  give,  or  which  shall  have  tendency  to  give, 
a  less  or  greater  apparent  value  to  the  shares,  bonds,  or  property  of  said  corpora- 
tion, joint  stock  association,  co-partnership,  or  individual,  or  any  part  of  said 
shares,  bonds,  or  property,  than  said  shares,  bonds,  or  property,  or  any  part 
thereof,  shall  really  and  in  fact  possess,  shall  be  deemed  guilty  of  a  felony,  and 
upon  conviction  thereof  shall  be  imprisoned  for  not  more  than  ten  years  or 
fined  not  more  than  $10,000,  or  shall  suffer  both  said  fine  and  imprisonment 
(Laws  of  1909,  chap.  162,  sec.  1). 

Any  corporation  organized  under  the  laws  of  this  State,  or  organized  under 
the  laws  of  any  other  State,  and  holding  property  and  doing  business  in 
this  State  by  virtue  of  compliance  with  the  general  corporation  laws,  whose 
officers  or  agents  shall  be  convicted  of  violation  of  the  provisions  of  this  act, 
shall  be  deemed  to  have  forfeited  their  Charter  rights  in  this  State  and 
shall  not  be  permitted  to  do  business  within  same  (Laws  of  1909,  chap.  162, 
sec.  2). 

22.  Amendments.  —  Any  corporation  or  company  formed  prior  to  Feb- 

610 


DIGEST   OF   INCORPORATION    ACTS.  —  WYOMING. 

ruary  13,  1S90,  either  by  special  act  or  under  the  general  law,  and  now  exist- 
ing, or  any  company  which  may  be  formed  under  this  title,  may  increase  or 
diminish  its  capital  stock  by  complying  with  the  provisions  of  this  chapter  to 
any  amount  which  may  be  deemed  sufficient  and  proper  for  the  purposes  of 
the  corporation,  and  may  also  extend  its  business  to  any  other  branch  named 
in  sec.  3029,  and  may  also  change  its  corporate  name,  subject  to  the  provi- 
sions and  liabilities  of  this  chapter.  But  before  any  corporation  shall  be  enti- 
tled to  diminish  the  amount  of  its  capital  stock,  if  the  amount  of  its  debts  and 
liabilities  shall  exceed  the  amount  of  capital  to  which  it  is  proposed  to  be  re- 
duced, such  amount  of  debts  and  liabilities  shall  be  satisfied  and  reduced  so 
as  not  to  exceed  such  diminished  amount  of  capital,  and  any  existing  company 
heretofore  formed  under  the  general  law  or  any  special  act,  may  come  under 
and  avail  itself  of  the  privileges  and  provisions  of  tliis  chapter  by  complying 
with  the  following  provisions,  and  thereupon  such  company,  its  officers  and 
stockholders,  shall  be  subject  to  all  the  restrictions,  duties,  and  liabilities  of 
this  chapter  (sec.  3053). 

Whenever  the  owner  or  owmers  of  a  majority  of  the  shares  of  the  capital 
stock  of  any  company  shall  desire  to  call  a  meeting  of  stockholders,  for  the 
purpose  of  enabling  the  company  to  avail  itself  of  the  privileges  of  this  chap- 
ter, or  for  increasing  or  diminishing  the  amount  of  its  capital  stock,  or  for  ex- 
tending or  changing  its  business,  or  changing  its  name,  such  owner  or  owners 
shall  make  application  in  writing  to  the  president  or  other  chief  officer  of  the 
company  for  the  time  being,  to  call  a  meeting  of  the  stockholders  of  the  com- 
pany, which  application  shall  state  the  purpose  or  purposes  for  which  such 
meeting  is  desired.  It  shall  thereupon  be  the  duty  of  the  officer  of  the  company 
to  whom  such  application  is  made  to  publish  a  notice  to  be  signed  by  him  in  a 
newspaper  in  the  county  wherein  is  situated  the  principal  office  of  the  company 
in  this  State,  if  any  shall  be  published  therein,  at  least  four  successive  weeks, 
and  to  deposit  a  written  or  printed  copy  thereof  in  the  post-office  addressed  to 
each  stockholder  at  his  usual  place  of  residence,  at  least  fifteen  days  previous 
to  the  day  fixed  for  holding  such  meeting,  specifying  the  object  of  the  meeting, 
the  time  and  place  when  and  where  such  meeting  shall  be  held,  and  the  amount 
to  which  it  is  proposed  to  increase  or  diminish  the  capital  stock,  and  the  busi- 
ness to  which  the  company  would  be  extended  or  changed,  and  stating  one  or 
more  names  proposed  for  a  change  as  the  case  may  be,  and  a  vote  of  at  least 
two-thirds  of  all  the  shares  of  the  stock  lawfully  issued  and  outstanding. 
Thereupon  a  certificate  of  the  proceedings,  showing  a  compliance  with  the  pro- 
visions of  this  chapter,  the  amount  of  capital  actually  paid  in,  the  business  to 
which  it  is  extended  or  changed,  the  whole  amount  of  debts  and  liabilities  of 
the  Company,  and  the  amount  to  which  the  capital  stock  shall  be  increased 
or  diminished,  shall  be  made  out,  signed,  and  verified  by  the  affidavits  of  the 
chairman  and  the  secretary  of  said  stockholders'  meeting,  and  such  certificates 
shall  also  be  acknowledged  by  such  chairman  and  secretary  and  filed  and  re- 
corded as  required  by  the  first  section  of  this  chapter,  and  when  so  filed  and 
recorded,  the  capital  stock  of  such  corporation  shall  be  increased  or  diminished 
to  the  amount  specified  in  such  certificate  and  business  extended  or  changed 
or  corporate  name  changed  as  aforesaid,  and  the  company  shall  be  entitled  to 
the  provisions  and  privileges  and  be  subject  to  the  liabilities  of  this  chapter 
as  the  case  may  be  (see.  3056). 

23.  Annual  License  Tax.  —  There  is  no  annual  license  tax. 

24.  Extension  of  Corporate  Existence.  —  Corporations  may  renew  cor- 

G1L 


DIGEST   OF   INCORPORATION   ACTS. — WYOMING. 

porate  existence  for  any  number  of  years  desired  by  complying  with  the  terms 
of  the  statute  (see  Laws  of  1911,  chap.  32). 

25.  Dissolution.  —  By  a  termination  of  its  period  of  existence;  and  vol- 
untarily by  a  two-thirds  vote  of  the  stockholders,  whereupon  the  trustees 
become  trustees  for  the  creditors  and  stockholders  (R.  S.,  sees.  3255-3264 
inclusive). 

Inter.  Trust  Co.  v.  Company,  3  Wy.  803;  31  Pac.  408. 

26.  Foreign  Corporations. — Every  foreign  corporation  must,  within  thirty 
days  after  commencing  business  in  the  State,  file  in  the  office  of  the  Secretary 
of  State,  and  also  in  the  office  of  the  register  of  deeds  of  each  county  in  which 
it  transacts  business,  a  copy  of  its  charter  with  a  copy  of  the  general  law  under 
which  it  is  incorporated,  duly  authenticated  by  the  proper  authorities  of  the 
State,  wherein  it  was  created  (sees.  3265-3268,  as  amended  by  Laws  of  1901, 
chap.  83;  Laws  of  1903,  chap.  40;  Laws  of  1909,  chap.  93).  The  filing  fees  are 
the  same  as  for  domestic  corporations  of  like  capitalization.  In  addition  to 
the  foregoing  provisions  every  foreign  corporation  must  file  with  the  Secretary 
of  State  a  certificate  signed  by  its  president  or  secretary,  designating  the  location 
of  its  principal  office  in  the  State  and  the  name  of  the  agent  in  charge  thereof 
and  upon  whom  process  against  such  corporation  may  be  served.  This  certifi- 
cate must  be  filed  within  ninety  days  after  fifing  with  the  Secretary  of  the  State 
its  certified  copy  of  the  certificate  of  incorporation.  For  filing  the  certificate 
above  referred  to,  a  fee  of  $2.50  must  be  paid  to  the  Secretary  of  State  (Laws 
of  1909,  chap.  156).  No  annual  license  fee  to  pay  and  no  reports  to  make  (R.  S., 
sees.  3265-3270  inclusive).  Acceptance  of  provisions  of  State  Constitution 
must  be  filed  with  the  Secretary  of  State  (Cons.,  Art.  X.  sec.  5;  sees.  3030, 
3058,  3268).    The  filing  fee  is  $2.50. 


612 


PART  III. 
FORMS  AND   PRECEDENTS. 


SPECIFIC   OBJECT   CLAUSES. 


INDEX. 


Acquisition  of  Existing  Business 
Actuaries 

Adding  Machines 

Adjusters 

Aeroplanes 

Air  Brakes 

Air  Motors 

Aluminum  Goods 

Ammonia 

Ammunition 

Amusement  Company   .... 

Angora  Goats 

Animal  Fanciers 


Form 

1 

2 

'.  3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

Apartment  Houses 14 

Appraisers 15 

Aqueducts 16 

Architects 17 

Architectural  Woodwork 18 

Arms  and  Ammunition 19 

Art  Galleries 20 

Art  Goods 21 

Artichokes 22 

Artificial  Flowers 23 

Artists'  Materials 24 

Asbestos  Materials 25 

Assayers  and  Refiners 26 

Auctioneers 27 

Awnings,  Tents,  etc 28 

Baby  Carriages 29 

Bags  and  Trunks 30 

Bakery 31 

Ballot  Boxes 32 

Bankers 33 

Banking  and  Trust  Companies    .    .  34 

Barbers 35 

Barrel  Manufacture 36 

Bathing  Establishments 37 

Bedsteads 38 

Belting 39 

Binding  and  Tapes 40 

Blacksmiths 41 

Blank  Books 42 

Boiler  Markers  and  Dealers  ....  43 

Books 44 

Bookbinders 45 

Bottle  Manufacturers      46 

Bowling  Alleys 47 


Form 

Braiding  Machines 48 

Brandies 49 

Brass  Goods 50 

Breeders 51 

Bric-a-Brac 52 

Brick 5S 

Bridge  Builders 54 

Bronze      55 

Brooms 56 

Brushes 57 

Building  Materials 58 

Butchers 59 

Butter,  Cheese  and  Eggs 60 

Buttons    .    .    . 6L 

Cabinet  Makers ,  62" 

Canned  Goods *  63 

Car  Builders „  64 

Carbon  Engines 65 

Carpenters  and  Builders 66 

Carpets 67 

Carriages  and  Wagon  Manufacturers  68 

Cash  Registers 69 

Caterers 70 

Chewing  Gum 71 

China,  Glass  and  Earthenware      .    .  72 

Chiropodists 73 

Chocolate     and     Cocoa     Manufac- 
turers      74 

Cigars 75 

<  lloaks  and  Suits 76 

Cloth  Cleaners,  Finishers,  Refinish- 

ers,  Pressers,  Dyers  and  Dryers     .  77 

Coal  Briquette 7* 

Coal  Transportation  Company     .    .  70 

Coffee SO 

Cold  Storage 81 

Collars  and  Cuffs 82 

Collection  Agency 83 

Commission  Merchants 84 

Construction  Company 85 

Contractors  and  Builders      ....  86 

Cooperage 87 

Coppersmiths       ss 

Cornices  and  Skylights 89 

Costuiners 90 

(  'otton  Brokers 91 

Cotton  Plantations 92 

613 


INCORPORATION   AND    ORGANIZATION    OF    CORPORATIONS. 


Form 

Customhouse  Brokers 93 

Cutlery 94 

Delicatessen 95 

Dental  Supplies 96 

Designers 97 

Diamonds  and  Precious  Stones     .    .  98 

Distillers 99 

Dock  Company 100 

Dredging 101 

Dressmaking 102 

Drilling 103 

Drugs 104 

Electric  Generating  Machinery    .    .  105 

Elevators  (Grain) 106 

Elevators  (Passenger) 107 

Embroiderers       108 

Employment  Agencies 109 

Engineering  and  Dredging  Company  110 

Explosives Ill 

Express 112 

Extracting  Company 113 

Fancy  Glass 114 

Fancy  Goods  and  Notions    ....  115 

Farm  Products,  Southern     ....  116 

Financial  Agents 117 

Fireproofing 118 

Fireworks 119 

Fisheries 120 

Florists 121 

Food  Products 122 

Foreign  Commercial  Company     .    .  123 

Fruit  Company 124 

Fruits  (Tropical) 125 

Fuel  Saving  Machines 126 

Furniture 127 

Furriers 128 

Garbage  Machinery 129 

Gas 130 

Ginneries 131 

Glass 132 

Gloves  and  Mittens 133 

Gold  and  Silver  Ware 134 

Granite 135 

Graphite 136 

Grocers 137 

Hair   Goods,    Hair   Importers   and 

Hair  Dressers      138 

Harness  and  Saddlery 139 

Hat  and  Cap  Manufacturers    .    .    .  140 

Heating 141 

Hosiery  and  Underwear 142 

House  Furnishers 143 

Ice     . 144 

Inspection  of  Elevators 145 

Insurance 146 

Iron  and  Steel 147 

Jewellers 148 

Knit  Goods 149 

Laces  and  Embroideries 150 

Lamps 151 

Laundry 152 

Lead  Company 153 

614 


Form 

Leather 154 

Lighterage 155 

Lime  and  Plaster 156 

Lithographers 157 

Liveries 158 

Locomobiles 159 

Lumber  and  Nursery 160 

Machinists 161 

Magazines 162 

Manganese,  etc 163 

Manufacturers'  Agents 164 

Marble  Dealers 165 

Masons  and  Builders 166 

Mechanical  Engineers 167 

Medical  College      168 

Medical  Institute 169 

Mica 170 

Mining  (Limited  Powers)      ....  171 

Mining  (Full  Powers) 172 

Mining  Investments  .......  173 

Mining  Rights 174 

Mortgage  and  Trust 175 

Motor  Cars 176 

Motor  Companies 177 

Musical  Instruments 178 

Newsdealers 179 

Newspapers 180 

Nickel 181 

Novelties 182 

Nurseries 183 

Office  Supplies 184 

Oil  and  Petroleum      185 

Oil  and  Pipe  Line  Company     .    .    .  186 

Paints 187 

Painters 188 

Paper 189 

Paper  Manufacturers 190 

Passenger  and  Baggage  Transfer  .    .  191 

Patents 192 

Phonographs 193 

Photography 194 

Pianos  and  Musical  Instruments  .    .  195 

Perfumers 196 

Pipe  Foundry 197 

Plantation  Company 198 

Poultry 199 

Printers 200 

Produce 201 

Provision  Dealers 202 

•Publishers 203 

Quarry 204 

Railwav  Equipment 205 

Real  Estate  (City) 206 

Realty 207 

Reduction  Company 208 

Refineries 209 

Restaurants 210 

Roofers 211 

Rubber  Company 212 

Saloons 213 

Salt 214 

Sanitariums 215 

Sashes,  Doors  and  Blinds      ....  216 

Sauces  and  Pickles 217 


FORMS    AND    PRECEDENTS. 


Form 

Saw  Mills 218 

Scaling 219 

Separators 220 

Sewing  Machines 221 

Sheep 222 

Ship  Brokers  and  Chandlers     .    .    .  223 

Ship  Building       224 

Shirt  Manufacturers 225 

Silk 226 

Silversmiths  and  Plated  Ware      .    .  227 

Slate  and  Tile 228 

Slaughter  Houses 229 

Slot  Machines 230 

Soap 231 

Sporting  Goods 232 

Stationary  Engines 233 

Steamboats       234 

Steel  Lath  and  Fireproofing  Company  235 

Steel  Manufacture  Part  of  Charter  236 

Stereopticon  Machines 237 

Stevedores 238 

Stock  Brokers 239 

Storage  Batteries 240 

Storage  Warehouse 241 

Stoves,  Ranges  and  Heaters     .    .    .  242 

Sugar  Refineries 243 

Surgical  Instruments 244 

Tailors      245 

Tar  Manufacturing 246 

Tea,  Coffee  and  Cocoa 247 

Telegraph  and  Telephone  Companies  248 


Form 

Theatres 249 

Tiles 250 

Tools _'51 

Toy  Manufacturers 252 

Trading  Stamp  Company     ....  253 

Train  Control 254 

Transportation  Company     ....  255 

Tropical  Trading  Company      .    .    .  250 

Truckmen 257 

Trust  Company 258 

Turbine  Engines 259 

Typesetting  Machines 260 

Umbrellas  and  Parasols 261 

Undertakers 262 

Upholsterers 263 

Valve  Company 264 

Varnish  Remover 265 

Wall  Paper 266 

Watches,  Jewelry  and  Diamonds     .  267 

Water  Heaters 268 

Water  Works 269 

Weighing  Machines        270 

Wharf  and  Warehouse 271 

Wines  and  Liquors 272 

Woolen  and  Worsted 273 

Yarn  Mill 274 


FORM  1.— ACQUISITION   OF  EXISTING  BUSINESS. 

To  purchase,  acquire,  aud  take  over  the  business  and  property,  both  real  and 
personal,  name  aud  assets  of  every  nature  aud  description,  of  the  business  uow 
being  carried  ou  by  iu  the  City  of  ,  State  of 

FORM  2.  —  ACTUARIES. 
To  carry  on  the  business  of  life  insurance  actuaries  in  all  its  various  branches. 

FORM  3. -ADDING  MACHINES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  adding  machines 
of  all  characters  and  descriptions. 

FORM  4.  —  ADJUSTERS. 

To  carry  on  the  business  of  insurance  adjusters,  and  in  connection  therewith 
to  adjust  fire,  life,  marine  and  liability,  accident  and  fidelity  insurance  losses. 

FORM'  5.  —  AEROPLANES. 

To  manufacture,  buy,  sell,  import,  export,  aud  generally  deal  in,  exhibit,  and 
license  aeroplanes  of  every  nature  and  description,  including  biplanes,  mouoplaues, 
and  flying  machines  of  every  nature  and  description. 

FORM  6.  — AIR  BRAKES. 

To  carry  on  the  business  of  manufacturers  and  dealers  in  air  or  pneumatic  brakes 
and  braking  devices  and  appliances  of  every  description;  to  manufacture,  buy, 
sell,  export,  import,  and  generally  deal  in  air  or  pneumatic  braking  devices  and 
appliances,  car  tracks,  railway  appliances  and  supplies,  machinery  and  appliances 
of  every  description.  Also,  to  manufacture,  buy,  sell,  export,  import,  and 
generally  deal  in  compressed  air  machinery  and  parts,  and  to  acquire  by 
purchase  or  otherwise  inventions,  patents,  licenses,  and  patent  rights,   and   such 

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INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS. 

brakes,  braking  devices,  railway  machinery  and  appliances,  and  compressed  air 
machinery  and  apparatus  as  may  be  manufactured,  bought,  sold,  imported,  exported, 
and  dealt  in  by  manufacturers  and  dealers  in  a  similar  line  of  business. 

FORM  7.  — AIR  MOTORS. 

To  manufacture,  construct,  purchase,  or  otherwise  acquire,  deal  in,  sell,  hire, 
lease,  use,  repair,  operate,  and  maintain  machinery,  engines,  compressors,  or  motors, 
tools,  devices  operated  by  compressed  air  or  other  expansible  fluids,  apparatus  and 
appliances  of  any  aud  every  character. 

FORM  8. —ALUMINUM  GOODS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  aluminum  goods, 
and  such  other  goods,  wares,  and  merchandise  as  are  usually  manufactured,  bought, 
sold,  exported,  or  imported  and  dealt  in  by  manufacturers  and  dealers  in  a  similar 
line  of  business.  To  carry  on  the  business  of  mining,  milling,  concentrating,  con- 
verting, smelting,  treating,  prepariug  for  market,  manufacturing,  buying,  selling, 
and  otherwise  producing  and  dealing  in  aluminum  and  other  products. 

FORM  9. —AMMONIA. 

To  prepare,  distil,  manufacture,  buy,  sell,  and  generally  deal  in  ammonia  and 
such  other  products  as  are  usually  distilled,  manufactured,  bought,  sold,  and  dealt 
in  by  manufacturers  and  dealers  in  a  similar  line  of  business. 

FORM  10.  —  AMMUNITION. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  gunpowder, 
shot,  bullets,  cartridges,  shells,  explosives,  and  such  other  goods,  wares,  and  mer- 
chandise as  are  usually  manufactured,  bought,  sold,  exported,  imported,  and  dealt  in 
by  dealers  in  a  similar  line  of  business. 

FORM  11.  —  AMUSEMENT  COMPANY. 

To  build,  buy,  lease,  or  otherwise  acquire,  own,  operate,  and  maintain  merry- 
go-rounds,  loop-the-loops,  gravity  aud  pleasure  railways,  aerial  coasting  swings, 
Ferris  Wheels,  and  all  other  devices  of  a  like  nature  calculated  to  offer  amusement 
to  the  public  and  profit  to  the  company.  Also  to  manufacture,  locate,  buy,  lease, 
or  otherwise  acquire,  sell,  and  deal  in  scenery,  stage  appliances,  theatre  appliances, 
and  other  articles  suitable  for  use  on  stage  or  in  amusement  enterprises,  theatres,  or 
other  public  places.  Also  to  purchase,  own,  lease,  or  otherwise  acquire,  license, 
or  sell  plays,  operas,  songs,  musical  or  dramatic  manuscripts  or  copyrights  what- 
soever which  may  be  used  as  a  basis  for  the  amusement  or  entertainment  of  per- 
sons in  public  or  private  places.  To  carry  on  the  business  of,  and  to  do  any  and  all 
things  that  may  be  ordinarily  conducted  by  dramatic  and  operatic  agents  and  mana- 
gers of  amusement  enterprises  of  any  kind,  including  the  manufacture  of  appliances 
used  in  theatrical  amusement  enterprises.  Also  to  conduct  amusement  enterprises 
of  all  kinds.  To  purchase,  lease,  or  otherwise  acquire,  buy,  sell,  or  otherwise  dis- 
pose of  lands  and  buildings  for  the  erection,  operation,  and  maintenance  of  theatres, 
opera  houses,  and  amusement  enterprises  of  every  character  with  suitable  plants, 
machinery,  lighting,  and  heating  apparatus,  and  other  appliances  connected  therewith. 

FORM  12.  — ANGORA  GOATS. 

To  carry  on  in  all  its  various  branches  a  general  stock-raising  farm  and  ranch 
business ;  particularly  to  buy,  sell,  breed,  raise,  or  otherwise  deal  iu  Angora  Goats 
and  other  domestic  animals. 

FORM  13. —ANIMAL  FANCIERS. 

To  buy,  sell,  import,  export,  and  generally  deal  in  all  kinds  of  animals,  domestic 
or  wild  ;  and  particularly  to  buy,  sell,  import,  export,  and  deal  in  dogs,  cats,  goats, 
birds,  and  such  other  animals  as  are  usually  bought,  sold,  imported,  and  exported 
by  dealers  in  a  similar  line  of  business. 

616 


FORMS    .VXD    PRECEDENTS. 

FORM  14.  —  APARTMENT  HOUSES. 

To  erect,  build,  equip,  operate,  maintain,  buy,  and  sell  apartment  houses ;  to 
supply  electricity  for  lighting,  heating,  power,  signalling,  and  other  purposes.  To 
construct,  own,  and  operate  electric  telephone  exchanges. 

FORM  15.  — APPRAISERS. 

To  carry  on  the  business  of  appraisers  hi  all  its  various  branches  and  particu- 
larly, in  connection  therewith,  to  act  as  appraisers  of  real  estate,  stocks,  bonds,  and 
other  securities,  aud  to  act  as  appraisers  of  goods,  wares,  and  merchandise  of  every 
class  and  description. 

FORM   16.  —  AQUEDUCTS. 

To  enter  into  contracts  for  the  construction,  maintenance,  and  operation  of 
aqueducts,  pipe  lines,  conduits,  and  ditches  for  the  purpose  of  providing  water 
for  drinking,  fire,  urban,  horticultural,  and  agricultural  purposes. 

FORM  17.  —  ARCHITECTS. 

To  conduct,  manage,  aud  carry  on  the  business  of  architects  and  engineers  in 
all  or  any  of  their  respective  branches,  and  also  the  development  of  real  estate 
situate  in  the  State  of  or  elsewhere ;  to  make  contracts  for  the  preparation 

of  phms  or  other  drawings  and  specifications  of  buildings  or  parts  of  buildings  of 
any  kind  and  description;  to  superintend  the  construction  thereof  and  to  do  any 
and  all  acts  in  the  line  of  the  businesses  of  architects  and  engineers  which  it  may 
deem  necessary,  profitable,  or  desirable  for  the  promotion  of  its  business.  To  ac- 
quire by  purchase  or  otherwise  own,  hold,  buy,  sell,  convey,  lease,  mortgage,  or  en- 
cumber real  estate  includiug  quarry  lands  or  other  property,  personal  or  mixed. 
To  survey,  subdivide,  plat,  improve,  and  develop  lauds  for  purposes  of  sale  or  other- 
wise, and  to  do  and  perform  all  things  needful  and  lawful  for  the  development  and 
improvement  of  the  same  for  residence,  trade,  or  business.  To  acquire  to  the 
same  extent  as  natural  persons  and  without  limit  as  to  amount,  by  purchase,  lease, 
exchange,  hire,  or  otherwise,  lands,  improved  or  unimproved,  tenements,  heredita- 
ments, chattels,  real  or  personal,  or  any  interest  therein ;  to  erect  and  construct 
houses,  buildings,  and  works  of  every  description  on  any  lauds  of  the  company  or 
upon  any  other  lands  ;  to  rebuild,  enlarge,  alter,  or  improve  existing  houses,  build- 
ings, or  works  thereon ;  to  subdivide,  improve,  and  develop  lands  for  purposes  of 
sale  or  otherwise ;  to  convert  and  appropriate  any  such  land  into  and  for  roads, 
streets,  aud  other  conveniences,  and  to  do  aud  perform  all  things  needful  and  lawful 
for  the  development  and  improvement  of  the  same,  and  generally  to  deal  with  and 
improve  the  property  of  the  company  and  of  other  parties  ;  to  own,  hold,  aud  main- 
tain any  property  acquired  by  the  company;  to  sell,  convey,  lease,  release,  let,  ex- 
change, mortgage,  or  otherwise  encumber  or  dispose  of  lauds,  houses,  buildings, 
hereditaments,  appurtenances,  chattels,  and  other  property  of  the  company ;  to  equip, 
furnish,  conduct,  operate,  manage,  lease,  and  maintain  hotels,  apartment  houses, 
boarding  houses,  dwelling  houses,  sanitariums,  warehouses,  or  any  kind  of  building 
for  dwelling,  amusement,  recreation,  charitable,  or  religious  purposes;  to  undertake 
or  direct  the  management  and  sale  of  the  property  of  the  company,  real  and  per- 
sonal; to  sell,  assign,  release,  hold,  or  satisfy  mortgages  which  may  become  the 
property  of  the  company;  to  loan  on  bond  or  mortgage  or  otherwise,  or  to  ad- 
vance money  to,  and  to  enter  into  contracts  and  arrangements  of  all  kinds  with  con- 
tractors, laborers,  skilled  or  otherwise,  builders,  property  owners,  and  others." 

FORM   18.- ARCHITECTURAL  WOODWORK. 

To  design,  construct,  manufacture,  and  install  in  houses,  buildings,  and  struc- 
tures of  all  kinds  woodwork  of  every  class  and  description. 

FORM  19.  — ARMS  AND  AMMUNITION. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  guns,  revolv- 
ers, knives,  powder,  shot,  shells,  aud  explosives  of  every  class  and  description. 

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INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

FORM  20.  —  ART  GALLERIES. 

To  maintain  and  operate  art  galleries  for  the  display  therein  of  paintings,  sculp- 
tures, and  other  works  of  art. 

FORM  21.— ART  GOODS. 

.  To  buy,  sell,  export,  import,  and  generally  deal  in  paintings,  sculpture,  can- 
vases, paints,  and  artists'  materials  of  every  class  and  description. 

FORM  22.  —  ARTICHOKES. 

To  plant,  raise,  and  cultivate,  buy,  sell,  export,  import,  and  generally  deal  in  all 
varieties  of  artichokes. 

FORM  23.— ARTIFICIAL  FLOWERS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  artificial  flowers 
of  every  class  and  description. 

FORM  24.— ARTISTS*   MATERIALS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  canvases, 
easels,  brushes,  paints,  oils,  pencils,  crayons,  and  artists'  materials  of  every  class 
and  description. 

FORM  25.  —  ASBESTOS  MATERIALS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  asbestos  and  all 
the  materials  that  enter  into  the  manufacture  thereof. 

FORM  26.  — ASSAYERS  AND   REFINERS. 

To  carry  on  the  business  in  all  its  various  branches  of  assayers  and  refiners  of 
gold,  silver,  copper,  lead,  minerals,  and  metals  of  every  class  and  description. 

FORM  27.  —  AUCTIONEERS. 

To  carry  on  the  business  of  general  auctioneers  of  real  estate,  goods,  wares,  and 
merchandise  of  every  class  and  description. 

FORM  28.  — AWNING,   TENTS,   ETC. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  awnings,  tents, 
tennis  nets,  hammocks,  and  articles  of  the  same  general  description. 

FORM  29.  — BABY  CARRIAGES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  baby  carriages, 
perambulators,  go-carts,  baby-jumpers,  carriage  cushions,  upholstery,  and  carriage 
fittings  of  every  class  and  description. 

FORM  30.— BAGS  AND  TRUNKS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  travelling  boxes, 
suitcases,  telescopes,  commercial  travellers'  bags,  steamer  trunks,  and  travellers' 
necessities  of  every  class  and  description. 

FORM  31.  —  BAKERY. 

To  carry  on  the  business  of  bakers  in  all  its  various  branches  in  the  city  of 
and  vicinity;  to  manufacture,  make,  purchase,  sell,  export,  and  import 
bread,  crackers,  biscuits,  cake,  sweetmeats,  and  confectionery  of  all  kinds ;  also  to 
manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  baking  powders, 
yeasts,  cream*  of  tartar,  and  all  other  articles  which  may  be  necessary  or  conven- 
iently used  in  connection  with  the  aforementioned  business  or  businesses. 

FORM  32.  — BALLOT  BOXES. 

To  manufacture,  buy,  sell,  lease,  export,  import,  and  generally  deal  in  articles 
commonly  known  as  voting  or  ballot  boxes,  and  particularly  to  purchase  or  other- 

618 


FORMS    AND    PRECEDENTS. 

wise  acquire  letters  patent  of  the  United  States  or  of  foreign  countries  governing 
the  manufacture  of  such  voting  or  ballot  boxes,  together  with  all  extension  and 
renewals  of  the  same. 

FORM  33.  — BANKERS. 

To  carry  on  the  business  of  private  bankers  and  in  connection  therewith  to  dis- 
count bills,"  notes,  and  other  evidences  of  indebtedness,  receive  and  pay  out  deposits, 
with  or  without  interest,  receive  on  special  deposit  moneys  or  bullion,  to  buy 
and  sell  foreign  and  domestic  exchange,  gold  and  silver  bullion  and  foreign  coins ; 
to  lend  money  on  percentage,  security,  or  bond ;  to  buy  and  sell  stocks,  bonds,  and 
mortgages  of  every  class  and  description. 

FORM  34.  — BANKING  AND  TRUST  COMPANIES. 

To  carry  on  a  banking  and  trust  company  business  and  in  connection  therewith 
to  discount"  bills,  notes,  and  other  evidences  of  debt,  receive  and  pay  out  deposits 
with  or  without  interest,  receive  on  special  deposit  money  or  bullion  or  foreign  coin, 
stocks,  bonds,  or  other  securities ;  to  buy  and  sell  foreign  and  domestic  exchange, 
gold  and  silver  bullion,  foreign  coins,  bonds,  stocks,  bills  of  exchange,  notes,  and 
other  negotiable  paper ;  to  lend  money  on  percentage,  security,  or  bonds,  pledges  of 
bonds,  or  other  negotiable  securities  •  to  take  and  receive  security,  by  mortgage  or 
otherwise  npon  property,  real  and  personal;  to  invest  money  for  individuals  or 
corporations,  and  to  act  as  Trustee  for  any  purpose ;  to  do  any  business  and 
exercise  any  powers  incident  to  the  business  of  trust  companies  doing  a  banking 
business. 

FORM  35.  — BARBERS. 

To  operate,  maintain,  and  carry  on  business  as  barbers,  and  in  connection  there- 
with to  shave,  shampoo,  and  massage  customers  and  in  connection  therewith  to  carry 
on  a  manicuring  business.  Also  to  maintain  bootblacking  and  cigar  stands  and  to 
operate  and  maintain  bathrooms. 

FORM  36.  — BARREL  MANUFACTURE. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  barrels  and 
barrel  heads,  hogsheads",  and  boxes  made  from  wood  or  metal. 

FORM  37.  — BATHING  ESTABLISHMENTS. 

To  erect,  maintain,  and  operate  bathing  establishments  for  the  purpose  of  giving 
hot  and  cold  baths,  Turkish  baths,  vapor  and  shower  baths,  swimming  pools  and 
medicinal  baths  of  all  classes  and  descriptions.  Also  to  operate  in  connection  there- 
with massage  parlors  and  sleeping  rooms. 

FORM  38.  — BEDSTEADS. 

To  manufacture,  buy,  sell,  export,  import,  aud  generally  deal  in  bedsteads  of 
every  class  and  description.  Also  to  manufacture,  buy,  sell,  export,  import,  and 
generally  deal  in  springs,  mattresses,  rollers,  slats,  and  all  other  appurtcuauces 
pertaining  to  or  connected  with  the  manufacture  of  beds. 

FORM  39.  — BELTING. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  all  kinds  of 
belting  for  use  in  connection  with  machinery  of  all  classes  and  descriptions. 

FORM  40.  — BINDING  AND   TAPES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  all  kinds  of 
braids,  bindings,  and  tapes  of  all  kiuds  and  descriptions. 

FORM  41. —BLACKSMITHS. 

To  carry  on  the  business  of  blacksmiths,  including  the  shoeing  of  horses  and 
mules;  to  manufacture  torse  shoes,  and  to  carry  on  a  general  carriage  repair, 
wagon  and  farm  implement  repair  business. 

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INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

FORM  42.— BLANK  BOOKS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  blank  books  of 
every  class  and  description,  including  books  of  account,  check  books,  ledgers, 
journals,  blotters,  and  office  sundries  of  every  class  and  description. 

FORM  43.  — BOILER  MAKERS  AND  DEALERS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  boilers,  furnaces, 
steam  and  hot  water  fixtures  and  appurtenances  of  every  class  and  description. 

FORM  44.  — BOOKS. 

To  carry  on  the  business  of  booksellers,  stationers,  bookbinders,  and  engravers, 
lithographers,  publishers,  and  manufacturers  of  inks  and  all  articles  and  things  of 
the  same  character  as  the  foregoing  or  connected  therewith. 

FORM  45.— BOOKBINDERS. 

To  carry  on  in  all  its  various  branches  the  business  of  binding  books,  magazines, 
and  printed  and  written  matter  of  every  class  and  description. 

FORM  46.  — BOTTLE  MANUFACTURERS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  bottles,  glasses, 
and  glass  ware  of  every  class  and  description. 

FORM  47.  — BOWLING  ALLEYS. 

To  operate  and  maintain  bowling  alleys,  billiard  rooms,  and  pool  rooms. 

FORM  48.  — BRAIDING  MACHINES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  braiding  machines 
for  the  manufacture  of  either  whip  lash  or  basket  braid.  Also  to  manufacture,  buy, 
sell,  import,  export,  and  generally  deal  in  shoe  strings,  corset  strings,  fish  lines, 
gas  or  rubber  hose,  insulators  for  electric  or  other  kinds  of  wiring,  and  braided 
articles  of  every  nature  and  description. 

FORM  49.  — BRANDIES. 

To  carry  on  the  business  of  manufacturers,  distillers,  and  dealers  in  brandies, 
wines,  and  liquors  of  every  class  and  description.  To  manufacture,  buy,  sell,  export, 
import,  store,  warehouse,  and  generally  deal  in  brandies,  wines,  whiskey,  malt  liquors, 
gin,  spirits,  and  beverages  of  all  kinds,  and  their  products  and  by-products  of  every 
nature  whatsoever.  To  carry  on  the  general  business  of  distilling  and  rectifying 
brandies,  wines,  whiskey,  and  liquor,  and  the  blending  of  gins  and  whiskeys  of  all 
classes  and  description,  and  generally  deal  in  grain,  sugar,  molasses,  and  all  liquors 
used  in  connection  with  the  operation  of  a  distillery.  To  manufacture,  buy,  sell, 
import,  and  export  machinery  for  the  manufacture,  distillation,  and  rectification  of 
liquors  of  every  class  and  description.  To  build,  operate,  and  maintain  warehouses, 
bonded  or  otherwise,  and  to  do  a  general  warehouse  business.  To  issue,  register, 
and  certify  warehouse  receipts.     To  manufacture,  buy,  sell,  and  deal  in  ice. 

FORM  50.  — BRASS   GOODS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  all  kinds  of 
goods  made  from  brass,  copper,  iron,  or  other  metals. 

FORM  51.— BREEDERS. 

To  carry  on  the  business  of  breeding,  raising,  training,  buying,  selling,  import- 
ing, and  exporting  horses.  To  conduct  any  and  all  manner  of  business  permitted 
at  fair  and  race  courses,  and  in  general  to  do  any  and  all  things  in  accordance 
with  law  that  may  directly  or  indirectly  be  connected  with  the  raising  of  horses. 
To  keep  careful  lists  of  the  most  celebrated  horses  of  all  noted  breeds,  and  their 

620 


FORMS    AND    PRECEDENTS. 

pedigree  and  distinguishing  characteristics,  and  to  publish  from  time  to  time  every 
kind  of  information  on  such  subjects  of  interest  to  horsemen.  To  buy,  sell,  raise, 
and  handle  live  stock  of  all  kinds  and  descriptions. 

FORM  52.  —  BRIC-A-BRAC. 
To  buy,  sell,  export,  import,  and   generally  deal  in  bric-a-bracs,  curios,  and 
antiques  of  every  class  and  description. 

FORM  53.  —  BRICK. 

To  manufacture  for  purposes  of  sale  pressed  brick,  building  brick,  terra  cotta, 
tile,  roofing,  ritrilied,  and  other  building  materials  which  can  be  made  from  clay. 

FORM  54.— BRIDGE  BUILDERS. 

To  manufacture,  sell,  export,  and  generally  deal  in  bridges  and  structural  work. 
To  manufacture,  buy,  sell,  export,  and  import  steel,  iron,  tin,  aluminum,  and  other 
metals.  Also  to  manufacture,  buy,  sell,  export,  and  import  engines,  boilers,  ma- 
chinery, plates,  apparatus,  tools,  appliances,  and  materials  useful  or  convenient  for 
carrving  on  any  of  the  several  lines  of  business  heretofore  set  forth. 

FORM  55.  —  BRONZE. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  bronzes  of  all 
kinds,  classes,  and  descriptions.  Also  to  manufacture,  prepare,  buy,  sell,  export, 
import,  and  generally  d^al  in  silicon,  aluminum,  and  all  kinds  of  metals  or  metallic 
compounds  suitable  and  convenient  to  be  used  or  commonly  used  by  dealers  in 
bronzes. 

FORM  56.— BROOMS. 

To  carry  on  the  business  of  manufacturers  and  dealers  in  brooms  of  all  classes 
and  descriptions;  to  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in 
brooms,  broom  corn,  broom  hangers,  binding  twine,  binding  wire,  and  all  other 
articles  suitable  for  use  in  such  manufacture;  also  to  deal  in  such  other  goods, 
wares,  and  merchandise  as  are  usually  manufactured  or  dealt  in  by  manufacturers 
and  dealers  in  a  similar  line  of  business. 

FORM  57.  — BRUSHES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  hair  brushes, 
scrubbing  brushes,  nail  brushes,  electric  brushes,  brooms  and  dusters  of  all  classes 
and  descriptions.  Also  to  manufacture,  buy,  sell,  export,  import,  and  generally  deal 
in  such  other  goods,  wares,  and  merchandise  as  are  commonly  manufactured  and 
dealt  in  by  those  engaged  in  a  similar  line  of  business. 

FORM  58.  —  BUILDING  MATERIALS. 

To  manufacture,  export,  import,  buy,  sell,  and  generally  deal  in  building 
materials  of  every  class  and  description. 

FORM  59  —  BUTCHERS. 

To  carry  on  the  business  of  wholesale  and  retail  dealers  in  meat  and  meat 

{iroducts,  and  to  operate  in  connection  therewith  slaughter-houses,  stock  yards,  and 
ive-stock  farms  and  ranches;  also  to  operate  and  maintain  cold-storage  ware- 
houses, plants,  and  all  buildings  necessary  or  expedient  for  carrying  on  the  aforesaid 

uUSlIlGSS 

FORM  60.  —  BUTTER,  CHEESE,  AND   EGGS. 
To  buy,  sell,  export,  import,  and  generally  deal  in  butter,  milk,  cheese,  eggs, 
dairy  and  farm  products  of  every  class  and  description. 

FORM  61.  —  BUTTONS. 

To  carry  on  the  business  of  manufacturers  and  dealers  in  buttons  of  all  kinds, 
classes,  and  descriptions;  to  manufacture,  buy,  sell,  import,  export,  and  generally 

621 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

deal  in  buttons  and  all  products  necessary  or  useful  in  the  business  of  button  manu- 
facturing. To  purchase  or  otherwise  acquire  letters  patent  of  the  United  States  or 
of  foreign  countries,  together  with  all  extensions  or  renewals  of  the  same,  covering 
the  manufacture  of  buttons  and  button  machinery ;  also  to  buy,  manufacture, 
and  keep  in  stock  for  purposes  of  sale  such  goods,  wares,  and  merchandise  as  are 
usually  manufactured  by  and  dealt  in  by  manufacturers  and  dealers  in  a  similar  line 
of  business. 

FORM  62.  —  CABINET  MAKERS. 

To  carry  on  the  business  of  furniture  dealers  and  makers  of  cabinet  goods  of 
every  class  and  description. 

FORM  63.  —  CANNED  GOODS. 

To  raise,  cultivate,  can,  buy,  sell,  export,  import,  and  generally  deal  in  fruits  and 
vegetables  of  every  class  and  description.  Also  to  can  fish,  poultry,  and  meats  of 
every  kind. 

FORM  64.  —  CAR  BUILDERS. 

To  carry  on  the  business  of  manufacturing,  buying,  leasing,  or  otherwise  acquir- 
ing, equipping,  constructing,  altering,  repairing,  maintaining,  operating,  and  selling 
steam,  electric,  or  cable  cars,  and  to  manufacture,  buy,  lease,  or  otherwise  acquire, 
construct,  alter,  repair,  and  sell  ail  apparatus,  appliances,  devices,  machinery,  and 
materials  for  use  in  operating,  constructing,  or  maintaining  steam,  electric,  or  cable 
cars,  or  used  in  constructing,  operating,  or  maintaining  any  line  of  railway,  steam,  or 
electric  lines  or  otherwise,  or  the  stations,  terminals,  or  equipment  thereof. 

FORM  65.  — CARBON  ENGINES. 

To  manufacture,  buy,  sell,  import,  export,  and  deal  in  carbon  engines  and  all 
kinds  of  machinery,  tools,  and  implements  incidental  to  the  development  of  new  and 
useful  mechanical  devices,  and  to  obtain  letters  patent  thereupon ;  to  acquire 
letters  patent,  domestic  or  foreign,  for  the  right  to  construct  machines  upon  which 
patents  have  already  been  issued  and  applied  for. 

FORM  66. —CARPENTERS  AND  BUILDERS. 

To  erect,  construct,  and  repair  houses,  buildings,  and  structures  of  all  classes 
and  descriptions.     Also  to  carry  on  the  trade  of  carpenters  and  builders. 

FORM  67.— CARPETS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  carpets,  rugs, 
oil  cloths,  mattings,  linoleums,  and  mats  of  all  kinds  and  descriptions. 

FORM  68.  —  CARRIAGES  AND  WAGON  MANUFACTURERS. 

To  build,  buy,  sell,  export,  import,  and  generally  deal  in  carriages,  carts,  drays, 
wagons,  and  vehicles  of  every  class  and  description. 

FORM  69.  —  CASH  REGISTERS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  cash  registers, 
check,  slip,  and  automatic  printing  registers,  autographic  registers,  weighing,  adding, 
calculating,  and  registering  machines  of  all  kinds,  classes,  and  descriptions. 

FORM  70.  —  CATERERS. 

To  carry  on  the  business  of  caterers  and  in  connection  therewith  to  operate 
delicatessen  shops,  restaurants,  tea  rooms,  coffee  rooms,  and  bakeries. 

FORM  71.  —  CHEWING  GUM. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  chewing  gums 
of  every  class  and  description. 

622 


FORMS    AND    PRECEDENTS. 

FORM  72.  —  CHINA,  GLASS  AND  EARTHENWARE. 

To  manufacture,  buy,  sell,  export,  import,  aud  generally  deal  in  china,  porcelain, 
glass,  terra  cotta,  and  earthenware  of  all  classes  aud  descriptions. 

FORM  73.  —  CHIROPODISTS. 

To  carry  on  the  business  of  chiropodists  and  manicurists,  and  in  connection 
therewith  to  manufacture,  export,  import,  and  generally  deal  in  chiropodists'  and 
manicurists'  instruments  of  all  kinds. 

FORM  74.  — CHOCOLATE  AND  COCOA  MANUFACTURERS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  chocolates  and 
cocoas. 

FORM  75.  —  CIGARS. 

To  carry  on  the  business  of  manufacturers  and  dealers  in  cigars  and  tobacco. 
To  manufacture,  buy,  sell,  exchange,  import,  export,  aud  generally  deal  in  leaf 
tobacco,  chewing  tobacco,  cigars,  cigarettes,  and  cheroots ;  to  plant,  grow,  and  treat 
leaf  tobacco,  and  to  manufacture,  sell,  lease,  or  otherwise  acquire  machinery,  tools, 
implements,  and  appliances  incidental  and  necessary  in  the  cultivation,  care,  and 
treatment  of  leaf  tobacco,  or  in  the  manufacture  of  cheroots,  chewing  and  smoking 
tobacco,  cigars,  and  cigarettes.  To  build,  operate,  maintain,  lease,  or  otherwise 
acquire  factories,  warehouses,  and  buildings  suitable  for  the  caring,  storing,  prep- 
aration, and  manufacture  of  tobacco  and  its  several  products. 

FORM  76.  — CLOAKS  AND  SUITS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  cloaks  and  suits 
of  every  class  and  description.  To  carry  on  generally  the  business  of  manufacturers 
of  cloaks  and  suits. 

FORM  77.  — CLOTH  CLEANERS,   FINISHERS,   REFINISHERS, 
PRESSERS,   DYERS,   AND   DRYERS. 

To  carry  on  the  business  of  cleaners,  finishers,  refinishers,  pressers,  dyers,  and 
dryers  of  cloths  and  clothing  of  every  kind  and  description. 

FORM  78.  — COAL  BRIQUETTE. 

To  manufacture,  buy,  sell,  deal  in,  and  deal  with  coal  briquettes;  to  mine,  buy, 
sell,  deal  in,  and  deal  with  coal  and  other  minerals,  and  to  manufacture  and  sell 
coke  and  its  bv-products;  to  acquire  by  purchase,  lease,  or  otherwise  coal  mines, 
coal  lands,  coal  properties,  minerals  and  mining  rights;  to  manufacture,  purchase, 
or  otherwise  acquire,  hold,  own,  mortgage,  lease,  assign,  transfer,  invest,  deal  in 
and  deal  with  and  trade  in  goods,  wares,  merchandise,  and  property  of  every  class 
and  description. 

FORM  79.  -  COAL  &  TRANSPORTATION  COMPANY. 

To  mine,  buy,  sell,  import,  export,  and  generally  deal  in  anthracite,  bituminous, 
and  semi-bituminous  coal;  to  act  as  agent  and  broker  for  coal  and  to  make  con- 
tracts with  coal  companies  with  reference  to  handling  and  selling  their  coal  and  on 
such  terms  as  may  be  agreed  upon.  To  buy,  lease,  build,  and  own  sales-rooms, 
storerooms,  storehou  aouses,  docks,  piers,  and  real  estate  necessary  to  the 

carrying  on  of  such  business.  To  carry  on  the  business  of  engaging,  receiving, 
transporting,  and  delivering  coal  and  merchandise  of  all  kinds  upon  freight  or  lor 
hire  between  any  port  or  ports  of  the  Tinted  Slates  and  au\  foreign  port  or  ports; 
or  between   any  foreign    port    or   ports  and  any  port  or  ports   of  the    United    SI 

to  engage  in  the  business  of  chartering  vessels  therefor  and  operate  vessels  in  such 

623 


INCORPORATION   AND    ORGANIZATION   OF    CORPORATIONS. 

service.  To  act  as  agent  for  vessels  employed  in  such  service ;  to  contract  and 
arrange  for  the  transportation  of  cargo  to  and  from  any  of  such  ports  by  rail, 
boat  or  otherwise  from  or  to  any  inland  or  coastwise  place  or  places.  To  build, 
buv,  sell,  charter,  equip,  operate,  and  own  steamships,  steamboats,  sailing  ships, 
coal  barges,  canal  boats,  and  other  property  to  be  used  in  such  business,  trade, 
commerce,  and  navigation. 

FORM  80.  —  COFFEE. 

To  raise,  cultivate,  produce,  export,  import,  treat,  cure,  ripen,  polish,  burn, 
roast,  brown,  buy,  sell,  aud  generally  deal  in  coffees  of  every  grade,  character,  and 
description.  To  acquire  by  purchase,  lease,  or  otherwise  lands  and  properties  suit- 
able for  planting  and  raising  coffee  plants.  To  buy,  sell,  and  generally  deal  in 
such  other  goods,  wares,  and  merchandise  as  are  usually  dealt  in  by  those  engaged 
in  a  similar  line  of  business. 

FORM  81. —  COLD  STORAGE. 

To  preserve  in  cold  storage  and  generally  deal  in  all  kinds  of  food  products  of 
a  perishable  nature  or  otherwise.  To  manufacture,  buy,  sell,  and  deal  in  ice.  To 
buy,  sell,  store,  import,  and  export  fruit,  fish,  butter,  milk,  and  all  kinds  of  food 
products,  whether  animal  or  vegetable.  To  operate  and  maintain  stores,  buildings, 
warehouses,  depots,  and  wharves  for  the  carrying  on  of  any  of  the  aforesaid  lines  of 
business. 

FORM  82.  —  COLLARS  AND  CUFFS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  collars,  cuffs, 
shirts,  and  other  articles  of- wearing  apparel. 

FORM  83.  — COLLECTION  AGENCY. 

To  maintain  and  conduct  a  general  collection  agency  for  the  collection  of  debts, 
and  act  as  agent  for  creditors  and  other  claimants  in  the  collection  and  settlement  of 
debts  and  claims. 

FORM  84.  —  COMMISSION  MERCHANTS. 

To  engage  in  the  business  of  selling  goods,  wares,  and  merchandise  as  commis- 
sion merchants,  and  as  general  selling  agents ;  particularly  to  act  as  agents  or 
brokers  for  the  selling  upon  commission  or  otherwise  of  the  following  classes  of 
property,  to  wit :  (here  insert  description  of  property  to  be  sold.) 

FORM  85.  —  CONSTRUCTION  COMPANY. 

To  manufacture,  buy,  sell,  or  otherwise  acquire,  import,  export,  and  generally 
deal  in  sheet  iron,  copper,  tin,  galvanized  iron,  cornices,  skylights,  smokestacks, 
water,  gas,  and  electric  works,  wharves,  roads,  reservoirs,  canals,  factories,  ware- 
houses, and  mills ;  to  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in 
iron,  steel,  manganese,  copper,  and  other  materials  or  alloy  thereof,  coke,  gas,  coal, 
lumber,  and  building  materials  or  any  article  consisting  or  partly  consisting  of  iron, 
steel,  copper,  and  other  materials,  and  any  products  thereof. 

FORM  86.  —  CONTRACTORS  AND  BUILDERS. 

To  construct,  erect,  equip,  repair,  and  improve  houses,  buildings,  public  or  pri- 
vate roads,  alleys,  tramways,  railways,  reservoirs,  irrigation  ditches,  wharves, 
sewers,  tunnels,   conduits,  and  subways. 

FORM  87.  —  COOPERAGE. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  barrels,  kegs, 
>casks,  staves,  boxes,  and  cisterns. 

(624 


FORMS    AND    PRECEDENTS. 

FORM  88.  —  COPPERSMITHS. 

To  carry  on  the  business  of  coppersmiths,  brass  founders,  aud  manufacturers  of 
all  articles  made  from  copper,  brass,  iron,  tin,  or  aluminum. 

FORM  89.  — CORNICES  AND   SKYLIGHTS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  cornices,  ■wood- 
work, skylights,  and  building  materials  and  house  furnishings  of  every  class  and 
description. 

FORM  90.  —  COSTUMERS. 

To  buy  and  sell  costumes,  masks,  habits,  armor,  and  theatrical  goods  of  every 
class  and  description.  Also  to  carry  on  the  general  business  of  costumers  and.  deal- 
ers in  theatrical  goods  of  every  kind  and  description. 

FORM  91.  — COTTON  BROKERS. 

To  carry  on  the  business  of  buyiug,  selling,  and  otherwise  dealing  in  cotton,  either 
as  principals  or  on  commission. 

FORM  92. —  COTTON  PLANTATIONS,   ETC. 

To  manufacture  from  the  cotton  plant  or  other  substances  pulp,  paper,  chemi- 
cals, and  other  material,  and  all  or  any  articles  consisting  or  partly  consisting  of 
pulp,  paper,  chemicals,  or  other  materials,  and  all  or  any  products  thereof.  To 
acquire,  own,  lease,  occupy,  use,  improve,  cultivate,  or  develop  any  cotton  planta- 
tions, wood  lands,  lands  containing  coal,  iron,  or  other  ores,  or  other  lands  for  any 
purpose  of  the  company.  To  gather,  remove,  mine,  or  otherwise  extract  cotton 
plants,  timber,  or  other  vegetation,  coal,  ores,  or  other  minerals  from  any  lands 
owned,  acquired,  leased,  or  occupied  by  the  company  or  from  any  other  lands.  To 
buy  and  sell  or  otherwise  to  deal  or  to  traffic  in  raw  cotton,  cotton  plant,  pulp, 
paper  or  chemicals,  wood,  lumber,  coal,  iron,  ores  and  other  materials,  and  any 
of  the  products  thereof  and  any  articles  consisting  or  partly  consisting  thereof.  To 
purchase,  hire,  make,  construct,  or  otherwise  acquire,  provide,  maintain,  equip,  alter, 
erect,  improve,  repair,  manage,  and  work  any  private  roads,  private  telegraph  and 
telephone  lines,  bridges,  piers,  wharves,  wells,  reservoirs,  flumes,  watercourses,  water 
works,  aqueducts,  shafts,  tunnels,  furnaces,  coke  ovens,  crushing  works,  gas  works, 
electric  light  and  power  plants,  compressed-air  plants,  chemical  works  of  all  kinds, 
concentrators,  smelters,  smelting  plants  and  refineries,  matting  plants,  warehouses, 
workshops,  factories,  dwelling  houses,  stores,  hotels,  or  other  buildings,  engines, 
machinery,  implements  and  other  works,  conveniences  and  properties  of  any  de- 
scription iu  connection  with  or  which  may  seem  directly  or  indirectly  conducive  to 
any  of  the  objects  of  the  company,  and  to  contribute  to,  subsidize,  or  otherwise  aid 
or'take  part  in  any  such  operations.  To  charter,  hire,  build,  or  otherwise  acquire 
and  maintain  steamships  and  other  vessels  of  any  description,  and  private  steam, 
compressed  air,  gravity,  or  electric  railroads  and  tramways,  and  to  employ  the 
same  in  the  transportation  of  the  company's  raw  material,  products,  and  supplies. 
To  buy,  sell,  manufacture,  and  deal  in  machinery,  implements,  conveniences,  pre 
visions,  aud  things  capable  of  being  used  in  connection  with  manufacturing  opera- 
tions or  any  of  the  business  of  the  company  or  required  by  workmen  and  others 
employed  by  the  company.  To  buy,  sell,  hold,  manage,  lease,  turn  to  account,  and 
otherwise  acquire  land  and  freehold  estates  and  interests  therein ;  and  to  lay  off 
realty  into  lots  and  blocks,  street  alleys  and  parks,  and  to  dedicate  such  portion 
thereof  to  the  public  as  the  company  may  think  proper. 

FORM  93.  — CUSTOM  HOUSE  BROKERAGE. 

To  carry  on  the   business  of  custom  house  brokers  in  the  city  of  and 

elsewhere,  and  in  connection  therewith  and  as  auxiliary  thereto  to  act  as  marine 
and  fire  insurance  brokers. 

FORM  94. —  CUTLERY. 

To  manufacture,  buy,  sell,  lease,  export,  import,  and  generally  deal  iu  cutlery, 
razors,  tools,  and  machinery  of  all  kinds,  classes,  and  descriptions. 

625 


INCORPORATION   AND    ORGANIZATION    OF    CORPORATIONS. 

FORM  95.  —  DELICATESSEN. 

To  carry  on  a  general  restaurant  and  delicatessen  business.  Also  in  connection 
therewith  to  operate  bakeries,  ice  cream  saloons,  and  cigar  stands,  and  to  do  a  general 
catering  business. 

FORM  96.  — DENTAL   SUPPLIES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  dentists'  chairs, 
files,  saws,  gold,  silver,  amalgam,  and  other  dental  accessories. 

FORM  97.  —  DESIGNERS. 

To  engage  in  business  as  designers,  pattern  makers,  manufacturers  of  blue 
prints,  and  to  carry  on  a  general  drafting  business. 

FORM  98.  — DIAMONDS  AND   PRECIOUS   STONES. 

To  export,  import,  buy,  sell,  and  generally  deal  in  diamonds,  emeralds,  pearls, 
rubies,  opals,  amethysts,  bloodstones,  and  all  precious  stones.  Also  to  carry  on  a 
general  jewelry  business  and  watchmakers'  business  in  connection  therewith. 

FORM  99.  —  DISTILLERS. 

To  manufacture,  distil,  and  rectify  whiskeys,  brandies,  and  spirituous  liquors  of 
every  class  and  description.  Also  to  carry  on  the  business  of  distiller  and  dealer 
in  whiskeys  and  brandies  of  every  class  and  description. 

FORM   100. —  DOCK  COMPANY. 

To  construct,  erect,  and  maintain  docks,  elevators,  piers,  basins,  loading  and 
unloading  machines,  coal-yards  and  all  kinds  of  terminal  and  transfer  facilities  for 
railway  or  water  transportation.  Also,  to  engage  in  freighting,  lighterage,  wharfage, 
and  warehousing  business.  Also,  to  load  and  unload  cars  and  vessels  of  all  kinds 
and  descriptions.  Also,  to  purchase  docking  and  berthing  facilities  for  steam  and 
sailing  vessels  of  all  kinds  and  descriptions. 

FORM  101.  —  DREDGING. 

To  carry  on  the  business  of  dredging  in  all  its  various  branches  ;  to  buy,  sell, 
manufacture,  purchase,  lease,  or  otherwise  acquire,  own,  maintain,  and  operate 
docks,  scows,  lighters,  derricks,  vessels  —  steam  or  otherwise  —  engines,_  cars, 
wagons,  tools,  and  personal  property  of  every  class  and  description  convenient  or 
necessary  in  carrying  on  the  business  of  dredging. 

FORM  102.  — DRESSMAKING. 

To  design,  cut,  make  up,  and  fit  dresses,  gowns,  coats,  suits,  and  all  other 
articles  of  feminine  apparel,  and  in  connection  therewith  to  carry  on  a  general 
dressmaking  and  tailoring  establishment. 

FORM  103.  —  DRILLING. 

To  prospect,  bore,  drill  for,  and  produce  oil  and  natural  gas;  to  purchase, 
lease,  or  otherwise  acquire  lands  believed  to  contain  oil  and  gas,  and  to  erect  and 
maintain  thereon  pumping  and  drilling  stations,  reservoirs,  tanks,  pipe  lines,  and 
other  facilities  and  conveniences  that  may  be  necessary  or  required  in  and  about 
said  business. 

FORM  104.  — DRUGS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  all  kinds  of 
drugs,  druggists'  sundries,  pharmaceutical,  medicinal,  chemical,  and  all  other  prepa- 
rations; to  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  compounds, 
pigments,  electrical,  medicinal,  surgical,  and  scientific  apparatus  and  proprietary 
articles  of  all  kinds.  To  maintain  a  laboratory  for  the  analysis  of  all  kinds  of 
chemical,  animal,  and  vegetable  products. 

626 


FORMS    AXD    PRECEDENTS. 

FORM  105.  — ELECTRIC  GENERATING  MACHINERY. 

To  manufacture,  construct,  purchase,  or  otherwise  acquire,  deal  in,  sell,  hire- 
lease,  use,  repair,  operate,  and  maintain  electric  generating  machinery  and  apparatus? 
dynamos,  motors,  meters,  electric  engines,  accumulators,  and  any  and  all  parts, 
devices,  instruments,  and  things  adapted  to  be  used  in  the  construction  of  or  upon 
or  in  connection  with  or  in  the  operation  of  such  electric  generating  machinery 
and  apparatus,  dynamos,  motors,  meters,  electric  engines,  and  accumulators,  and 
also  all  apparatus,  machinery,  engines,  tools,  devices,  and  appliances  for  generating 
or  producing,  accumulating,  distributing,  and  using  electricity  for  any  purpose,  and 
also  all  parts,  attachments,  devices,  instruments,  articles,  and  things  to  be  used  there- 
with or  in  the  construction  and  operation  thereof.  To  construct,  purchase,  or  other- 
wise acquire,  deal  in,  sell,  hire,  lease,  use,  repair,  operate,  and  maintain  electric 
light  plants,  etc. 

FORM   106.— ELEVATORS  (GRAIN). 

To  erect,  buy,  sell,  lease,  or  otherwise  acquire  and  maintain  and  operate  eleva- 
tors for  the  storage  of  grains  and  cereals  of  every  kind  and  description.  To  build, 
operate,  and  maintain  warehouses  aud  to  do  a  general  warehouse  business ;  to  issue, 
register,  and  certify  warehouse  receipts.     To  manufacture,  buy,  sell,  and  deal  in  ice. 

FORM  107. —ELEVATORS   (PASSENGER). 

To  manufacture,  buy,  sell,  lease,  or  otherwise,  acquire,  import,  export,  equip, 
maintain,  and  operate  elevators  and  hoisting  machinery  of  every  class  and  descrip- 
tion, whether  propelled  by  electricity,  air,  power,  steam,  or  otherwise. 

FORM   108.  —  EMBROIDERIES. 

To  design  and  embroider  dresses,  coats,  table  linens,  bed  linen,  and  ladies'  wear 
of  all  kinds  and  descriptions,  aud  in  couuection  therewith  to  deal  in  sewing  silks, 
embroidery  silks,  fancy  laces,  and  scissors,  pins,  needles,  and  other  articles  neces- 
sary or  useful  in  said  business. 

FORM    109.  —  EMPLOYMENT  AGENCIES. 

To  secure  employments  for  adults  of  both  sexes,  and  in  connection  therewith  to 
carry  on  a  general  employment  bureau. 

FORM  110.  — ENGINEERING  AND  DREDGING  COMPANY. 

To  carry  on  a  general  dredging,  contracting,  and  engineering  business  in  all 
of  their  branches  ;  also  to  design,  construct,  enlarge,  extend,  repair,  complete, 
take  down  and  remove,  or  otherwise  engage  in  any  work  upon  bridges,  piers, 
docks,  foundations,  mines,  shafts,  tunnels,  wells,  waterworks,  lighthouses,  build- 
ings, railroads,  telegraph  and  telephone  lines,  canals  and  all  kinds  of  excavations, 
and  iron,  wood,  masonry,  and  earth  constructions  in  all  parts  of  the  world,  and 
to  make,  execute,  and  take  or  receive  any  contracts  or  assignments  of  contracts, 
therefor  or  relating  thereto  or  connected  therewith. 

To  engage  in  the  business  of  manufacturing,  buying,  selling,  and  dealing  in 
cranes  for  lifting,  hoisting,  dredging,  and  conveying  materials  of  all  kinds,  and  in 
conveying  machinery,  hoisting  machinery,  and  coal-handling  machinery  of  every 
description,  and  in  hydraulic,  electric,  pneumatic,  and  power  machinery  of  everj 
description,  and  in  steam  hammers,  charging  machines,  drilling,  concentrati 
milling,  and  mining  machines,  ingot  extractors  and  foundry  plants,  and  in  all  kinds 
of  fittings,  tools,  supplies,  and  apparatus  pertaining  thereto:  or  for  any  other  pur- 
pose winch  now  is  or  may  be  incidental  or  necessary  for  a  general  contracting  or 
engineering  business. 

To  manufacture  or  purchase,  or  both,  all  fools,  machinery,  and  appliances  neces- 
sary, proper,  or  convenient  for  the  carrying  on  of  the  said  manufactures. 

To  manufacture,  buy,  sell,  and  generally  deal  in  iron,  steel,  and  other  metals, 
and  any  and  all  the  products  thereof. 

To  quarry,  mine,  cut,  saw,  finish,  prepare  for  market,  buy,  sell,  and  deal  in  min- 

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INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS. 

erals  and  mineral  substances  of  all  kinds ;  to  buy,  lease,  or  otherwise  acquire,  use, 
build,  sell,  lease,  or  otherwise  dispose  of  lauds  or  any  interest  thereon ;  to  build, 
maintain,  own,  lease,  and  operate  roads,  railroads,  or  bridges  (together  with  rights 
of  way  for  the  same),  canal  boats,  steamboats,  and  other  means  and  mechanism  of 
transportation ;  reservoirs,  dams,  watercourses,  aqueducts,  wharves,  mills,  hydraulic 
works,  power  and  lighting  plants,  equipment  works,  factories,  warehouses,  dwell- 
ing houses,  and  other  works  which  may  be  necessary  or  convenient  to  the  carrying 
out  of  the  objects  of  the  company. 

To  purchase  and  otherwise  acquire,  and  to  operate,  maintain,  and  dispose  of  the 
mills,  plants,  aud  business  of  individuals,  corporations,  and  firms  in  any  business 
similar  to  the  business  of  this  company  or  allied  therewith. 

To  purchase  or  otherwise  acquire,  sell,  dispose  of,  aud  deal  in  real  and  personal 
property  of  all  kinds,  and  in  particular  lands,  buildings,  business  concerns  and  un- 
dertakings, mortgages,  shares,  book  debts  and  claims,  and  any  interest  in  real  or 
personal  property,  and  any  claims  against  such  property  or  against  any  person 
or  company,  and  to  carry  on  any  business,  concern,  or  undertaking  so  acquired. 

To  enter  into,  make,  perform,  aud  carry  out  contracts  of  every  kind  and  for  any 
lawful  purpose  with  any  person,  firm,  association,  or  corporation. 

FORM  111.— EXPLOSIVES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  blasts,  sporting 
powder,  and  high  explosives  of  every  class,  nature,  and  description.  To  manufac- 
ture, buy,  sell,  export,  import,  and  generally  deal  in  machinery,  supplies,  tools,  and 
appliances,  necessary,  proper,  or  convenient  for  the  carrying  on  of  the  above 
described  lines  of  business. 

FORM  112.  — EXPRESS. 

To  carry  on  the  business  of  engaging,  receiving,  transporting,  and  delivering 
merchandise  upon  freight,  or  for  hire,  within  the  corporate  limits  of  any  city,  town, 
or  village  in  the  United  States,  or  between  any  cities,  towns,  or  villages  in  the 
United  States,  or  between  any  port  of  the  United  States  and  any  port  or  ports  of 
the  United  States,  or  between  any  foreign  port  or  ports  and  any  port  or  ports  of  the 
United  States.  To  carry  on  the  business  of  equipping,  maintaining,  and  operating 
wagons,  drays,  cars,  and  vessels  of  every  class  and  description  for  the  carrying  on 
of  the  business  hereinbefore  provided  for.  To  enter  into  contracts  for  the  trans- 
portation of  merchandise  between  any  of  the  localities  hereinbefore  mentioned,  and 
to  enter  into  contracts  for  the  carriage  of  mails,  passengers,  goods,  wares,  and 
merchandise  by  any  means,  either  by  its  own  vessels,  railways,  or  conveyances,  or 
by  the  vessels,  railways,  or  conveyances  of  others.  To  carry  on  a  general  express, 
freight,  aud  transportation  business ;  to  gather,  receive,  distribute,  and  deliver 
goods,  wares,  and  merchandise  of  every  class  and  description.  To  establish  stores 
and  warehouses  for  receiving  and  delivering  packages  and  circular  matter. 

FORM   113.  —  EXTRACTING  COMPANY. 

To  mine  and  extract  gold,  silver,  and  other  pi-ecious  metals  from  places  and 
lodes  or  other  mineral  lands  in  any  part  of  the  United  States,  aud  in  any  and  all 
foreign  countries,  and  to  this  end  to  purchase,  lease,  or  otherwise  acquire,  hold, 
own,  mortgage,  sell,  operate,  and  control  mining  property,  and  all  necessary  plants 
and  machinery  adapted  for  the  purposes  of  mining  and  extracting  gold,  silver,  and 
precious  metals. 

FORM   114.  — FANCY  GLASS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  stained  glass, 
transparent  vault  and  sidewalk  lights,  hail-proof  glass  for  greenhouses,  skylights, 
and  ornamental  stained  glass  of  all  kinds  and  descriptions. 

FORM  115. —  FANCY   GOODS  AND  NOTIONS. 

To  buy,  sell,  export,  import,  and  generally  deal  in  fancy  goods  of  all  kinds  and 
descriptions,  laces,  trimmings,  lingerie  robes,  dry  goods,  and  notions  of  all  kinds 
aud  descriptions. 

628 


FORMS    AND    PRECEDENTS. 

FORM  116.  — FARM   PRODUCTS,    SOUTHERN. 

To  produce,  manufacture,  refine,  buy,  sell,  import,  export,  and  generally  deal 
in  cotton,  sugar  cane,  sugar,  molasses,  syrups,  and  tobacco  in  all  forms,  and  other 
products  of  agriculture  or  industry. 

FORM  117.  — FINANCIAL  AGENTS.; 

To  act  as  financial  agents  for  governments,  corporations,  firms,  and  individuals 
for  the  purpose  of  buying  and  selling  bonds,  stocks,  mortgages,  and  debentures, 
and  for  the  purpose  of  raising  funds  to  carry  on  business  of  every  nature  and 
description. 

FORM  118.  —  FIREPROOFING. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  fireproofing 
brick  and  building  material  of  every  kind,  nature,  and  description.  Also  to  manu- 
facture, buy,  sell,  import,  export,  and  generally  deal  in  building  material  and  appli- 
ances for  the  construction  of  fireproof  buildings  and  the  protection  of  the  same 
from  fire. 

FORM   119.  —  FIREWORKS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  fireworks,  fire 
crackers,  torpedoes,  gunpowder,  and  pyrotechnics  of  every  class  and  description. 

FORM  120.  —  FISHERIES. 

To  engage  in  the  business  of  producing,  selling,  exporting,  importing,  and  deal- 
ing in  fish  and  sea  products,  nets,  lines,  and  seines,  and  all  kinds  of  appliances  for 
the  catching  or  preserving  of  fish.  Also,  to  engage  in  the  business  of  catching, 
storing,  freezing,  packing,  salting,  canning,  and  otherwise  preserving  fish.  Also  to 
engage  in  the  business  of  propagating  fish  and  maintaining  ponds  for  that  purpose ; 
to  construct,  purchase,  lease,  or  otherwise  acquire,  maintain,  and  operate  cold- 
storage  and  refrigerator  plants  and  refrigerating  cars,  and  to  do  a  general  warehouse 
and  storage  business,  and  in  connection  therewith  to  issue  registered^  certified,  and 
guaranteed  warehouse  receipts. 

FORM  121. —  FLORISTS. 

To  cultivate,  raise,  buy,  sell,  export,  import,  and  generally  deal  in  flowers, 
plants,  shrubs,  trees,  and  bushes  of  every  class  and  description.  Also,  in  connec- 
tion therewith  to  maintain  and  operate  hot  beds,  greenhouses,  and  nurseries. 

FORM  122.  — FOOD   PRODUCTS. 

To  produce,  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  food 
and  cereal  products  of  all  classes  and  description.  Also  to  can,  export,  import,  and 
sell,  meats,  fish,  vegetables,  and  fruits  of  all  kinds  and  descriptions. 

FORM    123.  — FOREIGN  COMMERCIAL   COMPANY. 

This  corporation  is  formed  for  the  carrying  on,  in  any  foreign  countries,  of  the 
several  lines  of  business  herein  described.  To  purchase,  sell,  exchange,  lease,  or 
otherwise  acquire  real  or  personal  property,  and  in  particular  lands,  oil  wells,  refin- 
eries, mines,  mining  rights,  minerals,  ores,  buildings,  machinery,  plants,  stores, 
licenses,  concessions,  rights  ef  way,  light  or  water  rights,  and  any  rights  or  privi- 
leges which  may  seem  to  the  directors  convenient  with  reference  to  the  business  of 
the  company,  and  whether  for  the  purpose  of  resale,  realization,  or  otherwise,  to 
manage,  develop,  lease,  mortgage,  or  otherwise  deal  with  the  whole  or  any  part  of 
such  property  or  rights.  To  prospect,  explore,  develop,  maintain,  and  carry  on  all 
or  any  lands,  wells,  mines,  or  mining  rights,  minerals,  ores,  works,  or  other  prop- 
erties from  time  to  time  iii  the  possession  of  the  < many  in  any  number  deemed 

desirable;  to  erect  all  accessary  or  convenient  refineries,  mills,  works,  machinery, 
laboratories,  workshops,  dwelling-houses  for  workmen  and  others,  and  other  build- 
ings, works,  and  appliances,  and  to  aid  or  subscribe  towards  or  subsidize  any  such 

629 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

objects.  To  clear,  plat  for  town-site  purposes,  manage,  farm,  cultivate,  plant,  and. 
otherwise  exploit,  work,  or  improve  any  land  which  or  any  interest  in  which  may 
belong  to  the  company ;  and  to  deal  with  or  otherwise  turn  to  account  any  farm 
or  other  products  of  any  such  land.  To  construct,  purchase,  lease,  or  otherwise 
acquire,  maintain,  and  operate  private  railways,  tramways,  wagon  roads,  private 
telegraph  and  telephone  lines.  To  carry  on  busiuess  as  merchants,  shipowners, 
builders,  or  contractors ;  to  acquire  by  grant,  purchase,  or  otherwise  concessions  of 
any  property  or  privileges  from  any  government  or  from  any  authority,  individual, 
municipal,  or  otherwise,  and  to  perform  and  fulfil  the  conditions  thereof.  To  carry 
on,  iu  all  its  branches,  any  kind  of  manufacturing  and  trading  business.  To  buy, 
sell,  and  deal  in  generally  all  kinds  of  manufactured  products.  To  acquire  by  pur- 
chase or  otherwise,  under  franchise  or  grant,  all  or  any  rights  or  privileges  here- 
tofore granted  or  hereafter  to  be  granted  by  any  country,  state,  or  city,  foreign 
or  domestic. 

To  generally  trade  in,  store,  carry,  and  transport  all  kinds  of  goods,  wares,  mer- 
chandise, provisious,  and  supplies.  To  acquire  by  purchase  or  otherwise,  to  own, 
hold,  buy,  sell,  or  convey,  lease,  mortgage,  or  encumber  real  estate  or  other  prop- 
erty, persoual  and  mixed.  To  erect  and  construct  houses,  buildings,  warehouses, 
and  works  of  every  description  on  any  land  of  the  company  acquired  by  purchase, 
lease,  or  otherwise. 

To  buy,  sell,  or  otherwise  acquire,  import,  export,  and  generally  deal  in  all 
kinds  of  agricultural  machinery ;  without  the  State  of  ,  to  acquire,  construct, 

maintain,  own,  and  operate  water  works,  and  to  supply  municipalities,  corpora- 
tions, and  individuals  with  water  and  water  power;  also  to  acquire,  erect,  maintain, 
and  construct  any  and  all  necessary  dams,  buildings,  plants,  machinery,  fixtures,  and 
apparatus  of  every  sort  for  supplying  municipalities,  corporations,  and  individuals 
with  water  and  water  power  for  all  purposes,  and  to  carry  on  any  business  inci- 
dental thereto,  including  the  purpose  of  acquiring,  constructing,  maintaining,  and 
operating  water  works,  pumping  stations,  and  conduits  thereto  appertaining  without 
the  State  of  ,  and  in  any  foreign  country,  State,  or  municipality ;  also  to 

supply  the  citizens  and  inhabitants  thereof  and  the  corporations  located  and  trans- 
acting business  therein  with  water  and  water  power  for  domestic,  mechanical,  public, 
and  fire  or  irrigation  purposes,  with  power  to  acquire,  hold,  lease,  and  convey  real 
and  personal  estate  for  the  business  of  the  corporation,  and  to  acquire,  hold,  own, 
possess,  and  convey  franchises  and  grants  from  foreign  governmental,  State,  or 
municipal  authorities  for  supplying  cities,  villages,  and  towns  or  either,  and  the  in- 
habitants thereof  with  water  for  all  purposes  ;  also  to  carry  on  the  business  of 
operating  water  works,  and  to  acquire  and  own  stock  and  bonds  of  other  corpora- 
tions organized  for  like  purposes,  and  to  acquire,  own,  hold,  and  possess  all  such 
other  personal  property  as  may  be  suitable  or  convenient  for  the  business  of  the 
company,  with  the  right  to  issue  bonds  and  secure  the  same  by  mortgage  of 
the  franchises,  rights,  contracts,  and  property  of  the  corporation,  real  and  per- 
sonal, and  to  issue  common  or  preferred  stock,  and  to  do  all  and  everything 
necessary,  suitable,  or  proper  for  the  accomplishment  of  any  of  the  purposes  or 
the  attainment  of  any  of  the  objects  hereinbefore  enumerated  which  shall  at  any 
time  appear  for  the  benefit  of  the  corporation ;  and  in  general  to  carry  on  any 
other  business,  whether  manufacturing  or  otherwise,  which  may  seem  to  the  cor- 
poration capable  of  being  conveniently  carried  on  in  connection  with  the  above  or 
calculated  to  enhance  the  value  or  render  profitable  any  of  the  corporation's  prop- 
erty or  rights. 

Without  the  State  of  and  in  any  foreign  country,  State,  or  municipality 

to  acquire  water  by  grant,  purchase,  development,  or  otherwise,  and  in  connection 
therewith  to  furnish  and  sell  water  to  corporations,  public  and  private  manufac- 
tories, and  individuals  for  fire  protection,  manufacturing,  domestic  and  irrigation 
purposes,  and  to  collect  payments  or  rentals  for  the  same. 

To  exercise  without  the  State  of  and  within  any  foreign  country,  State, 

or  municipality,  the  right  of  eminent  domain,  and  in  the  lawful  exercise  thereof  to 
condemn  for  use  by  said  company,  its  successors  or  assigns,  lands,  tenements, 
hereditaments,  and  watercourses  for  the  purpose  of  constructing  thereon  artificial 
water  ways,  irrigation  and  canal  ditches,  aqueducts,  dams,  reservoirs,  tanks,  stand- 

630 


FORMS    AND    PRECEDENTS. 

pipes,  pumping  stations,  pumping  houses,  water  works,  hydrants,  mains,  pipe  lines, 
gates,  and  valves. 

In  connection  with  the  power  to  exercise  the  right  of  eminent  domain  as  here- 
inbefore provided,  said  lands,  tenements,  hereditaments,  and  watercourses  shall, 
subject  to  the  consent  and  approval  of  the  State,  country,  or  municipality  wherein 
the  said  right  of  eminent  domain  shall  be  exercised,  be  condemned  and  its  value 
assessed  by  a  board  of  commissioners  appointed  by  said  foreign  country,  State,  or 
municipality  acting  jointly  with  a  like  commission  appointed  by  the  board  of  di- 
rectors of  tins  company.  In  case  the  two  commissions  cannot  tor  any  reason  agree, 
an  arbitrator  shall  be  appointed  by  the  mutual  consent  of  such  foreign  State,  coun- 
try, or  municipality  and  by  the  company,  whose  decision  shall  be  final  and  conclusive 
upon  both  parties  to  the  arbitration. 

Without  the  State  of  ,  subject  to  the  approval  and  consent  of  the  gov- 

ernment, State,  or  municipality  wherein  the  rights  hereinbefore  provided  shall  be 
exercised,  the  company  shall  have  the  right  to  make  such  rules  and  regulations 
governing  the  distribution  of  water  and  fixing  the  prices  for  water  distribution  as 
shall  be  deemed  by  it  from  time  to  time  necessary  and  proper  in  the  premises  ;  such 
rules  when  filed  with  the  proper  authorities  of  the  State,  county,  or  municipality  to 
become  law. 

Without  the  State  of  and  subject  to  the  approval  and  consent  of  the 

government,  State,  or  municipality  wherein  the  rights  hereinbefore  provided  for  shall 
be  exercised,  the  company  shall  have  the  right  to  make  such  rules  and  regulations 
for  the  collection  of  debts  due  the  company  from  corporations,  public  or  private, 
and  from  individuals  when  the  same  shall  have  been  incurred  for  water  furnished 
by  said  company  to  any  such  corporation  or  individual  for  the  use  and  benefit  of 
real  estate  owned  or  leased  by  them;  such  rules  to  provide,  by  and  with  the  consent 
of  the  State,  government,  or  municipality,  that  the  same  shall  be  and  become  a  first 
hen  against  such  real  estate  just  above  referred  to. 

Without  the  State  of  said  Company  shall  have  the  power  and  in  any 

foreign  country,  State,  or  municipahty  wherein  it  installs  water  works  to  accept 
such  guaranties  from  foreign  municipalities  as  to  the  water  of  such  consumption 
municipalities  as  the  company  shall  require  in  the  premises. 

The  company  shall  have  the  right  to  accept  subsidies  from  foreign  governments, 
States,  or  municipalities,  and  shall  have  the  right  to  organize  sub-companies  for  any 
purpose  or  purposes  authorized  by  law.  The  said  company  shall  have  the  right 
without  the  State  of  and  without  the  United  States  and  in  any  foreign  coun- 

try, by  and  with  the  consent  of  the  government  of  said  country,  to  import  all  materi- 
als used  in  the  construction  of  plants  erected  by  it,  and  to  import  the  same  free 
from  all  governmental  dues  and  tariffs  of  said  foreign  country,  provided  said  materi- 
als cannot  be  purchased  therein  at  prices  offered  in  other  countries. 

The  company  shall  have  the  right  to  sell,  assign,  and  transfer  to  any  corporation 
or  individual  any  or  all  of  its  property  upon  the  consent  of  two-thirds  of  its  stock- 
holders first  obtained  at  a  meeting  duly  called  for  that  purpose,  said  sale,  assignment, 
and  transfer  to  include,  if  the  company  so  elect,  any  right,  grant,  franchise,  and 
privilege  at  any  time  bestowed  upon  said  company  by  any  government,  State,  or 
municipality,  foreign  or  domestic. 

FORM   124. —  FRUIT  COMPANY. 

To  buy,  sell,  import,  export,  and  generally  deal  in  fruits  and  fruit  products. 
To  buy,  sell,  lease,  or  otherwise  acquire,  mortgage,  sell,  or  otherwise  dispose 
of  real  estate  to  any  amount  not  limited  by  law.  To  engage  in  the  cultivation, 
planting,  and  production  of  fruits  and  agricultural  products.  To  prepare  and 
manufacture  fruit  and  vegetable  products  and  kindred  goods  of  every  class 
and  description. 

FORM  125. —  FRUITS  (TROPICAL). 

To  plant,  cultivate,  grow,  buy,  sell,  export,  import,  and  generally  deal  in  bananas 
oranges,  pineapples,  mangoes,  guava,  grapes,  limes,  olives,  dates,  figs,  pecans,  and 
all  kinds  of  tropical  fruits,  plants,  and  nuts. 

G31 


INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS. 

FORM  126.— FUEL-SAVING  MACHINES. 

To  manufacture,  buy,  sell,  lease,  or  otherwise  acquire  and  generally  deal  in 
smoke-preventing  and  fuel-saving  mechanical  and  electrical  apparatus  and  devices. 

FORM   127.  —  FURNITURE. 

To  manufacture,  prepare,  produce,  sell,  import,  export,  lease,  and  generally  deal 
in  furniture  for  domestic  and  business  uses.  Also  to  buy,  sell,  import,  export,  and 
generally  deal  in  furnishings  of  every  class  and  description. 

FORM   128.  —  FURRIERS. 

To  buy,  sell,  export,  import,  and  generally  deal  in  both  natural  and  artificial  furs 
of  all  kinds  and  descriptions.  Also  to  buy  and  sell  coats,  robes,  and  rugs  and  all  kinds 
of  winter  wearing  apparel. 

FORM  129. —GARBAGE  MACHINERY. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  street  cleaning, 
garbage,  snow  removal  wagons  and  carts,  and  all  kinds  of  machinery,  apparatus,  and 
appliances  connected  with  the  cleaning  of  streets,  walks,  areas,  platforms,  the 
sprinkling  of  streets,  and  the  removal  of  garbage. 

FORM  130.  — GAS. 

To  manufacture,  store,  sell,  distribute,  and  supply  gas,  and  to  operate  a  gas 
plant  at  •     Also  to  construct  works  for  holding,  receiving,  and  distributing 

gas.  Also  to  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  gas 
meters,  pipes,  stoves,  burners,  engines,  and  other  appliances  and  conveniences 
necessary  for  the  business  of  the  company. 

FORM   131.  —  GINNERIES. 

To  erect,  maintain,  purchase,  or  otherwise  acquire,  operate,  and  maintain  cotton- 
seed oil  mills  and  ginneries.  Also,  in  connection  therewith,  to  produce  cotton-seed 
oil.  To  buy  and  sell  cotton  seed;  to  manufacture,  buy,  sell,  export,  import,  and 
generally  deal  in  cotton-seed  oil,  and  the  products  and  by-products  of  cotton  seed. 
Also  to  manipulate  and  compound  cotton-seed  oil,  with  other  substances,  so  as  to 
make  fertilizers  to  be  sold  for  fertilizing  land.  Also  to  gin  and  compress  cotton 
into  bales  for  marketing  purposes  or  otherwise. 

FORM  132.  — GLASS. 

To  manufacture,  export,  import,  and  generally  deal  in  window,  plate,' and  colored 
glass  of  all  kinds  and  descriptions.  Also  to  manufacture,  buy,  sell,  export,  import, 
and  generally  deal  in  table  glass  ware,  vases,  and  glass  ware  of  all  kinds  and  descrip- 
tions. Also  to  manufacture,  buy,  and  import  such  crude  materials  as  are  necessary 
or  convenient  for  the  manufacture  of  glass  or  glass  ware. 

FORM  133. —GLOVES  AND  MITTENS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  kid  gloves,  cotton 
gloves,  silk  gloves,  mits  and  mittens  of  every  kind  and  description. 

FORM  134.  — GOLD    AND  SILVER  WARE. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  gold  and  silver 
ware,  both  solid  and  plated,  of  all  classes  and  descriptions.  Also  to  manufacture, 
buy,  sell,  export,  import,  and  generally  deal  in  novelties,  glass  ware,  and  fine  cut- 
lery, leather  goods,  and  carved  goods  of  all  classes  and  descriptions. 

FORM  135.  —  GRANITE. 

To  quarry,  prepare,  finish,  manufacture,  buy,  sell,  export,  import,  and  generally 
deal  in  granite,  marble,  building  and  pavement  stone  of  every  class  and  description. 

632 


FORMS    AND    PRECEDENTS. 


FORM  136.  —  GRAPHITE. 


To  manufacture,  purify,  prepare,  export,  import,  buy,  sell,  and  generally  deal  in 
graphite  and  carbon  of  all  classes  and  descriptions.  Also  to  engage  in  the  business 
of  manufacturing,  buying,  selling,  exporting,  and  generally  dealing  in  paints,  elec- 
trotyping,  and  kindred  lines  of  business. 

FORM  137.  —  GROCERS. 

To  carry  on  the  business  of  retail  and  wholesale  grocers,  and  to  operate  in  con- 
nection with  the  same  a  meat  market  and  coal  storage  establishments. 

FORM  138.  —  HAIR  GOODS,  HAIR  IMPORTERS,  AND 
HAIR  DRESSERS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  both  natural  and 
artificial  hair  and  hair  goods  of  every  class  and  description.  Also  in  connection 
therewith  to  carry  on  the  business  of  hair  dressers. 

FORM  139. —  HARNESS  AND  SADDLERY. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  harnesses, 
saddles,  and  leather  goods  of  all  kinds  and  descriptions. 

FORM  140.  — HAT  AND  CAP  MANUFACTURERS. 

To  manufacture,  buy,  sell,  export,  import,  aud  generally  deal  in  hats,  caps,  head- 
gear of  all  kinds  and  descriptions. 

FORM   141.  —  HEATING. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  apparatus  for 
heating  buildings  and  houses  by  gas,  electricity,  steam,  or  furnace. 

FORM  142.  —  HOSIERY  AND  UNDERWEAR. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  men's  and 
women's  hosiery  and  underwear  of  all  kinds  and  descriptions. 

FORM  143.  — HOUSE  FURNISHERS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  furniture,  car- 
pets, rugs,  curtains  and  kitchen  utensils,  china,  silver  ware,  glass  ware,  refrigerators, 
and  all  kinds  of  household  furniture. 

FORM   144. —  ICE. 

To  manufacture,  sell,  buy,  export,  import,  and  generally  deal  in  machinery, 
tools,  and  devices  of  every  character  and  description  for  the  cutting  or  manufacture 
of  ice.  To  purchase  chemicals  for  the  manufacture  of  artificial  ice.  To  erect,  build, 
purchase,  lease,  or  otherwise  acquire  suitable  laud  and  plants  for  the  manufacture 
and  storage  of  ice.  To  engage  in  the  business  of  wholesaling  aud  retailing  ice  to 
middlemen  and  consumers. 

FORM  145.  —  INSPECTION  OF  ELEVATORS. 

To  engage  in  the  business  of  inspecting  and  repairing  freight  and  passenger  ele- 
vators in  office  buildings,  business  blocks,  stores,  warehouses,  hotels,  and  apartment 
houses,  for  the  protection  of  the  owners  or  lessees  or  for  insurance  companies  en- 
gaged  in  the  business  of  guaranteeing  owners  or  their  lessees  against  accidents  in 
the  operation  of  such  freight  and  passenger  elevators. 

FORM   146.- INSURANCE. 

To  carry  on  the  general  business  of  insurers  of  persons  and  property,  including 
thereunder  the  transaction  of  a  general  life,  fire,  marine,  casualty,  plate  glass,  bur- 
glary, and  guaranty  insurance  business. 

633 


INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS. 

FORM  147. —IRON  AND   STEEL. 

To  purchase,  lease,  or  otherwise  acquire  lands  in  any  part  of  the  world  for  the 
purpose  of  prospecting  for  iron,  coal,  and  other  ores.  To  mine  or  otherwise  to  re- 
move from  such  lands  iron,  coal,  and  such  other  minerals  as  may  be  found  thereon. 
To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  iron,  steel,  manga- 
nese, coke,  and  coal.  To  sell  and  generally  deal  at  wholesale  and  retail,  in  iron, 
steel,  manganese,  coal,  coke,  stone,  asphaltum,  wood,  lumber,  and  other  materials, 
and  the  products  thereof. 

FORM  148.  —  JEWELLERS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  jewelry,  precious 
stones,  watches,  clocks,  silver  and  gold  ware,  and  enamel  goods  of  every  class  and 
description. 

FORM  149.  — KNIT  GOODS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  sweaters,  caps, 
leggings,  gloves,  mittens,  shawls,  and  knit  goods  of  every  kind  and  description. 

FORM  150.  —  LACES  AND  EMBROIDERIES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  domestic  and 
imported  laces  and  embroideries  of  all  kinds. 

FORM  151.  —  LAMPS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  kerosene,  elec- 
tric, and  gas  lamps,  burners,  and  fixtures,  and  devices  of  all  kinds  and  descriptions. 

FORM  152.  —  LAUNDRY. 

To  build,  erect,  purchase,  lease,  equip,  or  otherwise  acquire  a  suitable  plant  for 
the  purpose  of  carrying  on  a  general  steam  and  hand  laundry  business.  Also  to 
launder,  color,  dye,  disinfect,  mend,  clean,  renovate,  and  prepare  for  use  personal 
wearing  apparel,  household  linen,  curtains,  clothing,  carpets,  rugs,  and  fabrics  of 
all  kinds. 

FORM  153.  —  LEAD   COMPANY. 

To  purchase,  lease,  or  otherwise  acquire,  to  own,  develop,  and  sell  lands  be- 
lieved to  contain  lead  and  other  minerals  ;  also  to  construct,  operate,  and  carry  on 
works  for  smelting,  parting,  refining,  or  working  lead  or  other  metals. 

FORM  154.  —  LEATHER. 

To  manufacture,  purchase,  export,  import,  sell,  and  generally  deal  in  leather 
and  all  products  thereof;  also  to  buy  and  sell  lands,  timber,  bark,  lumber,  and 
leather,  both  raw  and  manufactured,  and  all  kinds  of  leather  belting. 

FORM  155.  —  LIGHTERAGE. 

To  operate  and  maintain  vessels,  sloops,  barges,  dredging  machines,  tugs, 
steamers,  and' hoisting  machinery  necessary  for  the  carrying  on  of  a  lighterage 
business. 

FORM  156.  —  LIME  AND   PLASTER. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  Ume,  plaster, 
cement,  stone,  and  all  kinds  of  building  materials  and  supplies. 

FORM  157.— LITHOGRAPHERS. 

To  carry  on  the  business  of  lithographers,  printers,  electrotypers,  and  engravers. 

FORM  158.  —  LIVERIES. 

To  maintain  stables  for  the  care  of  horses,  mules,  carriages,  and  vehicles  of  all 
kinds  and  descriptions.     Also  to  maintain  in  connection  therewith  an  auto  garage- 

634 


FORMS   AND    PRECEDENTS. 


FORM  159.  —  LOCOMOBILES. 


To  manufacture,  construct,  purchase,  or  otherwise  acquire,  deal  in,  sell,  hire, 
lease,  use,  repair,  operate,  and  maintain  automobiles,  locomobiles,  autocycles,  and 
motor  vehicles,  wagons,  carriages,  and  stages  of  every  kind  and  character  whatso- 
ever; also  all  parts,  devices,  and  instruments,  appliances,  engines,  machinery,  and 
things  adapted  for  use  in  the  construction  of,  upon,  or  in  connection  with  or  in  the 
operation  of  such  automobiles,  locomobiles,  autocycles,  wagons,  carriages,  stages, 
and  motor  vehicles  of  every  kind  and  character  whatsoever ;  also  generating  and 
propelling  apparatus,  motive  power  and  machinery  therefor. 

FORM  160.  — LUMBER  AND  NURSERY. 

To  purchase,  lease,  or  otherwise  acquire  real  or  personal  property  of  every  class 
and  description ;  to  raise,  produce,  buy,  sell,  exchange,  and  deal  in  trees,  plants, 
shrubs,  cereals,  and  any  and  all  kinds  of  vegetable  products.  To  do  a  general 
nursery  business.  To  grow  and  produce  trees  and  timber  suitable  for  manufacture 
into  lumber.  To  manufacture  lumber,  shingles,  laths,  staves,  boxes,  and  barrels. 
To  buy,  lease,  or  otherwise  acquire,  maintain,  and  operate  saw-mills  and  lumber 
yards. 

FORM  161.— MACHINISTS. 

To  repair,  construct,  alter,  and  build  machines  and  machinery  of  every  kind  and 
description. 

FORM  162.  —  MAGAZINES. 

To  prepare  for  publication,  print,  electrotype,  bind,  sell,  and  distribute  maga- 
zines, newspapers,  books,  and  publications  of  every  class  and  description,  and  to 
engage  generally  in  the  business  of  job  and  book  printers,  bookbinders,  engravers, 
and  electrotypers. 

FORM  163.— MANGANESE,   ETC. 

To  carry  on  the  business  of  mining,  milling,  concentrating,  converting,  smelting, 
treating,  preparing  for  market,  manufacturing,  buying,  selling,  exchanging,  and 
otherwise  producing  and  dealing  in  manganese,  copper,  lead,  zinc,  brass,  iron,  steel, 
and  in  all  kinds  of  ores,  metals,  and  minerals,  and  in  the  products  and  by-products 
thereof  of  every  kind  and  description ;  and  by  whatsoever  process  tin;  same  can  be 
or  mav  hereafter  be  produced,  and  generally  and  without  limit  as  to  amount,  to  buy, 
sell,  exchange,  lease,  acquire,  and  deal  in  lands,  mines,  and  mineral  rights  and 
claims,  and  in  the  above  specified  products,  and  to  conduct  all  business  appurtenant 
thereto. 

FORM  164.  — MANUFACTURERS'  AGENTS. 

To  act  as  manufacturers'  agents  for  corporations,  firms,  individuals  engaged  in 
the  manufacture  of  any  kind  of  goods,  wares,  and  merchandise. 

FORM  165.— MARBLE  DEALERS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  marble,  onyx, 
granite,  and  building  and  monumental  stone  of  every  character  and  description. 
Also  to  deal  in  statuary,  antiques,  bronzes,  and  other  articles  of  a  similar  character. 

FORM  166.  — MASONS  AND  BUILDERS. 

To  carrv  on  a  general  masonry  and  contractors'  business.  Also  to  repair,  con- 
struct, fit,  and  operate  buildings,  houses,  and  structures  of  every  character  and 
description. 

FORM  167. —MECHANICAL  ENGINEERS. 

To  carry  on  the  business  of  mechanical  engineers  in  all  its  various  branches  ;  also 
to  manufacture  engines,  dynamos,  implements,  rolling-stock,  and  hardware  of  all 
kinds;  also  to  engage  in   business  as  tool  makers,  brass  founders,  mill  workers, 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

boiler  makers,  millwrights,  machinists,  manufacturers  of  iron  and  steel  compressors, 
merchants,  electrical,  civil,  and  water-supply  engineers. 

FORM  168.  —  MEDICAL  COLLEGE. 

To  build,  construct,  buy,  lease,  or  otherwise  acquire,  equip,  maintain,  and  con- 
duct a  college  for  the  purpose  of  giving  instruction  and  courses  of  study  in  medi- 
cine, materia  medica,  clinics,  therapeutics,  surgery,  and  pathology,  and  in  connection 
with'  the  foregoing  to  maintain  clinics,  dispensaries,  and  hospitals  ;  to  issue  to  those 
who  have  pursued  such  courses  of  instruction  therein  as  entitle  them  to  the  same, 
and  to  such  as  have  duly  completed  such  courses,  the  degree  of  Doctor  of  Medi- 
cine (M.D.).  Also  the  granting  of  diplomas  to  those  who  have  not  completed  the 
courses  necessary  to  obtain  the  degree  of  "  Doctor  of  Medicine,"  showing  the  com- 
pletion of  such  work  as  they  may  have  successfully  completed  while  in  the  institution. 

FORM  169.  — MEDICAL  INSTITUTE. 

To  build,  equip,  maintain,  and  operate  institutions  for  the  treatment  and  care 
of  the  sick,  young,  and  infirm.  To  furnish  massage  and  electrical  treatment  of  all 
kinds  ;  to  furnish  baths  of  all  kinds  and  descriptions ;  to  operate  dispensaries,  chem- 
ical and  physical  laboratories  ;  to  furnish  instruction  in  osteopathy,  massage,  medical 
electricity,  chiropody,  dermatology,  and  manicuring. 

FORM  170.  — MICA. 

To  purchase,  lease,  or  otherwise  acquire  lands  suitable  for  mining  purposes,  and 
to  equip,  work,  excavate,  develop,  and  mine  the  same ;  to  mine,  quarry,  smelt,  refine, 
dress,  amalgamate,  aud  prepare  for  market  mica,  nickel,  and  talc  ores.  To  manu- 
facture, buy,  sell,  import,  export,  and  generally  deal  in  plants,  machinery,  imple- 
ments, and  conveniences  required  in  connection  with  the  mining,  quarrying, 
smelting,  refining,  dressing,  and  amalgamating  of  mica,  nickel,  and  talc  ores. 

FORM   171. —MINING.     (Limited  powers.) 

To  prospect  for,  locate,  acquire  by  discovery,  lease,  license,  option,  purchase, 

franchise,  grant,  gift,  devise,  or  otherwise,  hold,  possess,  enjoy,  develop,  mine,  work, 

'  operate,  and  exploit  mines,  mineral  lands  and  claims,  mining  rights,  metalliferous 

lands  and  rights  in  or  elsewhere.     Also  to  carry  on  the  business  in  all  its  various 

branches  of  mining  for  gold,  silver,  tin,  lead,  iron,  and  coal. 

FORM  172.  — MINING.     (Full  powers.) 

(To  the  objects  set  forth  in  form  171  add  the  following  :) 

To  construct,  purchase,  or  otherwise  acquire,  maintain,  and  operate  tunnels, 
sluices,  reservoirs,  and  ditches  for  mining,  irrigation,  and  transportation  purposes. 
Also  to  purchase,  lease,  or  otherwise  acquire  lands,  mills,  mill  sites,  tunnel  sites, 
buildings,  machinery,  power  houses,  dumping  plants,  pump  machinery,  pump  rights, 
ditch  rights,  flumes,  pipes,  pipe  lines,  private  railways,  private  tramways,  private 
roads,  easements,  franchises,  and  licenses.  Also  to  purchase,  construct,  lease,  or 
otherwise  acquire,  operate,  aud  maintain  electric  lighting  and  power  plants,  buildings, 
machinery,  appliances,  and  equipments  appertaining  thereto.  To  purchase,  construct, 
lease,  or  otherwise  acquire,  operate,  and  maintain  telegraph  and  telephone  lines  for 
the  transmission  of  messages  and  sound  by  electricity.  To  furnish  gas,  water,  elec- 
tricity, power,  heat,  and  light  for  mining,  milling,  agricultural,  domestic,  and  other 
uses  aud  purposes,  and  to  sell,  lease,  or  dispose  of  the  same  to  such  persons  or  cor- 
porations, and  for  such  price  or  prices  aud  on  such  terms  and  conditions  as  to  this 
corporation  may  seem  proper.  To  develop,  sell,  store,  contract  for,  and  generally 
deal  in  and  dispose  of  to  such  persons  or  corporations,  and  for  such  price  or  prices 
and  on  such  terms  and  conditions  as  to  this  corporation  may  seem  proper,  electri- 
cal and  other  power  for  the  generation,  distribution,  and  supply  of  electricity  for 
miniug,  heating,  and  power  purposes.  To  purchase,  lease,  or  otherwise  acquire, 
construct,  and  maintain  plants  for  the  purpose  of  extracting  values  from  refractory 
ores.  To  purchase,  treat,  refine,  extract,  reduce,  crush,  calcine,  smelt,  concentrate, 
and  manipulate  all  kinds  of  ores,  minerals,  and  metalliferous  substances  with  a  view 

636 


FORMS    AND    PRECEDENTS. 

to  obtaining  therefrom  gold,  silver,  tin,  lead,  copper,  iron,  and  other  metals,  combi- 
nation of  metals,  or  other  valuable  substances  with  a  view  to  preparing  the  same 
for  market.  Generally  to  engage  in  smelting,  reducing,  crushing,  refining,  milling, 
treating,  assaying,  and  selling  minerals  and  ores  of  all  kinds,  classes,  and  descrip- 
tions. "To  buy,  sell,  manufacture,  and  generally  deal  in  machinery,  blasting  powder, 
and  high  explosives  of  every  description,  fuses,  caps,  implements,  candles,  and  con- 
veniences suitable  for  use  in  connect  ion  with  mining  and  metallurgical  operations. 
To  purchase,  lease,  or  otherwise  acquire  lauds  for  the  purpose  of  erecting  thereon, 
office  buildings,  plants,  workshops,  dwelling  houses,  warehouses,  stores,  hotels 
aud  other  buildings  in  connection  with  the  foregoing  purposes. 

FORM   173.  — MINING  INVESTMENTS. 

To  invest  in,  take  over,  buy,  sell,  pledge,  and  exchange  stock,  shares,  bonds, 
and  securities  of  mining  companies,  whether  incorporated  under  the  laws  of  the 
several  commonwealths  or  under  the  laws  of  any  foreign  country  ;  to  make  advances 
upon,  hold  in  trust,  buy  and  sell  on  commission,  sell  or  dispose  of  any  of  the  invest- 
ments aforesaid,  or  to  act  as  auditor  for  any  of  the  above  or  like  purposes.  To 
hold,  purchase,  or  otherwise  acquire,  to  sell,  assign,  transfer,  mortgage,  pledge,  or 
otherwise  dispose  of  shares  of  the  capital  stock,  bonds,  and  securities  issued  or 
created  by  other  corporations,  aud  while  the  holder  thereof  to  exercise  all  the  rights 
and  privileges  of  ownership,  including  the  right  to  vote  thereon.  To  cause  or  allow 
the  legal  title,  estate,  and  interest  in  any  property  acquired,  established,  or  carried 
on  by  the  company  to  remain  or  to  be  vested  or  registered  in  the  name  of  or  carried 
on  by  any  other  company  or  companies,  foreign  or  domestic,  formed  or  to  be  formed, 
and  either  upon  trust  for  or  as  agents  or  nominees  of  this  company,  or  upon  any 
other  terms  or  conditions  which  the  Board  of  Directors  may  consider  for  the  benefit 
of  this  company,  and  to  manage  the  affairs  or  take  over  and  carry  on  the  business  of 
such  company  or  companies  so  formed  or  to  be  formed,  either  by  acquiring  the 
shares,  stocks,  or  other  securities  thereof,  or  otherwise  howsoever,  and  to  exercise 
all  or  any  of  the  powers  of  holders  of  shares,  stocks,  or  securities  thereof, 
and  to  receive  and  distribute  as  profits  the  dividends  and  interest  on  such  shares, 
stocks,  or  securities.  To  guarantee  the  payment  of  dividends  or  interest  on 
any  share,  stocks,  debentures,  or  other  securities  issued  by  or  any  other  contract  or 
obligation  of  any  corporation  when  in  the  judgment  of  its  directors  the  same  is 
proper  or  necessary  for  the  business  of  the  company ;  and  provided  the  required 
authority  be  first  obtained  from  the  Board  of  Directors  for  that  purpose.  To 
remunerate  any  person  or  persons  or  corporation  for  services  rendered  or  to  be 
rendered  in  placing  or  assisting  to  place,  or  guaranteeing  the  placing  of  any  of  the 
shares  of  the  company's  capital,  or  any  debentures  or  other  securities  of  the  company, 
or  in  or  about  the  formation  or  promotion  of  the  company  or  the  conduct  of  its 
business. 

FORM   174.  — MINING  RIGHTS. 

To  search  for,  prospect,  and  explore  for  ores  and  minerals,  and  to  locate 
mining  claims,  grounds,  or  lodes  in  the  United  States  of  America  or  the  territories 
thereof,  or  in  foreign  countries,  and  record  the  same  pursuant  to  the  mining  laws 
of  the  said  United  States  or  other  countries;  and  to  acquire  mining  and  mineral 
rights  or  interest  therein  when  desirable;  to  mine,  quarry,  work,  and  develop  min- 
ing grounds,  claims,  or  lodes,  mining  and  mineral  rights;  to  crush,  concentrate, 
smelt,  refine,  dress,  amalgamate,  and  prepare  for  raarkel  ores,  metals,  and  mineral 
substanc*  s  of  all  kinds,  and  to  do  all  other  acts  and  things  necessary  or  conducive 
to  the  company's  objects,  including  the  erection  of  buildings  or  works  and  the 
installing  01  machinery  and  appliances  of  every  description  whenever  required  ;  to 
mortgage  any  mining  grounds,  claims,  or  lodes,  mining  and  mineral  rights,  or  other 
property  belonging  to  said  company,  and  to  issue  bonds  of  the  company  whenever 
it  may  be  determined  so  to  do.  To  purchase,  acquire  by  lease,  license,  or  otherwise 
mining  grounds,  claims, or  lodes,  mining  and  mineral  rights,  concessions  or  grants, 
or  any  interest,  I  herein,  and  to  obtain  patents  therefor  when  desirable.  To  buy, 
-ill,  and  deal  in  ores  and  minerals,  plants,  machinery,  tools,  implements,  groceries, 
provisions,  clothing,  boots  and   shoes,   furnishing  articles,  hardware,  wooden  and 

637 


INCORPORATION  AND    ORGANIZATION   OF   CORPORATIONS. 

metallic  ware,  with  all  other  articles  and  things  in  any  wise  required  or  capable  of 
being  used  in  connection  with  mining  operations,  and  to  make  and  manufacture 
such  articles  when  required.  To  construct,  carry  out,  maintain,  improve,  equip, 
manage,  control,  and  superintend  auy  roads,  ways,  private  railways,  private  tram- 
ways, bridges,  reservoirs,  water  courses,  aqueducts,  wharves,  piers,  docks,  bulk- 
heads, furnaces,  mills,  crushing,  concentrating,  and  smelting  works,  hydraulic  works, 
factories,  dwelling  houses,  and  warehouses ;  to  purchase  vessels  or  other  means  of 
transportation,  except  railroads  other  than  private  railroads,  and  equip  and  operate 
the  same  as  required  for  the  uses  and  purposes  of  the  company,  and  also  to  do  any 
other  acts  and  things  relating  to  mining. 

FORM   175.  —  MORTGAGE  AND   TRUST. 

To  issue,  secure,  or  offer  for  sale  stocks,  bonds,  mortgages,  and  other  obligations ; 
to  invest  for  individuals  or  corporations  any  stocks,  bonds,  mortgages,  debentures, 
and  securities  of  any  government.  State,  corporation,  —  public  or  private,  —  and  to 
vary  the  investments  of  the  company.  To  transfer,  register,  and  countersign  certifi- 
cates of  stock,  bonds,  receipts,  or  other  evidences  of  indebtedness.  To  act  as  agent 
of  any  corporation,  domestic  or  foreign,  public  or  private.  To  act  as  trustee  under 
any  deed  of  trust,  mortgage,  bond,  or  other  instrument  issued  by  any  municipality, 
body  politic  or  corporate,  person,  or  association,  and  to  accept  and  execute  any 
business  in  relation  thereto.  To  act  as  registrar  of  stocks,  bonds,  certificates,  and 
debentures,  and  as  transfer  agent  of  any  corporations  or  individuals.  To  act  as 
resident  agent  for  domestic  or  foreign  corporations.     (See  also  Form  258.) 

FORM  176.— MOTOR  CARS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  all  kinds  of 
automobiles,  motors,  engines,  machines,  and  all  kinds  of  machinery  and  devices  for 
the  operation  of  steam,  electricity,  and  other  forms  of  power.  To  manufacture, 
buy,  sell,  export,  import,  and  generally  deal  in  cars,  carriages,  wagons,  engines, 
apparatus,  and  vehicles  of  every  kind  and  description  for  the  transportation  of  pas- 
sengers and  goods.  To  manufacture,  buy,  sell,  import,  export,  and  generally  deal 
in  machinery,  machine  supplies,  and  engineering  appliances  incidental  to  the  con- 
struction of  motor  cars. 

FORM  177.— MOTOR  COMPANIES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  motors  run 
and  operated  by  water,  steam,  or  electricity,  including  the  manufacturing,  buying, 
selling,  importing,  exporting,  and  generally  dealing  in  any  and  all  kinds  of  motors 
and  other  parts  and  materials  entered  into  or  used  in  the  manufacture  and  opera- 
tion of  the  same,  and  generally  to  carry  on  the  manufacturing  and  selling  of  any 
articles  or  specialties,  patented  or  otherwise,  which  can  be  carried  on  in  conjunction 
with  any  of  the  matters  aforesaid  in  or  upon  the  premises  of  the  company,  and  for 
that  purpose  to  purchase,  lease,  or  otherwise  acquire  and  sell  real  and  personal 
property,  including  all  necessary  machinery  adapted  to  such  apparatus. 

FORM  178.  -  MUSICAL  INSTRUMENTS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  musical  instru- 
ments of  all  kinds,  classes,  and  descriptions.  Also  to  purchase,  print,  publish,  and 
sell  vocal  and  instrumental  sheet  music. 

FORM  179.  —  NEWSDEALERS. 

To  buy,  sell,  export,  import,  and  generally  deal  in  newspapers,  magazines,  quar- 
terlies, books,  and  periodicals  of  every  character  and  description. 

FORM  180.  —  NEWSPAPERS. 

To  engage  in  business  as  proprietors  and  publishers  of  newspapers  to  be  printed 
at  the  City  of    ^  ,  State  of  ,  and  to  be  known  as  "  ," 

and  in  connection  therewith  to  carry  on  the  business  of  job  printing,  engravers, 
publishers,  lithographers,  and  electro typers. 

638 


FORMS    AND    PRECEDENTS. 


FORM  181. —NICKEL. 


To  prospect  for,  acquire,  lease,  and  develop  lands  containing  or  believed  to  con- 
tain nickel  and  other  ores,  coal,  or  oil.  Also  to  nunc,  mill,  reduce,  smelt,  manu- 
facture, and  prepare  for  market  uiekel  and  other  wares  and  all  or  any  products 
thereof. 

FORM  182.  —  NOVELTIES. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  novelties  of 
every  class  aud  description,  whether  patented  or  otherwise.  To  engage  generally 
in  buying,  selling  of  goods,  wares,  and  merchandise  of  every  class  and  description. 

FORM  183.  —  NURSERIES. 

To  cultivate,  care  for,  grow,  buy,  sell,  export,  import,  and  generally  deal  in  trees, 
shrubs,  vines,  flowers,  and  vegetables  of  every  character  and  descriptiou. 

FORM  184.  —  OFFICE  SUPPLIES. 

To  manufacture,  buy,  sell,  export,  import,  aud  generally  deal  in  desks,  tables, 
chairs,  filing  cases,  cabinets,  safes  and  all  other  kinds  of  office  furniture.  Also  to 
deal  in  writing  papers,  typewriting  paper,  carbons,  books,  and  other  articles  of  a 
similar  nature. 

FORM  185.  —  OIL  AND  PETROLEUM. 

To  locate,  purchase,  lease,  or  otherwise  acquire  lands,  mines,  mineral  claims, 
water  rights  and  franchises,  mill  sites,  timber  lands,  limestone  quarries,  and  particu- 
larlv  lands  containing  or  believed  to  contain  petroleum  and  other  oil  springs  and 
deposits  ;  to  carry  on  the  business  of  searchiug  for,  prospecting,  preparing,  produc- 
ing, refining,  piping,  storing,  transporting,  supplying,  buying,  selling,  manufacturing, 
and  distributing  petroleum  and  other  oils  and  their  products  and  by-products.  To 
construct,  build,  operate,  and  maintain  oil  wells,  refineries,  buildings,  machinery, 
plants,  stores,  and  warehouses.  To  handle,  store,  transport,  and  prepare  for  market 
oils  and  oil  products  and  by-products,  and  to  erect,  maintain,  and  operate  refineries, 
mills,  works,  laboratories,  workshops,  and  dwelling  houses  for  workmen  and  others. 
To  search  for,  prospect,  examine,  refine,  smelt,  reduce,  crush,  concentrate,  manipu- 
late, and  treat  gold,  silver,  lead,  copper,  iron,  and  minerals  of  every  class  and  descrip- 
tion. To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  machinery, 
pumps,  drills,  fuses,  caps,  candles,  implements,  and  conveniences  suitable  for  use  in 
connection  with  the  oil  or  mining  business. 

FORM  186.  —  OIL  AND  PIPE  LINE  COMPANY. 
To  purchase,  lease,  or  otherwise   acquire  lands,  mineral   and   oil  rights  and 
privileges  in  the  State  of  •     Also  to  purchase,  lease,  or  otherwise  acquire, 

in  the'State  of  and  other  parts  of  the  world,  lands  containing  or  believed 

to  contain  petroleum  or  other  oil  spring  deposits.  Also  to  store  and  transport  oil, 
gas,  brine,  and  other  mineral  solutions,  and  to  make  reasonable  charges  therefor. 
To  buy,  sell,  and  furnish  oil  and  gas  for  lighting,  heating,  and  other  purposes.  _  To 
lay  down,  construct,  maintain,  and  operate  pipe  lines,  tubes,  tanks,  pump  stations, 
connections,  fixtures,  storage  houses,  and  such  machinery,  apparatus,  and  devices 
as  may  be  necessary  to  operate  such  pipes  and  pipe  lines  between  various  points. 
Also,  wherever  permitted  by  law,  to  have  right  and  power  to  enter  upon 
rights  of  wav,  easements,  properties  of  all  persons  and  corporations,  and  to  have 
the  right  to 'lay  its  pipes  and  pipe  lines  across  and  under  any  public  road,  railroad, 
right  of  way,  street  railroad,  canal,  or  stream.  To  lay  its  pipe  and  pipe  lines  across 
and  under  anystrect  or  alley  in  any  incorporated  city  or  town,  with  the  consenl  and 
under  the  direction  of  the  proper  authorities  of  such  cities  or  towns.  Also  to  cam 
on  the  business  of  producing,  refining,  and  storing  petroleum  products,  vegetable 
and  mineral  oils. 

FORM  187.  — PAINTS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  paints  and 
painters'  supplies. 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

FORM  188.  — PAINTERS. 

To  carry  on  a  general  painting,  varnishing,  kalsomining,  decorating  and  white- 
washing business.  Also  to  deal  in  paints,  oils,  lime,  cement,  plaster,  wall  paper, 
wainscoting,  and  mouldings. 

FORM  189.  — PAPER. 

To  engage  in  business  as  manufacturers  and  dealers  in  paper,  and  paper  sub- 
stitutes of  all  kinds.  Also  to  buy,  sell,  export,  import,  and  generally  deal  in  wall 
paper,  wood  pulps,  and  all  kinds  of  materials  useful  or  necessary  in  the  manufacture 

of  paper. 

FORM  190.  — PAPER  MANUFACTURERS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  writing  paper, 
wrapping  paper,  newspaper,  and  wall  paper.  Also  in  connection  therewith  to  buy, 
sell,  and  generally  deal  in  rags,  wood  pulp,  and  other  articles  incident  to  the  manu- 
facture of  paper. 

FORM  191.— PASSENGER  AND  BAGGAGE  TRANSFER. 

To  engage  in  the  business  of  transfer  for  hire  within  the  city  of 
(or  between  certain  designated  cities)  passage,  baggage,  and  freight.  Also  to 
purchase,  lease,  or  otherwise  acquire  carriages,  coupes,  hansoms,  automobiles,  bag- 
gage, express  and  mail  wagons,  carts,  and  drays.  Also  to  purchase  horses,  barns, 
and  warehouses  in  order  to  facilitate  the  carrying  on  of  the  above  lines  of  business. 
Also  to  store  and  care  for  all  kinds  of  vehicles,  trunks,  and  personal  property  of 
every  description  in  connection  therewith.  To  operate  and  maintain  one  or  more 
barns,  warehouses,  and  storerooms. 

FORM  192.  — PATENTS. 

To  establish,  conduct,  and  carry  on  the  business  of  buying,  selling,  and  other- 
wise dealing  in  improvements,  trade  marks,  trade  names,  and  any  letters  patent, 
registration,  or  grants,  both  domestic  and  foreign,  whether  issued  by  the  United 
States  or  any  foreign  country  or  government.  To  apply  for,  procure,  and  obtain 
any  and  all  necessary  letters  patent  or  grants,  both  foreign  and  domestic,  for  all 
inventions,  improvements,  and  secret  processes  for  the  account  and  in  the  name  of 
the  corporation,  or  as  the  agent  for  any  person,  firm,  or  corporation.  To  exploit 
and  develop  any  and  all  such  inventions,  improvements,  trade  marks,  and  processes 
by  establishing'in  this  or  any  foreign  country  any  and  all  necessary  plants,  factories, 
and  machinery  for  the  manufacture  of  patent  articles  of  any  class,  nature  or 
description. 

FORM  193.  —  PHONOGRAPHS. 

To  manufacture,  buy,  sell,  export,  import,  lease,  or  otherwise  acquire,  invest, 
and  generally  trade  in  sound-reproducing  machines,  talking  machines,  and  records 
for  such  machines,  and  all  appurtenances  thereto,  together  with  all  rights,  patents, 
and  improvements  thereon,  now  held  or  hereafter  to  be  obtained  by  purchase  or 
otherwise,  including  all  necessary  machinery  adapted  for  such  purposes. 

FORM  194.  — PHOTOGRAPHY. 

To  carry  on  a  general  photographic  business  in  all  its  various  branches  within 
the  city  of  .     To  purchase,  lease,  or  otherwise  acquire  the  necessary 

chemicals,  screens,  drugs,  cameras,  and  apparatus  for  the  taking,  developing,  and 
finishing  of  all  kinds  of  photographs.  To  purchase,  sell,  and  generally  deal  in 
cameras,  photographic  supplies,  pictures,  picture-frames,  prints,  drugs,  chemi- 
cals, and  supplies  necessary  or  useful  in  the  taking,  development,  and  printing  of 
photographs. 

FORM  195.  — PIANOS  AND  MUSICAL  INSTRUMENTS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  pianos,  pianolas, 
church  and  cottage  organs,  violins,  and  brass  and  string  musical  instruments  of  every 
class  and  description. 

640 


FORMS    AND    PRECEDENTS. 


FORM    196.  —  PERFUMERS. 


To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  iu  perfumery, 
cologne,  toilet  waters,  cold  cream,  talcum  powder,  and  cosmetics  of  every  class  and 
description. 

FORM  197.  —  PIPE  FOUNDRY. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  water  pipe, 
sewer  pipes,  faucets,  and  plumbers'  supplies  of  every  class  and  description. 

FORM  198.  —  PLANTATION  COMPANY. 

To  engage  iu  the  buying,  selling,  raising,  importing,  and  exporting  of  truit  and 
vegetable  products.  To  cultivate,  plant,  produce,  buy,  sell,  and  raise  all  kinds  of 
vegetable  products.  To  do  a  general  importing  and  exporting  business  by  and 
between  domestic  and  foreign  ports,  and  also  a  general  coastwise  business  to  do- 
mestic ports. 

FORM    199.  — POULTRY. 

To  engage  in  the  business  of  raising,  selling,  and  preparing  for  market  all 
poultry  and  eggs.  To  purchase,  lease,  or  otherwise  acquire  land,  buildings,  and 
necessary  equipment  for  the  carrying  on  of  the  aforesaid  business.  To  buy  and 
sell  chicken  food  and  incubators.  To  buy,  sell,  import,  export,  and  generally  deal 
iu  poultry  and  poultry  products  of  every  kind,  class,  and  description.  To  hatch, 
breed,  and  raise,  either  by  natural  means  or  incubators,  poultry  of  every  kind,  class, 
and  description.  To  buy  and  sell  chickens,  ducks,  geese,  and  guinea-fowls.  To 
print,  publish,  and  distribute  magazines  and  literature  of  every  class  and  description. 

FORM    200.  —  PRINTERS. 

To  carry  on  the  business  of  job  printers,  publishers,  electrotypers,  lithographers, 
and  linotypers. 

FORM    201.  —  PRODUCE. 

To  buy,  sell,  export,  import,  and  generally  deal  iu  hay,  oats,  corn  meal,  barley, 
buckwheat,  wheat,  bran,  middlings,  shorts,  and  farm  produce  of  every  character 
and  description. 

FORM  202.  —  PROVISION  DEALERS. 

To  buy,  sell,  export,  import,  and  generally  deal  in  hams,  canned  goods,  poultry, 
fruit,  vegetables,  and  groceries  of  every  class  and  description. 

FORM    203.  —  PUBLISHERS. 

To  engage  in  business  as  proprietors  and  publishers  of  newspapers,  journals,  and 
magazines.  To  acquire,  print,  publish,  conduct,  or  otherwise  deal  with  any  news- 
paper, magazine,  books,  or  other  publications  ;  to  carry  on  the  business  of  news- 
paper and  magazine  proprietors  and  publishers.  To  carry  on  the  business  of  job 
printers,  lithographers,  electrotypers,  engravers,  and  advertising  agents. 

FORM  204.  -  QUARRY. 

To  acquire,  mine,  cut,  finish,  buy,  sell,  import,  export,  and  generally  deal  in 
marble,  and  all  kinds  of  building  and  paving  shines.  Also  to  acquire  by  purchase, 
lease,  or  otherwise  lands  believed  to  contain  marble,  building,  and  paving  stone. 

FORM  205.  —  RAILWAY    EQUIPMENT. 

To  buy,  lease,  or  otherwise  acquire,  construct,  maintain,  and  operate  Bmelters, 

rolling  mills,  carriages,  machine  shops,  furnaces,  crushing  works,  and  hydraulic  works 
of  every  class  and  description  ;  to  manufacture,  buy,  sell,  import,  export, and  gener- 
ally  deal  in  all  kinds  of  rails,  tics,  switches,  signals,  torpedoes,  fuses,  engines,  and 
supplies  for  railroads  and  street  railways;  to  manufacture,  buy,  import,  export,  and 
generally  deal  in  iron,  steel,  aluminum,  manganese,  lead,  zinc,  tin,  copper,  and 
lumber. 

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INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

FORM    206.  — REAL    ESTATE.     (City.) 

To  purchase,  lease,  or  otherwise  acquire,  sell,  and  exchange  lands,  tenements, 
and  hereditaments,  situated  in  the  city  of  and  vicinity  ;  also  to  build,  con- 

struct, reconstruct,  alter,  furnish,  equip,  and  maintain  thereon  offices,  apartment 
houses,  business  blocks,  buildings,  shops,  and  structures  of  all  kinds  for  others  on 
commission  or  otherwise.  Also  to  manage  business  blocks,  apartment  houses  for 
owners,  and  to  guaranty  the  income  thereof,  and  to  collect  rents  therefrom,  and  to 
supply  to  tenants  and  others  janitor  service,  light,  heat,  and  power  appliances, 
messenger  and  elevator  service.  Also  to  assist  financially  or  otherwise  contractors 
and  builders  engaged  in  the  business  of  building  or  improving  any  lands  wherever 
situated. 

FORM  207. —REALTY. 

To  buy,  sell,  exchange,  and  generally  deal  in  real  properties,  improved  and 
unimproved,  office  buildings,  store  buildings,  dwelling  houses,  barns,  wharves, 
water  rights  and  privileges  ;  to  build,  construct,  operate,  maintain,  lease,  and  sell 
dwelling  houses,  apartment  houses,  and  business  blocks  of  all  kinds  and  descriptions. 
To  maintain  a  general  real  estate  agency  and  broker's  business,  including  the  right 
to  manage  estates,  to  act  as  agent,  broker,  or  attorney  in  fact  for  any  person  or  cor- 
poration ;  to  make  and  obtain  loans  upon  real  estate,  improved  or  unimproved,  and 
to  supervise,  manage,  and  protect  such  property  and  loans,  and  all  interests  and 
claims  affecting  the  same  ;  to  have  the  same  insured  against  fire  and  other  casual- 
ties ;  to  investigate  the  credit,  financial  solvency  and  sufficiency  of  borrowers, 
mortgagors,  and  sureties  upon  bonds,  mortgages,  and  undertakings.  To  improve, 
manage,  operate,  sell,  mortgage,  lease,  or  otherwise  dispose  of  any  property,  real 
or  personal,  and  take  mortgages  and  assignments  of  mortgages  upon  the  same. 

FORM  208.  —  REDUCTION  COMPANY. 

To  buy,  lease,  or  otherwise  acquire,  construct,  maintain,  and  operate  plants  of 
every  nature  and  description,  for  the  purpose  of  extracting  refactory  ores  and 
minerals  of  every  description. 

FORM  209.— REFINERIES. 

To  buy,  lease,  or  otherwise  acquire  lands  containing  or  believed  to  contain 
petroleum,  natural  gas,  oil  springs,  or  mineral  deposits ;  to  carry  on  the  business  of 
producing,  refining,  storing,  supplying,  and  distributing  petroleum  products  of  all 
classes  and  descriptions ;  to  refine,  store,  distribute,  and  sell  vegetable  and  mineral 
oils ;  to  purchase  or  otherwise  acquire,  lease,  construct,  operate,  and  maintain  re- 
fineries, mill  works,  laboratories,  pipe  lines,  storage  tanks,  dwelling  houses  for 
workmen  and  others  in  connection  with  the  purposes  hereinbefore  set  forth. 

FORM    210. —RESTAURANTS. 

To  purchase,  lease,  own,  and  operate  restaurants  and  lunch  stands  in  the  city 
of  .     Also  to  buy  and  sell  cigars  and  liquors. 

FORM  211.  —  ROOFERS. 

To  erect,  prepare,  and  construct  wooden,  metallic,  concrete,  tin,  and  slate  roofs 
of  every  character  and  description. 

FORM  212.  — RUBBER   COMPANY. 

To  acquire  by  purchase,  lease,  exchange,  or  otherwise  lands,  tenements,  here- 
ditaments, and  property  of  every  class  and  description,  for  the  planting,  cultivation, 
and  growing  of  rubber  trees,  and  for  the  purpose  of  producing,  buying,  exporting, 
importing,  selling,  and  generally  dealing  in  rubber,  and  the  articles  and  goods  of 
all  kinds  of  which  rubber  is  a  component  part,  together  with  the  various  materials 
which  enter  into  the  manufacture  of  such  goods.  To  carry  on  the  business  of 
planters.  To  purchase,  or  otherwise  acquire,  manufacture,  prepare  for  market, 
export,  import,  and  sell  any  products  or  by-products  of  rubber,  and  to  sell,  dispose 

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FORMS   AND    PRECEDENTS. 

of,  and  generally  deal  in  the  same,  either  in  their  prepared,  manufactured,  or  taw 
state,  both  at  wholesale  and  retail. 

FORM  213.  — SALOONS. 

To  operate  and  maintain  liquor  saloons,  bar  rooms,  beer  gardens,  cafes,  res- 
taurants, cigar  stands,  boot-blacking  parlors,  and  picnic  grounds. 

FORM  214.  — SALT. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  salt  and  the 
products  thereof.  Also  to  acquire  by  purchase,  lease,  or  otherwise  lauds  believed  to 
contain  salt  and  other  minerals. 

FORM  215.— SANITARIUMS. 

To  build,  construct,  purchase,  lease,  or  otherwise  acquire,  equip,  and  maintain 
sanitariums  for  the  treatment  and  care  of  the  sick,  disabled,  and  infirm.  To 
maintain  in  connection  therewith  dispensaries,  hotels,  and  training  schools  for  nurses. 

FORM  216.  — SASHES,  DOORS,  AND  BLINDS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  sashes,  doors, 
blinds,  window  sills,  mouldings,  wainscoting  and  ornamental  woods  of  every  class 
and  description. 

FORM  217.  — SAUCES  AND  PICKLES. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  sauces,  catsups, 
relishes,  pickles,  and  garnishing  supplies  ;  to  buy,  lease,  or  otherwise  acquire,  con- 
struct, maintain,  and  operate  sauce  and  pickle  factories,  cold-storage  receptacles, 
warehouses,  and  depots.     To  raise  vegetables  and  fruits  of  all  classes  and  descriptions. 

FORM    218.  —  SAW-MILLS. 

To  purchase,  lease,  or  otherwise  acquire  timber-lands,  tracts,  and  rights.  To 
buy,  sell,  export,  import,  boom,  saw,  and  prepare  for  market,  and  generally  deal  in 
timber  and  wood  of  all  kinds.  Also  to  manufacture,  buy,  sell,  export,  import,  and 
generally  deal  in  all  kinds  of  goods  and  articles  manufactured  from  wood,  and 
generally  to  carry  on  business  as  saw-mill  proprietors,  timber  and  lumber  dealers. 

FORM    219.  — SCALING. 

To  scale  steam  boilers,  bilges,  water  tanks,  and  kindred  articles ;  to  clean  and 
furnish  shafts  and  tunnels ;  to  build  wells  and  kindred  articles,  and  to  do  all  kinds 
of  repair  work  ;  to  build,  repair,  own,  buy,  and  sell  scaling  works  and  shops  of 
every  nature  and  description ;  to  manufacture,  buy,  sell,  import,  export,  and  gen- 
erally deal  in  engines,  boilers,  shop  machinery,  fixtures,  and  supplies,  aud  all  kinds 
of  heavy  hardware. 

FORM  220.  —  SEPARATORS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  separating 
machines  of  all  kinds,  classes,  and  descriptions  ;  to  buy,  lease,  or  otherwise  acquire, 
construct,  operate,  and  maintain  factories,  workshops,  warehouses,  and  depots 
for  the  manufacture  of  separating  machines. 

FORM    221.  — SEWING  MACHINES. 

To  manufacture,  buy,  Bell,  import,  export,  and  generally  deal  in  sewing  ma- 
chines  of  all  kinds,  and  all  tools  and  appliances  appertaining  thereto. 

FORM  222.  — SHEEP. 

To  carry  on  in  all  its  branches  a  general  live-stock  and  stock-raising  farm  and 
range  business;  to  buy,  sell,  breed,  raise,  export,  import,  and  generally  deal  in 

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INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

sheep,  cattle,  horses,  poultry,  and  all  kinds  of  domestic  animals.  To  buy,  lease,  or 
otherwise  acquire,  construct,  maintain,  and  operate  slaughter-houses,  factories, 
stock  yards,  and  to  carry  on  a  dairy  business  in  all  its  several  branches. 

FORM  223.  — SHIP  BROKERS  AND  CHANDLERS. 

To  carry  on  in  all  its  various  branches  the  business  of  ship  brokers  and 
chandlers. 

FORM  224.  — SHIP  BUILDING. 

To  build,  operate,  and  maintain  docks,  wharves,  water  ways,  machine  shops  and 
lumber  yards  for  the  purpose  of  constructing  steamships,  sailing  vessels  and  all  kinds 
of  sailing  craft. 

FORM  225.  —  SHIRT  MANUFACTURERS. 

To  make,  buy,  sell,  export,  import  and  generally  deal  in  shirts  and  gentlemen's 
•wearing  apparel  of  every  description. 

FORM  226.  — SILK. 

To  manufacture,  produce,  export,  import,  buy,  sell,  and  generally  deal  in^  silk 
and  other  fabrics;  to  raise  silkworms  and  cocoons,  aud  deal  in  each  and  all  of  the 
products  thereof;  to  manufacture,  buy,  sell,  import,  export,  aud  generally  deal  in 
cocoon  yarn,  thread,  and  other  like  material,  and  to  spin,  weave,  and  handle  the 
same  and  deal  with  other  fabrics.  To  plant,  raise,  buy,  and  sell  cotton  plants  and 
convert  the  same  into  fabrics.  To  plant  and  raise  mulberry  trees  and  other  silk- 
worm foods. 

FORM  227.— SILVERSMITHS  AND  PLATED  WARE. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  silver  ware,  gold 
ware,  copper,  tin,  bronze,  and  plated  ware  of  every  character  and  description. 

FORM  228.  — SLATE  AND  TILE. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  slate,  stone,  tile, 
brick,  marble,  and  building  materials  of  all  kinds  aud  descriptions. 

FORM  229.— SLAUGHTER-HOUSES. 

To  raise  and  purchase  cattle,  hogs,  and  sheep  for  the  purpose  of  fattening  the 
same  for  food  purposes.  Also  to  carry  on  the  business  of  maintaining  and  operat- 
ing slaughter-houses  for  the  purpose  of  slaughtering  cattle,  hogs,  and  sheep.  To 
operate  and  maintain  stock  yards,  cold-storage  plant,  and  warehouses.  To  buy  and 
sell  hay,  oats,  bran,  corn,  alfalfa,  and  other  grains,  grasses,  and  cereals.  Also  to 
engage  in  the  manufacture  and  production  of  hides,  oil,  glue,  and  animal  fertilizers 
of  all  kinds  and  descriptions. 

FORM  230.  — SLOT  MACHINES. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  slot  machines  of 
whatsoever  name  and  nature;  to  manufacture,  buy,  sell,  import,  export,  and  gen- 
erally deal  in  all  articles,  apparatus,  plants,  and  machinery  useful  in  or  which  may 
be  used  in  connection  with  the  foregoing  described  business  or  any  of  its  branches. 

FORM  231.  — SOAP. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  soap  for  toilet 
and  domestic  use.  Also  to  purchase  all  materials  suitable  or  necessary  for  the 
proper  manufacture  of  soap. 

FORM  232.  —  SPORTING  GOODS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  base  balls, 
tennis,  football,  golf,  fishing,  rowing  aud  sporting  goods  of  every  class  and 
description. 

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FORMS    AND    PRECEDENTS. 

FORM  233.  —  STATIONARY  ENGINES. 

To  manufacture,  construct,  purchase,  or  otherwise  acquire,  deal  in,  sell,  hire, 
lease,  use,,  repair,  operate,  and  maintain  stationary  engines  and  engines  or  power- 
applying  machinery  and  devices  of  any  and  every  character,  and  any  and  all  parts, 
devices,"  appliances,  instruments,  and  thiugs  adapted  for  use  in  the  construction 
of,  upou,  ur  in  connection  with  or  in  the  operation  of  such  stationary  engines  and 
entities  or  power-applying  machinery  and  devices  of  any  and  every  character. 

FORM  234.  —  STEAMBOATS. 

To  buy,  lease,  or  otherwise  acquire,  construct,  maintain,  aud  operate  steamboats 
and  other' vessels  of  any  class  ;  to  establish  aud  maintain  liues  of  regular  service  of 
steamboats  and  other  vessels  to  be  employed  in  inland  or  coastwise  service  in  the 
United  States  aud  between  the  ports  of  the  United  States  and  foreign  countries. 
To  carry  ou  the  business  of  shipowners,  and  to  enter  into  contracts  for  the  carriage 
of  mails,  passengers,  goods,  and  merchandise  by  any  means,  either  by  its  own  vessels, 
railways,  or  conveniences  or  by  or  over  the  vessels,  railways,  or  conveniences  of 
others.  To  insure  against  loss  by  fire,  flood,  or  other  calamity  the  cargo  carried 
or  transported  upon  the  company's  steamboats  or  other  vessels,  aud  upon  such 
steamboats  and  vessels  themselves'.  To  buy,  lease,  or  otherwise  acquire,  construct, 
maintain,  and  operate  wharves,  piers,  docks,  warehouses,  aud  depots ;  to  manufac- 
ture, buy,  sell,  and  generally  deal  in  all  kinds  of  materials,  articles,  machinery, 
engines,  boilers,  and  furniture  entered  into  or  suitable  or  convenient  for  the  con- 
struction, equipment,  and  operation  of  steamboats  and  other  vessels;  to  design, 
construct,  and  repair  vessels,  ships,  boats,  wharves,  docks,  dry  docks,  and  piers. 
To  carry  ou  the  business  of  cold-storage  warehouse  and  any  business  incidental  or 
impliedly  incidental  thereto.  To  issue  certificates,  negotiable  or  otherwise,  to  per- 
sons warehousing  goods  with  the  corporation,  and  to  make  advances  or  loans  upon 
the  security  of  such  goods  or  otherwise. 

FORM  235.  —  STEEL  LATH  AND   FIREPROOFING  COMPANY. 

To  manufacture,  sell,  import,  export,  and  generally  deal  in  all  kinds  of  sheet- 
steel  lath  suitable  for  the  fireproofing  of  buildings  and  structures  of 'every  kind 
and  description;  to  manufacture,  sell,  import,  export,  and  generally  deal  in  sheet 
iron  and  steel  of  all  kinds  and  descriptions ;  to  carry  on  the  business  of  contractors 
aud  builders  in  all  the  various  branches  of  said  business. 

FORM  236. —STEEL   MANUFACTURE.     (Part  of  charter  of  U.   S.   Steel 

Corporation.) 

To  mine,  prepare  for  market,  and  transport  coal,  iron,  steel,  and  all  mineral  sub- 
stances. To  manufacture,  buv,  sell,  and  deal  in  iron,  steel,  copper,  manganese, 
lumber,  and  other  materials,  and  all  or  any  articles  consisting  or  partly  consist- 
ing of  iron,  steel,  copper,  wood,  or  other  materials,  and  all  or  any  products  there- 
of. To  acquire,  own,  lease,  occupy,  use,  and  develop  any  lands  containing  coal 
or  iron,  manganese,  stones,  or  other  ores  or  oil,  and  any  woodlands  or  other  lauds  for 
any  purpose  of  the  company.  To  mine  or  otherwise  extract  or  remove  coal,  ore, 
stone,  and  other  minerals  and  timber  from  any  lands  owned,  acquired,  leased,  or 
occupied  bv  I  he  company,  or  from  any  other  lands.  To  buy,  sell,  or  otherwise  deal 
or  traffic  iii  iron,  steel,  manganese,  copper,  stone,  ores,  coal,  coke,  wood,  lumber, 
and  other  materials  and  any  of  the  products  thereof,  and  any  articles  consisting  or 
partly  consisting  thereof.  To  promote,  construct,  divide,  acquire,  approve,  manage, 
develop,  control,  take  on  lease  or  agreement,  sell  and  use,  work  and  dispose  of  ai,v 
roads,  sidinps,  private  railways,  pipe  lines,  wharves,  docks,  bridges,  reservoirs, 
canals,  water  courses,  hydraulic  works,  pas  works,  electrical  works,  mills,  foundries. 
furnaces,  warehouses,  ships,  buildings,  buildings  for  employees  and  others,  and  other 
works  and  appliances-  To  construct,  lease,  own,  operate,  and  sell  transportation 
rights  by  land  or  water  iii  any  State  or  country  subject  to  the  laws  thereof,  either 
directly  or  through  the  ownership  of  stock  in  any  corporation.  To  manufacture, 
purchase,    lease,    acquire,  and  own  goods,  wares,  and  merchandise  and  personal 

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INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

property  of  every  class  and  description.  To  hold,  own,  sell,  and  otherwise  dispose 
of,  trade,  deal  in,  and  deal  with  the  same.  To  acquire  aud  undertake  the  good 
will,  property,  rights,  franchises,  and  assets  of  every  kind  and  the  liabilities  of  any 
person,  firm,  or  association,  either  wholly  or  partly,  and  to  pay  for  the  same  in  cash, 
stock,  or  bonds  of  the  company  or  otherwise.  To  the  extent  permitted  by  the 
local  laws  of  any  State  or  foreign  country  where  the  property  may  be  situated, 
the  company  may  cause  or  allow  the  legal  title,  estate,  aud  interest  in  any  property, 
or  business  acquired  or  carried  on  by  the  company  to  remain  or  be  vested  or  regis- 
tered in  the  name  of  or  carried  on  by  an  individual,  or  to  be  operated  by  another 
company  or  companies,  foreign  or  domestic,  formed  or  to  be  formed,  and  either 
upon  trust  for  or  as  agents  of  this  company  or  upon  any  other  terms  and  condi- 
tions which  the  board  of  directors  may  consider  for  the  benefit  of  this  company, 
to  manage  the  affairs  so  taken  over.  To  carry  on  the  business  of  such  company  or 
companies  so  formed  or  to  be  formed,  either  by  acquiring  the  stock  or  other  secu- 
rities thereof,  and  acquire  all  or  any  of  the  powers  of  holders  of  shares,  stock,  or 
securities  thereof,  and  receive  and  distribute  dividends  on  such  stock,  shares,  and 
spoii  n  tics* 

FORM  237.  — STEREOPTICON  MACHINES. 

To  manufacture,  construct,  buy,  sell,  import,  export,  and  generally  deal  in 
stereopticon  machines,  whether  automatic  or  otherwise,  of  all  kinds  and  descrip- 
tions ;  and  in  connection  therewith  to  buy,  sell,  lease,  or  otherwise  acquire  suitable 
stores,  space  in  expositions  and  fairs,  and  concessions  of  all  kinds. 

FORM  238.— STEVEDORES. 

To  carry  on  business  as  stevedores  in  the  city  of  and  vicinity,  and 

in  connection  therewith  to  buy  and  sell  trucks,  wheelbarrows,  hoisting  machin- 
ery, apparatus,  donkey  engines,  draft  animals  and  all  kinds  of  appliances  necessary, 
useful,  or  convenient  to  the  proper  transaction  of  the  business  of  stevedores. 

FORM  239.  — STOCK  BROKERS. 

To  buy,  sell,  negotiate,  exchange,  pledge,  trade,  and  deal  in  and  with  shares, 
stocks,  debentures,  scrip,  bonds,  and  securities  of  any  government,  state,  or  public 
or  private  corporation  or  any  corporate  body ;  to  trade  and  deal  in  and  with  real 
estate,  mines,  metals,  minerals,  and  oil,  cotton,  grain,  produce,  or  other  commod- 
ities ;  to  invest  in  any  or  either  of  the  foregoing,  and  from  time  to  time  to  change 
the  investments  of  the  company ;  to  mortgage,  pledge,  or  otherwise  change  all  or 
any  part  of  the  investments  of  the  company  or  its  property  and  rights;  to  make 
advances  on,  sell  or  dispose  of,  any  property  or  investments,  or  to  act  as  agent, 
factor,  or  broker  for  any  or  either  of  the  corporate  purposes.  To  purchase  or  other- 
wise acquire  the  capital  stock,  shares,  debentures,  scrip,  bonds,  or  other  evidence 
of  indebtedness  of  any  other  corporation,  and  to  issue  in  exchange  its  own  stock, 
shares,  bonds,  debentures,  scrip,  or  other  evidences  of  indebtedness  in  payment 
therefor,  and  while  the  owner  thereof  to  exercise  all  the  rights  of  ownership, 
including  the  power  to  vote  upon  such  stock  or  shares.  To  purchase,  receive, 
hold,  and  own  mortgages,  debentures,  shares,  and  other  securities  or  obligations 
of  any  public,  private,  or  municipal  corporation,  or  bonds  or  other  securities  or 
obligatious  of  the  government  of  the  United  States,  or  of  any  State,  district,  ter- 
ritory, colony,  or  dependency  of  the  United  States  or  any  foreign  country,  State, 
or  colony ;  to  collect  and  receive,  disburse  and  dispose  of,  all  interest,  dividends, 
accumulations,  earnings,  and  income  from,  upon,  or  on  account  of  any  bonds,  deben- 
tures, stocks,  shares,  securities,  contracts,  evidences  of  indebtedness,  obligatious,  or 
other  property  held  or  owned  by  the  corporation  therein ;  to  do  any  aud  all  lawful 
acts  tending  to  increase  or  enhance  the  value  of  the  property  of  the  company. 
To  issue  stock,  shares,  bonds,  debentures,  certificates,  scrip,  or  other  corporate 
obligations  and  to  secure  the  payment  thereof  by  mortgage,  pledge,  or  deed  of 
trust  of  or  upon  the  whole  or  auy  portion  of  the  corporate  property  or  funds ; 
to  sell,  pledge,  or  otherwise  dispose  of  bonds,  debentures,  or  other  corporate 
obligations  for  proper  and  lawful  purposes,  as  and  when  the  Board  of  Directors 
shall  deem  necessary,  advisable,  or  expedient ;  to  promote  the  corporate  business 

646 


FORMS   AND   PRECEDENTS. 

of  investment  and  dealing  in  securities  in  all  lawful  ways;  and  to  receive,  col- 
lect, transmit,  pav  out,  and  disburse  funds  in  the  course  of  its  business;  and  to 
the  extent  authorized  bv  law  to  lease,  purchase,  or  otherwise  acquire,  hold,  use, 
sell,  trade,  and  deal  in  and  with,  assign,  pledge,  mortgage,  transfer,  and  convey- 
real  and  personal  property  of  any  name  or  nature  ;  to  issue  and  accept  drafts, 
bills  of  exchange,  promissory  notes,  scrip,  drafts,  acceptances,  or  other  corporate 
obligations  and  negotiate  the  same. 

FORM  240.— STORAGE  BATTERIES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  electrical  stor- 
age batteries,  machineries,  and  appliances  for  the  storage  of  electricity  for  the  pur- 
poses of  furnishing  power  for  business  or  domestic  purposes. 

FORM  241.  — STORAGE  WAREHOUSES. 

To  build,  construct,  maintain,  and  operate  warehouses  for  the  storage  of  goods, 
■wares,  and  merchandise  of  every  character  and  description. 

FORM  242.  — STOVES,  RANGES,   AND  HEATERS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  stoves,  furnaces, 
ranges,  and  steam  and  hot  water,  gas  and  electric  heaters  of  every  character  and 

description. 

FORM  243.  — SUGAR  REFINERIES. 

To  plant,  cultivate,  grow,  produce,  manufacture,  buy,  sell,  export,  import,  and 
generally  deal  in  sugar.  Also  to  purchase,  lease,  or  otherwise  acquire  sugar  lands 
and  plantations,  refineries,  buildings,  mills,  and  machinery.  To  plant,  cultivate, 
produce,  and  raise  sugar  cane.  Also  to  carry  on  the  business  of  refining,  prepar- 
ing, buying,  selling,  importing,  exporting,  and  generally  dealing  in  sugar  cane, 
sugar  mills,  and  syrups. 

FORM  244.— SURGICAL  INSTRUMENTS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  surgical  and 
dental  instruments  of  every  character  and  description. 

FORM  245.  —  TAILORS. 

To  carry  on  the  business  of  tailoring  and  dealing  in  cloth  and  clothes  and  all 
kinds  of  gents'  furnishing  goods. 

FORM  246.  — TAR  MANUFACTURING. 

To  purchase,  lease,  or  otherwise  acquire  lands  for  the  erection  and  establish- 
ment of  a  manufactory  or  manufactories  and  workshops  with  suitable  plants, 
engines,  and  machinery,  with  a  view  to  manufacturing,  purchasing,  leasing,  or  other- 
wise dealing  in  coal  tar,  and  each  and  every  by-prodnct  of  coal  tar,  utilizing  the 
same  in  any  condition,  connection,  or  form  whatsoever  ;  to  manufacture,  purchase, 
lease,  export,  import,  and  generally  deal  in  coal  tar  and  any  by-product  thereof,  and 
any  materials,  articles,  and  things* required  for,  or  in  connection  with  or  incidental 
to  the  manufacturing  thereof. 

FORM  247.  —  TEA,   COCOA,   AND   COFFEE. 

To  cultivate,  raise,  export,  import,  buy,  sell,  and  generally  deal  in  all  kinds  of 
tea,  coffees,  and  cocoas. 

FORM  248.  — TELEGRAPH  AND  TELEPHONE  COMPANIES. 

To  acquire,  manufacture,  buy,  Bell,  and  generally  deal  in  telegraph  and  tele- 
phone instruments,   machines,  and   apparatus;   to  construct,   erect,   build,  operate, 

and  maintain  telegraph  and  telephone  stations  for  the  transmission  and  reception 
of  messages  by  electricity,  wire,  or  wireless  instruments ;  to  receive  and  transmij 
messages  by  signal  or  other  device  and  by  any  and  all  other  electrical  devices  anil 
contrivances  from,  upon,  and  by  wire  or  wireless    instruments  and  any  and  all 

647        ' 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

similar,  kindred,  and  like  instruments  and  devices ;  to  transmit  and  receive  mes- 
sages for  hire  over,  upon,  and  by  wire  and  wireless  systems,  of  telegraphing  and 
telephoning  by  any  and  all  systems  and  devices  for  transmitting  and  receiving 
messages.  To  buy,  build,  or  cause  to  be  built,  operate,  and  maintain  stations 
for  the  transmission  and  reception  of  telegraph  and  telephone  messages  by  means 
of  wire  or  wireless  systems;  to  carry  on  the  business  of  transmitting  and  receiving 
messages  from  such  stations.  To  acquire  and  hold  lauds,  property,  and  buildings 
necessary  or  useful  in  the  conduct  of  the  business  of  telegraph  and  telephone  com- 
panies under  wire  and  wireless  systems,  and  in  connection  therewith  to  manufac- 
ture and  construct  machinery,  instruments,  apparatus,  wires,  and  any  and  all  other 
materials  and  articles  used  with  or  pertaining  to  telegraph  and  telephone  lines. 

FORM  249.  —  THEATRES. 

To  construct,  purchase,  lease,  or  otherwise  acquire  theatres,  concert  halls,  and 
amusement  places  of  all  kinds  and  descriptions.  Also  to  carry  on  the  business  of 
theatrical  proprietors,  and  music  hall  proprietors.  Also  to  manage  theatrical,  con- 
cert hall,  and  vaudeville  companies  of  all  kinds,  classes,  and  descriptions.  Also  to 
engage  and  employ  actors,  singers,  dancers,  athletic,  theatrical,  and  musical  artists 
of "aU  kinds.  Also  to  purchase,  own,  produce,  and  present,  and  to  license  others 
to  produce  and  present,  theatrical  plays,  operas,  and  exhibitions  of  various  kinds. 

FORM  250.— TILES. 
To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  tiles,  flower 
pots,  brick  and  stone  ware  of  every  character  and  description. 

FORM  251.  — TOOLS. 
To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  trade  tools  of 
every  character  and  description. 

FORM  252.  — TOY  M AN  LTFACTURERS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  toys  and  chil- 
dren's playthings  of  every  character  and  description. 

FORM  253.  — TRADING  STAMP  COMPANY. 

To  design,  manufacture,  print,  and  engrave  premium  stamps,  tickets,  or  coupons, 
and  to  use,  sell,  or  otherwise  dispose  of  the  same  to  merchants,  manufacturers,  or  to 
any  person,  firm,  copartnership,  or  corporation,  for  distribution  or  sale  by  them  to 
their  customers ;  to  exchange  such  stamps,  tickets,  or  coupons  for  goods,  chattels, 
wares,  and  merchandise  ;  to  co-operate  and  contract  with  merchants,  manufacturers, 
copartnerships,  corporations,  or  other  persons  for  the  purpose  of  furnishing  them 
witli  premium  stamps,  tickets,  or  coupons  for  their  customers,  and  to  give  them 
goods,  chattels,  wares,  and  merchandise  in  exchange  for  such  premium  stamps, 
tickets,  or  coupons ;  to  carry  on  a  general  advertising  business  in  all  its  branches, 
both  as  principals  and  agents ;  to  carry  on  the  business  of  printers,  stationers,  en- 
gravers, designers,  and  dealers  in  paper ;  to  establish  and  conduct  a  general  store 
for  the  sale  or  exchange  of  goods,  chattels,  wares,  and  merchandise  of  any  and 
every  class  and  description. 

FORM  254.  — TRAIN  CONTROL. 

To  manufacture,  buy,  sell,  import,  export,  install,  maintain,  and  generally  deal 
in  railroad  switches,  train-controlling  devices,  signals,  and  equipment ;  to  manufac- 
ture, buy,  sell,  export,  import,  and  generally  deal  in  iron,  steel,  manganese,  coke, 
copper,  lumber,  and  all  or  any  articles  consisting  or  partly  consisting  of  iron,  steel, 
copper,  wood,  or  other  materials,  and  all  or  any  products  thereof ;  to  acquire  by 
purchase  or  otherwise  land  or  buildings,  mills,  plants,  machinery,  secret  processes, 
or  other  things  found  necessary  or  convenient  for  the  purposes  of  the  company. 
To  manufacture  or  purchase,  or  both,  all  tools,  machinery,  and  appliances  necessary, 
proper,  or  convenient  for  the  carrying  on  of  the  said  business. 

648 


FORMS    AM)    PRECEDENTS. 

FORM  255.  — TRANSPORTATION  COMPANY. 

To  carry  on  the  business  of  engaging,  receiving,  transporting,  and  delivering 
merchandise  upon  freight  or  for  hire,  oetween  any  port-of  the  United  States  and 
any  other  port  or  ports  of  the  United  States,  or  between  any  foreign  port  or 
ports  and  auv  port  or  ports  of  the  United  Slates  ;  the  business  of  owning  or  char- 
tering vessels  therefor  ;  the  business  of  operating  vessels  iu  such  service  ;  t  he  busi- 
ness of  contracting  or  arranging  for  the.  transportation  of  merchandise  to  or 
from  any  of  such  ports  by  rail,  boat,  or  otherwise,  or  to  any  inland  or  coastwise 
place  or  places.  To  enter  into  contracts  for  the  carriage  of  mails,  passengers, 
goods,  and  merchandise  by  any  means,  either  by  its  own  vessels,  railways,  or  con- 
veyances, or  by  or  over  the  vessels,  railways,  or  conveyances  of  others  ;  to  construct, 
purchase,  and  operate  steamships  and  other  vessels  of  any  class,  and  generally  carry 
on  the  business  of  shipowners;  to  construct  bridges,  buildings,  ami  machinery, 
engines,  cars,  and  other  equipments,  railroads,  ships,  elevators,  viaducts,  canals,  and 
water  ways,  and  any  other  means  of  transportation,  and  to  sell  the  same  or  other- 
wise to  dispose  thereof,  or  to  maintain  and  operate  the  same.  To  gather,  receive, 
distribute,  and  deliver  goods  and  merchandise,  and  to  carry  on  a  general  trans- 
portation, freight,  and  express  business,  and  to  that  end  to  own  and  operate  its  own 
vessels,  cars,  and  vehicles  of  whatsoever  nature  or  description,  or  to  contract  with 
transportation,  railway,  express,  and  other  companies  for  the  use  of  their  vessels, 
cars,  and  vehicles  of  whatsoever  nature  or  description,  by  this  company,  or  to  con- 
tract with  said  companies  for  the  collection,  transportation,  or  distribution  of  goods, 
wares,  and  merchandise  to  and  from  all  points  and  places  where  it  may  seem  ad- 
vantageous and  profitable  to  carry  on  such  business.  To  carry  on  the  business  of 
storage,  wharfage,  warehousing,  and  forwarding,  and  the  doing  of  every  act  or  acts, 
thing  or  things,  incidental  or  growing  out  of  or  connected  with  said  business,  in- 
cluding the  owning,  leasing,  holding,  erecting,  and  maintaining  of  docks,  bulkheads, 
piers,  basins,  and  warehouses  ;  the  storage  of  all  kinds  of  goods,  wares,  and  merchan- 
dise ;  the  storage  and  docking  of  ships,  steam  vessels  and  boats  of  every  kind  and 
description  ;  the  loading  and  unloading  thereof  ;  the  issue  of  storage,  dock,  and  ware- 
house receipts,  negotiable  and  non-negotiable,  covering  all  kinds  of  goods,  wares,  and 
merchandise,  the  collection  and  receipt  of  dockage,  wharfage,  and  storage  dues, 
and  other  compensation  ;  the  loaning  of  money  on  the  pledge  of  goods,  wares,  and 
merchandise  and  other  propertv,  or  on  the  pledge  of  storage,  dock,  or  warehouse  re- 
ceipts therefor  ;  and  the  advancing  of  freights,  duties,  fire  and  marine  insurance, 
and  liens  of  every  kind  and  nature  upon  goods,  wares,  and  merchandise  received  on 
storage  or  for  the  purpose  of  being  warehoused. 

FORM  256. —TROPICAL  TRADING  COMPANY. 
To  buy,  sell,  import,  export,  manufacture,  and  generally  deal  in  timber  of  all 
kinds  and  descriptions;  to  manufacture,  prepare,  sell,  and  generally  deal  in  cabinet 
and  other  woods  ;  to  build,  maintain,  and  operate  milk,  saw-mills,  Hour-nulls,  and 
factories  to  be  operated  by  steam,  electricity,  or  other  power;  to  buy,  sell,  and  gen- 
erally deal  in  lands;  to  "establish,  maintain,  and  operate  plantations;  to  produce, 
manufacture,  purchase,  market,  export,  import,  and  generally  deal  in  rubber, 
chickle  gum,  tobacco,  coffee,  fruits,  gram,  live  stock,  and  any  and  all  kinds  of  trop- 
cal  and  sub-tropical  fruits. 

FORM  257.  —  TRUCKMEN. 

To  carry  on  a  general  trucking  business  and  in  connection  therewith  to  do  ;i 
general  baggage  transfer  and  freight  transfer  and  moving  business. 

FORM  258.  -  TRUST  COMPANY. 

To  act  as  trustee  fur  individuals  and  corporations,  to  receive  deposits,  issue  for- 
eign and  domestic  bills  of  exchange,  and   generally  to  engage  in  a.  banking  business 
in  all  its  various  branches.      To  carry  on  and  undertake  any  business,  undertaking, 
transaction,  or  operation  commonly  earned  on  or  undertaken  by  capitalists, promol 
ers,  financiers,  contractors,  merchants, commission  men  and  agents,  and  iu  the  course 

111!) 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

of  such  business  to  draw,  accept,  endorse,  acquire,  and  sell  all  or  any  negotiable  or 
transferable  instruments  and  securities,  including  debentures,  bonds,  notes,  and  bills 
of  exchange.  To  sell  on  commission,  subscribe  for,  acquire,  hold,  sell,  exchange, 
and  deal  in  shares,  stocks,  bonds,  obligations,  or  securities  of  any  public  or  private 
corporation,  government,  or  municipality,  and  the  company  shall  have  express 
power  to  hold,  purchase,  or  otherwise  acquire,  to  sell,  assign,  transfer,  mortgage, 
pledge,  or  otherwise  dispose  of,  shares  of  the  capital  stock,  bonds,  debentures,  or 
other  evidences  of  indebtedness  created  by  any  corporation  or  corporations,  and 
while  the  owner  thereof  to  exercise  all  the  rights  and  privileges  of  ownership,  in- 
cluding the  right  to  vote  thereon.  To  form,  promote,  and  assist  financially  or 
otherwise,  companies,  syndicates,  partnerships,  and  associations  of  all  kinds,  and  to 
give  any  guarantee  in  connection  therewith  or  otherwise  for  the  payment  of  money, 
or  for  the  performance  of  any  obligation  or  undertaking.  To  acquire,  improve,  man- 
age, work,  develop  and  exercise  all  rights  in  respect  of,  lease,  mortgage,  sell,  dispose 
of,  turn  to  account,  and  otherwise  deal  with  property  of  all  kinds,  and  in  particular 
business  concerns  and  undertakings.  To  act  as  fiscal  agent  for  persons,  firms,  and 
corporations.  To  buy  or  otherwise  acquire,  to  own,  hold,  mortgage,  pledge,  sell, 
assign,  and  transfer  or  otherwise  dispose  of,  and  to  invest,  trade,  and  deal  in  any 
goods,  wares,  merchandise,  and  property  of  every  class  and  description,  includ- 
ing patents  and  patent  rights,  inventions,  or  other  improvements,  trade  marks,  op- 
tions, shares,  or  rights  in  corporations,  real  property  of  any  description,  including 
mines,  railroads,  and  also  bonds,  mortgages,  securities  of  any  kind  or  description  or 
other  evidences  of  indebtedness,  and  investments  or  investment  securities  of  any 
kind  or  description  whatever,  to  act  as  agent  for  the  sale  or  purchase  of  any 
of  the  same,  or  for  any  other  purpose  connected  with  any  of  the  said  above-de- 
scribed powers  ;  to  promote  corporate  enterprises  of  any  kind,  including  industrial 
enterprises,  railroads,  mines,  real  estate  companies,  banking  institutions,  and  all 
businesses  or  enterprises  in  which  the  company  is  interested ;  to  endorse,  underwrite, 
or  guarantee  stock,  securities,  or  undertakings  of  any  corporation  or  persons.  To 
raise  money  by  the  issue  of  shares  or  otherwise,  and  to  invest  the  moneys  so  raised 
in  the  purchase  of,  or  otherwise  to  acquire  and  hold,  any  of  the  investments  follow- 
ing, that  is  to  say,  any  stock,  bonds,  debentures,  shares,  scrip,  or  securities  issued 
or  having  any  guarantee  by  any  government,  municipality,  trust,  local  authority,  or 
other  body,  incorporated  or  unincorporated,  public  or  private,  of  the  United  States, 
or  any  stock,  bonds,  debentures,  shares,  scrip,  or  securities  issued  or  having  any 
guarantee  by  any  corporation  or  company  incorporated,  constituted,  or  carrying  on 
business  in  the  United  States  or  elsewhere.  To  borrow  or  raise  money  by  the  issue 
or  sale  of  any  bonds,  mortgages,  debentures,  or  debenture  stock  of  the  company,  and 
to  invest  any  money  so  raised  in  any  such  investments  as  aforesaid.  To  acquire  any 
such  investments  as  aforesaid  by  original  subscription,  underwriting,  participation 
in  syndicates  or  otherwise,  and  whether  or  not  fully  paid  up,  aud  to  make  payments 
thereon  as  called  for,  or  in  advance  of  calls  or  otherwise,  and  to  underwrite  or 
subscribe  for  the  same  conditionally  or  otherwise,  either  with  a  view  to  invest- 
ment or  for  resale  or  otherwise,  and  to  vary  the  investments  of  the  company  and 
generally  to  sell,  exchange,  or  otherwise  dispose  of,  deal  with,  and  turn  to  account 
any  of  the  assets  of  the  company.  To  negotiate  loans,  to  offer  for  public  subscrip- 
tion, or  otherwise  aid  or  assist  in  placing  any  such  investments  as  aforesaid  ;  to  give 
any  guarantee  in  relation  to  any  such  investments  issued  by  or  acquired  through 
the  company  or  otherwise.  To  offer  for  public  subscription  any  shares  or  stock  in 
the  capital,  debentures,  or  debenture  stock  or  other  securities  of,  or  otherwise  to 
establish,  promote,  or  concur  in  establishing  or  promoting,  any  company,  associ- 
ation, undertaking,  public  or  private  body.  To  guarantee  the  payment  of  divi- 
dends or  interest  on  any  stock,  shares,  debentures,  or  other  securities  issued  by,  or 
any  other  contract  or  obligation  of,  any  such  company,  association,  undertaking,  or 
public  or  private  body.  To  purchase,  lease,  hire,  or  otherwise  acquire  real  and  per- 
sonal property,  improved  and  unimproved,  of  every  kind  and  description,  and  to  sell, 
dispose  of,  lease,  convey,  and  mortgage  said  property,  or  any  part  thereof;  to  ac- 
quire, hold,  lease,  manage,  operate,  develop,  control,  build,  erect,  maintain  for  the 
purposes  of  said  company,  construct,  reconstruct,  or  purchase,  either  directly  or 
through  ownership  of  stock  in  any  corporation,  any  lands,  buildings,  offices,  stores, 

650 


FORMS    AND    PRECEDENTS. 

•warehouses,  mills,  shops,  factories,  plants,  gas  houses,  machinery,  rights,  easements, 
permits,  privileges,  franchises,  and  licenses,  and  all  other  things  which  may  at  any 
time  be  necessary  or  convenient  in  the  judgment  of  the  board  of  directors  for 
the  purposes  of  the  company.  To  sell,  lease,  hire,  or  otherwise  dispose  of  the 
lauds,  buildings,  or  other  property  of  the  company  or  any  part  thereof.  To  hold, 
purchase,  or  oiherwise  acquire,  sell,  assign,  transfer,  mortgage,  pledge,  or  otherwise 
dispose  of,  shares  of  the  capital  stock  and  bonds,  debentures,  or  other  evidence 
of  indebtedness  created  by  any  other  corporation  or  corporations,  and  while  the 
holder  thereof  to  exercise  all  the  rights  or  privileges  of  ownership,  including  the 
right  to  vote  thereon. 

FORM  259.  —  TURBINE  ENGINES. 

To  manufacture,  construct,  purchase,  or  otherwise  acquire,  deal  in,  export,  import, 
sell,  hire,  lease,  use,  repair,  operate,  and  maintain  ships,  vessels,  yachts,  launches, 
torpedo  boats,  tug-boats,  and  boats  and  vessels  of  any  and  every  character,  and  any 
and  all  parts,  devices,  instruments,  engines,  machinery,  materials,  appliances,  ami 
things  whatsoever  adapted  to  be  used  in  the  construction  of,  upon,  or  in  connec- 
tion with  or  in  the  operation  of  ships,  vessels,  yachts,  launches,  torpedo  boats,  tug- 
boats, and  boats  and  vessels  of  any  and  every  character;  also  to  equip  such  ships, 
vessels,  yachts,  launches,  torpedo  boats,  tug-boats,  and  boats  and  vessels  of  any  and 
every  character. 

FORM  260.  —  TYPESETTING  MACHINES. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  machinery  for 
the  setting  of  type,  together  with  all  tools,  implements,  and  conveniences  necessary 
or  useful  in  connection  therewith. 

FORM  261.  —  UMBRELLAS  AND   PARASOLS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  umbrellas  and 
parasols  of  every  character  and  description. 

FORM  262.  —  UNDERTAKERS. 

To  carry  on  the  business  of  embalmers  and  undertakers  and  in  connection 
therewith  to  operate  and  maintain  crematories. 

FORM  263.  —  UPHOLSTERERS. 

To  carry  on  a  general  upholstering  business  and  in  connection  therewith  to 
manufacture  and  repair  chairs,  sofas,  mattresses  and  household  furnishings  of 
every  character  and  description. 

FORM  264.  — VALVE  COMPANY. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  valves,  engines, 
boilers,  tools,  and  machinery  of  all  kinds,  classes,  and  descriptions,  and  in  connection 
therewith  to  purchase,  lease,  or  otherwise  acquire  lands  and  buildings  for  the  erec- 
tion of  an  establishment  thereon,  and  manufactories  and  workshops  with  necessary 
plants,  engines,  machinery,  and  structures  thereon. 

FORM  265. —VARNISH   REMOVER. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  chemical  or 
other  processes  for  the  removal  of  varnish  and  kindred  products. 

FORM  266. —WALL  PAPER. 

To  manufacture,  buy,  sell,  export,  import-,  and  generally  deal  in  wall  papers  and 
wall  furnishings  of  every  character  and  description,  and  in  connection  therewith  to 
deal  in  paints,  oils,  and  varnishes. 

FORM  267.  — WATCHES,   JEWELRY,   AND  DIAMONDS. 

To  buy,  sell,  manufacture,  export,  import,  and  generally  deal  in  jewelry,  watches, 

and  diamonds;  to  buy,  lease,  or  otherwise  acquire,  maintain,  and  operate  jewelry 

CM 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

stores ;  to  carry  on  the  business  of  wholesale  and  retail  dealers,  watch  manufacturers, 
and  diamond  merchants. 

FORM  268.  —  WATER  HEATERS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  water  heaters 
for  domestic  and  business  uses,  and  in  connection  therewith  to  manufacture,  buy, 
sell,  import,  export,  and  generally  deal  in  engines,  boilers,  water  pipes,  and  plumbers' 
suppbes  of  every  class  and  description. 

FORM  269.— WATER  WORKS. 

To  construct,  purchase,  lease,  or  otherwise  acquire,  maintain,  operate,  and  sell 
water  works  for  the  purpose  of  supplying  manufactories,  corporations,  and  indi- 
viduals with  water  and  water  power  for  domestic  or  business  use.  Also  to  con- 
struct, purchase,  lease,  or  otherwise  acquire,  maintain,  and  sell  all  necessary  power 
houses,  water  towers,  water  mains  and  pipes,  convenient  for  the  carrying  on  of  the 
aforesaid  line  of  business. 

FORM  270.  — WEIGHING  MACHINES. 

To  manufacture,  buy,  sell,  import,  export,  lease,  operate,  and  generally  deal  in 
weighing  machines ;  to  apply  for,  acquire,  by  purchase  or  otherwise,  patents  per- 
taining to  weighing  machines,  and  to  sell  or  lease  the  same,  together  with  territorial 
rights  in  such  patents  for  weighing  machines. 

FORM  271.  — WHARF  AND  WAREHOUSE. 

To  purchase,  lease,  or  otherwise  acquire  lands  and  riparian  rights  of  every  class 
and  description.  Also  to  construct,  purchase,  lease,  or  otherwise  acquire  docks, 
wharves,  piers,  warehouses,  and  public  scales. 

FORM  272. —WINES  AND   LIQUORS. 

To  carry  on  a  general  wholesale  and  retail  wine  and  liquor  business.  Also  to 
carry  on  the  business  of  rectifiers,  distillers  of  wines  and  malt  and  spirituous 
liquors. 

FORM  273.  — WOOLLEN  AND  WORSTED. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  woollen  and 
worsted  goods  and  other  fabrics  manufactured  and  sold  by  other  concerns  engaged 
in  the  same  general  line  of  business. 

FORM  274.  — YARN  MILL. 

To  engage  in  the  business  of  manufacturers  of  yarn  goods,  and  in  connection 
therewith  to  carry  on  the  business  of  weavers,  silk  combers,  and  yarn  spinners. 
Also  to  purchase,  sell,  weave,  or  otherwise  manufacture  linen  cloths  and  other 
fabrics. 


652 


FORMS    AND    PRECEDENTS. 


GENERAL    OBJECT    CLAUSES. 


PATENT  AND   TRADE  MARK   CLAUSE. 

To  acquire  by  purchase  or  otherwise  patent  and  patent,  rights,  and  to  accept 
assignments  of  the  same.  To  register  trade  marks,  and  to  exploit  and  commercially 
develop  patents  and  patent  rights,  and  to  dispose  of  territorial  rights  under  letters 
patent,  either  for  a  cash  consideration  or  on  a  royalty  basis. 

GENERAL   MERCHANDISE   CLAUSE. 

To  buy,  sell,  export,  import,  and  generally  deal  in  goods,  wares,  and  merchan- 
dise of  every  nature  and  description  (insert  for  New  York  State,  "  excepting  bills 
of  exchange,  gold  and  silver  bullion"). 

REAL  ESTATE. 

To  acquire,  by  purchase,  lease,  or  otherwise,  such  real  estate  as  may  be  nec- 
essary or  convenient  for  the  proper  carrying  on  of  the  business  of  the  corporation. 

ACQUIRING  AN  ESTABLISHED  BUSINESS. 

To  purchase  the  real  estate,  personal  property,  and  good  will  of  any  person, 
firm,  or  corporation. 

HOLDING  STOCK  IN  OTHER  CORPORATIONS. 

To  acquire  by  purchase,  subscription,  or  otherwise,  and  to  hold  or  dispose  of, 
stocks,  bonds,  or  other  obligations  of  any  corporation  formed  for,  or  then  or  here- 
tofore engaged  in  or  pursuing  any  one  or  more  of  the  kinds  of  business,  purposes, 
objects,  or  operations  above  indicated,  or  owning  or  holding  the  stocks  or  the 
obligations  of  any  such  corporation.     (U.  S.  Steel  Corporation  charter.) 

CONDUCTING  BUSINESS  IN  OTHER  STATES. 

To  conduct  its  business  in  all  its  branches,  and  to  have  one  or  more  busiuess 
offices,  and  without  restriction  to  contract,  buy,  sell,  lease,  mortgage,  anil  convey 
such  real  and  personal  property  in  any  of  t  lie  States, Territories,  distru  ts,  or  colonial 
possessions  of  the  United  States  and  any  foreign  countries  as  shall  from  time  to 
time  be  found  necessary  and  convenient  for  the  purposes  of  the  company's 
business. 

BOND  CLAUSE. 

Without  in  any  particular  limiting  any  of  I  he  objects  and  powers  of  the  corpora- 
tion, it  is  hereby  "expressly  declared  and  provided  that  the  corporation  shall  have 
power  to  issue  bonds  and  other  obligations  in  payment  for  property  purchased  or 
acquired  by  it,  or  for  any  other  object  in  or  about  its  business;  to  mortgage  or 
pledge  any  stocks,  bonds  or  oilier  obligations  or  any  property  which  may  be 
acquired  by  it,  to  secure  any  bonds  or  other  obligations  by  it  issued  or  incurred; 
to  guarantee  any  dividends  or  bonds  or  contracts  or  other  obligations;  to  make  and 
perform  contracts  of  any  kind  and  description  and  iii  carrying  on  iis  business,  or 
for  the  purpose  of  attaining  or  furthering  any  of  its  objects,  to  do  any  and  all  other 

acts  and  things,  and  In  exercise  any  and  all  other  powers  which  a,  co-partnership  or 
natural  person  could  do  and  exercise,  ami  which  nowor  hereafter  may  be  authorized 
by  law.     (U.  8.  Steel  Corporation  charter.) 

POWER  TO  DISPOSE  OF  ALL  CORPORATE  PROPERTY. 

The  board  of  directors  shall  have  the  power  and  authority  to  sell,  assign,  mort- 
gage, convey,  or  otherwise  dispose  of  all  the  property  ami  assets  of  the  corporation 

653 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

on  such  terms  and  conditions  as  they  shall  prescribe  whether  for  cash  or  property 
or  stock  and  bonds  in  other  corporations. 

(I.)  GENERAL  PURPOSE  CLAUSE. 

To  do  and  perform  every  act  and  thing  necessary  to  carry  out  the  above  enu- 
merated purposes  in  other  States  and  jurisdictions  which  like  corporations  organized 
under  the  law  of  such  States  and  jurisdictions  may  lawfully  do  or  cause  to  be  done 
therein. 

(II.)  GENERAL  PURPOSE  CLAUSE. 

To  foster,  protect,  and  promote  the  business  welfare  and  interests  of  persons 
engaged  in  the  business  of  and  its  product,  and  for  the  protection 

and  encouragement  of  such  business  by  combining  against  impositions,  fraud,  and 
oppression  therein. 

(III.)  GENERAL  PURPOSE  CLAUSE. 

To  carry  on  any  and  all  kinds  of  manufacturing  and  commercial,  mercantile, 
mechanical,  trading,  mining,  or  real  estate  business. 


CLAUSES    REGULATING   BUSINESS. 


(I.)    CLASSIFICATION  OF  DIRECTORS. 

The  directors  shall  be  divided  as  equally  as  possible  into  classes,  to  be  known 
as  directors  of  the  first,  second,  third  classes,  etc.  The  terms  of  office  of  director 
of  the  first  class  shall  expire  on  the  first  Monday  of  ,  191  ,  and  the  second 

class  on  the  first  Monday  of  ,  191  ,  etc. 

(II.)    CLASSIFICATION  OF  DIRECTORS. 

The  number  of  directors  may  be  increased  in  the  manner  provided  by  law.  In 
ease  of  any  increase  of  the  number  of  the  directors  the  additional  directors  shall  be 
elected  as  may  be  provided  in  the  by-laws  by  the  directors  or  by  the  stockholders 
at  an  annual  or  special  meeting ;  and  one-third  of  the  directors  of  the  first  class  shall 
be  elected  for  the  then  unexpired  portion  of  the  term  of  the  directors  of  the  first 
class ;  one-third  of  their  number  for  the  unexpired  portion  of  the  term  of  the  direc- 
tors of  the  second  class,  and  one-third  of  their  number  for  the  unexpired  portion  of 
the  term  of  the  directors  of  the  third  class,  so  that  each  class  of  directors  shall  be 
increased  equally. 

In  case  of  any  vacancy  in  any  class  of  directors  through  death,  resignation, 
disqualification,  or  other  cause,  the  remaining  directors,  by  affirmative  vote  of  a 
majority  of  the  board  of  directors,  may  elect  a  successor  to  hold  office  for  the  un- 
expired portion  of  the  term  of  the  director  whose  place  shall  be  vacant,  and  until 
the  election  of  a  successor.     (U.  S.  Steel  Corporation  charter.) 

POWER  TO  ADOPT  AND  ALTER  BY-LAWS. 

Subject  always  to  the  by-laws  made  by  the  stockholders,  the  board  of  directors 
may  make  by-laws  and,  from  time  to  time,  may  alter,  amend,  or  repeal  any  by-laws; 
but  any  by-laws  made  by  the  board  of  directors  may  be  altered  or  repealed  by  the 
stockholders  at  any  annual  meeting,  or  at  any  special  meeting,  provided  notice  of 
such  proposed  alteration  or  repeal  be  included  in  the  notice  of  the  meeting.  (U.  S. 
Steel  Corporation  charter.) 

AUTHORITY  OF  DIRECTORS  TO  ISSUE  BONDS. 

The  directors  and  officers  of  the  company  are  authorized  to  make  and  issue 
bonds  —  either  secured  by  mortgage  or  trust  deed  or  otherwise  —  at  such  times  and 
in  such  amounts  as  to  them  shall  be  deemed  advisable. 

654 


FORMS    AND    PRECEDENTS. 

TO    ISSUE  STOCK    AND    BONDS    IN  EXCHANGE    FOR  REAL    AND 
PERSONAL   PROPERTY. 

The  company  may  at  any  time,  through  its  board  of  directors,  issue  its  capital 
stock  or  its  corporate  bonds  in  exchange  for  or  in  the  purchase  of  real  or  personal 
property,  or  for  services  performed  for  the  use  aud  benefit  of  the  corporation,  in 
such  amounts  as  to  said  board  of  directors  shall  appear  advisable  in  the  premises. 
And  the  judgment,  of  said  board  of  directors  in  appraising  the  value  of  said  real  and 
personal  property  or  of  said  services,  in  consideration  of  which  such  stock  or  bonds 
shall  have  been  issued,  shall  be  conclusive  as  to  the  value  thereof. 

LIMITATIONS    ON    THE    RIGHT    OF    THE    BOARD    OF    DIRECTORS 
TO  MORTGAGE  AND  PLEDGE. 

Unless  otherwise  authorized,  by  votes  given  in  person  or  by  proxy  by  stock- 
holders holding  at  least  two-thirds  of  the  capital  stock  of  the  company,  which  is 
represented  and  voted  upon  in  person  or  by  proxy  at  a  meeting  specially  called  for 
that  purpose,  or  at  an  annual  meeting,  the  board  of  directors  shall  not  mortgage  or 
pledge  any  property  of  the  company,  or  any  shares  of  the  capital  stock  of  any  other 
corporation  owned  by  it;  but  this  prohibition  shall  not  be  construed  to  apply  to  the 
execution  of  any  purchase  money  mortgage  or  any  other  purchase  money  lieu. 

EXAMINATION   OF  BOOKS  BY  STOCKHOLDERS. 

Except  where  otherwise  provided  by  law,  the  board  of  directors  shall  have  the 
power  to  determine  under  what  conditions  and  regulations,  and  at  what  times  and 
places,  the  accounts  and  books  of  the  corporation  shall  be  opened  to  the  inspection 

of  stockholders. 

CUMULATIVE  VOTING. 

The  by-laws  may  provide  that  at  all  elections  of  directors  each  stockholder  shall 
be  entitled  to  as  many  votes  as  shall  equal  the  number  of  his  shares  of  stock  multi- 
plied by  the  number  of  directors  to  be  elected,  and  that  he  may  cast  all  of  said 
votes  for  a  single  director,  or  may  distribute  them  among  the  number  to  be  voted 
for,  or  any  two  or  more  of  them,  as  he  may  see  fit,  which  right  when  exercised  shall 
be  termed  cumulative  voting. 

FIRST  MEETING  OF  INCORPORATORS. 

The  first  meeting  of  the  corporation  shall  be  called  by  a  notice  signed  by  a 
majority  of  the  incorporators  named  in  the  certificate  of  incorporation,  designating 
the  time,  place,  and  purpose  of  the  meeting ;  and  such  notice  shall,  at  least  two 
weeks  before  the  time  of  any  such  meeting,  be  published  three;  times  in  some  news- 
paper of  the  county  where  the  corporation  may  be  established  or  have  its  principal 
place  of  business ;  or  said  first  meeting  may  be  called  without  such  publication  of 
notice  if  two  days'  notice  thereof  be  personally  served  on  all  the  parties  named  in 
the  certificate  of  incorporation,  or  if  the  parties  named  in  the  certificate  of  incorpo- 
ration shall,  in  writing,  waive  notice  and  fix  a  time  and  place  of  meeting,  then  no 
notice  or  publication  thereof  whatever  shall  be  required  of  such  first  meeting. 

HOLDING  STOCKHOLDERS'   MEETINGS  WITHOUT  THE 
DOMICILIARY  STATE. 

To  maintain  an  office  without  the  State  of  (here  name  the  domiciliary  State),  at 
the  city  of  ,  Mate  of  ,  and  any  meetings  of  incorporators,  directors, 

or  stockholders  of  this  company  may  be  held  at  either  of  said  offices  or  places  of 
business,  and  the  books  of  this  corporation  may  be  kept  at  either  of  said  offices  or 
places  of  business,  and  any  incorporator  or  stockholder  entitled  to  be  present  and 
to  vote  at  any  organization  or  stockholders'  meetings  may  be  represented  and  vote 
at  such  meeting  by  proxy  in  writing. 

EXECUTIVE   COMMITTEE    (GENERAL   FORM). 

The  Board  of  Directors,  bv  tin;  affirmative  voir  of  a  majority  of  the  whole  number 
may  appoint  from  the  Directors  and  Executive  Committee,  of  which  a  majority  shall 

055 


INCORPORATION  AND    ORGANIZATION   OF   CORPORATIONS. 

constitute  a  quorum,  aiid  to  such  extent  as  may  be  provided  in  the  by-laws  such 
C  >  ii  tnittee  shall  have  aud  may  exercise  all  or  any  of  the  powers  of  the  Board  of 
Directors,  including  power  to  cause  the  seal  of  the  corporation  to  be  affixed  to  all 
papers  that  may  require  it.     (U.  S.  Steel  Corporation  charter.) 

EXECUTIVE   COMMITTEE   CLAUSE   (NEW  YORK). 

An  executive  committee  may  be  appointed  by  or  from  the  Board  of  Directors  in 
such  manner  and  subject  to  such  regulations  as  may  be  provided  in  the  by-laws, 
whicli  committee  shall  have  and  exercise  all  the  powers  of  said  board  during  the 
intervals  between  the  meetings  of  said  board  which  may  be  lawfully  delegated  to 
them,  subject  to  such  limitations  as  may  be  provided  in  the  by-laws  or  by  resolu- 
tions of  the  board.  The  board  of  directors  shall  determine  the  compensation  of 
the  members  of  the  executive  committee  and  of  the  board. 

POWER  TO  PLACE  STOCK  IN  VOTING  TRUST. 

Any  stockholder  may,  by  an  agreement  in  writing,  transfer  his  stock  to  any  per- 
son, for  the  purpose  of  vesting  in  him  the  right  to  vote  thereon  for  a  time  not 
exceeding  five  years,  upon  terms  and  conditions  set  forth  in  such  agreement;  and 
such  transferees  shall  in  all  things  act,  during  the  time  limit  of  such  agreement, 
in  such  manner  aud  by  such  part,  of  their  number  as  it  shall  provide,  and  shall 
exercise  such  discretion  in  formulating  or  carrying  out  policies  and  plans  of  action 
as  may  be  granted  to  them  in  such  agreement,  and  may  elect  one  or  more  of  their 
number  directors  of  the  corporation. 

POWER  TO   PLACE  TITLES  IN  INDIVIDUALS. 

If  deemed  desirable  (and  to  the  extent  permitted  by  the  local  laws  of  each  State 
aud  foreign  country  where  the  property  may  be  situated,  and  subject  always  to 
sueh  local  laws)  the  company  may  cause  or  allow  the  legal  title,  estate,  and  interest 
in  any  property  or  business  acquired,  established,  or  carried  on  by  the  company  to 
remain  or  be  vested,  or  registered  in  the  name  of  or  carried  on  by  an  individual  or 
by  any  other  company  or  companies,  foreign  or  domestic,  formed  or  to  be  formed, 
and  either  upon  trust  for,  or  as  agents  or  nominees  of,  this  company,  or  upon  any 
other  terms  or  conditions  which  the  board  of  directors  may  consider  for  the  bene- 
fit of  this  company,  and  manage  the  affairs  or  take  over  and  carry  on  the  business 
of  such  company  or  companies  so  formed  or  to  be  formed,  either  by  acquiring  the 
shares,  stock,  or  other  securities  thereof  or  otherwise  howsoever,  and  exercise  all 
or  any  of  the  powers  of  holders  of  shares,  stocks,  or  securities  thereof,  and  receive 
and  distribute  as  profits  the  dividends  and  interests  on  such  shares,  stocks,  and 
securities. 

"SAFETY  CLAUSE"   FOR  THE  BENEFIT   OF  PROMOTERS,   INCOR- 
PORATORS,  AND  DIRECTORS. 

To  authorize  and  permit  any  or  all  of  the  promoters,  incorporators,  or  directors 
of  the  company,  notwithstanding  their  relations  —  official  or  otherwise  —  to  it,  to 
enter  into,  negotiate,  consummate,  and  perform  any  contract  or  agreement  of  any 
name  or  nature  between  the  company  and  themselves,  or  any  or  all  of  the  individu- 
als from  time  to  time  constituting  the  board  of  directors  of  the  company,  or  any 
firm  or  corporation  in  which  any  such  director,  promoter,  or  incorporator  may  be 
interested  directly  or  indirectly,  whether  such  individual  or  individuals,  firm,  or  cor- 
poration thus  contracting  with  the  company  shall  thereby  derive  personal  or  cor- 
porate profit  or  benefits,  or  otherwise ;  the  intent  hereof  being  to  relieve  each  aud 
every  person  who  may  be  or  become  a  promoter,  incorporator,  or  director  of  the 
company  from  any  disability  that  might  otherwise  exist  of  contracting  with  the  com- 
pany for  the  benefit  of  himself,  or  of  the  copartnership  or  corporation  in  which  he 
may  be  in  any  wise  interested. 

LIMITATION  ON  AMOUNTS   OF  DIVIDENDS. 

No  dividends  upon  the  capital  stock  of  the  company  in  excess  of         per  cent 
656 


FORMS   AND   PRECEDENTS. 

upon  the  entire  amount  thereof  at  any  time  outstanding  shall  at  any  time  be  declared 
except  upon  the  written  consent  of  the  holders  of  record  of  a  majority  of  the  stock  at 
such  time  outstanding,  and  not  more  than  one  such  dividend  of  per  cent  shall 
be  declared  in  any  one  year  except  upon  such  written  consent. 

LIMITATION  ON  LIABILITY   OF  ORIGINAL  SUBSCRIBERS  TO 
CAPITAL  STOCK. 

The  subscribers  hereto,  and  each  other  subscriber  for  the  stock  of  the  company, 
shall  at  all  times  be  liable  for  the  purchase  price  of  stock  for  which  he  subscribed 
until  per  cent  of  the  par  value  thereof  has  been  paid  thereon,  but  after  the  pay- 
ment of  said  per  cent  the  subscriber  shall  no  longer  be  liable  for  any  unpaid 
part  of  his  subscription  exceptiug  upou  such  shares  as  shall  stand  of  record  on  the 
books  of  the  company  in  the  subscriber's  name  at  the  time  a  call  or  assessment 
is  made ;  but  the  holders  of  such  shares  of  record  on  the  books  of  the  company, 
and  they  only,  shall  be  liable  for  the  same. 

RIGHTS  OF  SHAREHOLDERS  TO  PARTICIPATE  IN  PURCHASE 
OF  NEW  STOCK  ISSUE. 

The  board  of  directors  shall,  before  the  issue  of  any  new  shares  of  the  capital 
stock,  determine  that  the  same,  or  any  part  thereof,  shall  be  offered  in  the  first 
instance  to  all  of  the  then  stockholders  in  proportion  to  the  amount  of  the  capital 
stock  held  by  them,  or  make  any  other  provision  as  to  the  issue  and  allotment  of 
the  new  shares ;  but  in  default  of  any  such  determination,  or  so  far  as  the  same 
shall  not  extend,  the  new  shares  may  be  dealt  with  as  if  they  formed  part  of  the 
shares  in  the  original  capital  stock  of  the  company. 

POWER  TO  DIRECTORS  TO  FIX  WORKING  CAPITAL. 

The  board  of  directors  shall  have  power  from  time  to  time  to  fix  and  to  deter- 
mine and  to  vary  the  amount  of  the  working  capital  of  the  corporation,  to  determine 
whether  any,  and  if  any,  what  part  of  any,  accumulated  profits  shall  be  declared  in 
dividends  and  paid  to  the  stockholders ;  to  determine  the  time  or  times  for  the 
declaration  and  the  payment  of  dividends ;  and  to  direct  and  to  determine  the  use 
and  disposition  of  any  surplus  over  and  above  the  capital  stock  paid  in  ;  and  in  its 
discretion  the  board  of  directors  may  use  and  apply  any  such  surplus  or  accumu- 
lated profits  in  purchasing  or  acquiring  its  bonds  or  other  obligations,  or  shares  of 
the  capital  stock  of  the  corporation,  to  such  extent  and  in  such  manner  and  upon 
such  terms  as  the  board  of  directors  shall  deem  expedient ;  but  shares  of  such 
capital  stock  so  purchased  or  acquired  may  be  resold,  unless  such  shares  have  been 
retired  for  the  purpose  of  decreasing  the  capital  stock  of  the  corporation  to  the 
extent  authorized  by  law. 

FORM  FOR  CLAUSE  IN  CHARTER  PROVIDING  FOR  ISSUANCE 
OF  INTERIM  CERTIFICATES  IN  LIEU  OF  CERTIFICATES  OF 
CAPITAL  STOCK. 

"The  Board  of  Directors  may,  upon  the  payment  of  the  capital  stock  of  this 
Company,  either  in  whole  or  in  part,  in  the  manner  above  set  forth,  issue  against 
the  money  so  paid,  or  the  stock  or  bonds  or  real  or  personal  property  transferred 
to  the  Company,  or  against  the  services  rendered  to  the  Company,  non-transferable 
interim  certificates,  which  shall  read  in  substance  as  follows,  to  wit  : 

This  is  to  certify  that  on  or  before  the  day  of  ,  190  ,  or  before, 

at  the  option  of  the  Board  of  Directors  of  the  Company,  the  holder  hereof 

will  receive  shares  of  the  full-paid  and  non-assessable  eaiiital  stock  of  the 

to  be  issued  only  upon  the  surrender  of  this  certificate,  properly 
endorsed  by  the  above-named  holder  or  his  legal  representatives.  This  certificate 
entitles  the  holder  thereof  to  voting  powers  in  said  Company,  equal  to 

the  numb  sr  of  shares  named  above,  and  further  entitles  the  bolder  thereof  to  all  I  lie 
rights  and  privileges  of  a  stockholder  I  hi  •  rein  fco  the  number  of  shares  set  forth,  and 

657 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

further  entitles  the  holder  above  named  to  all  dividends  that  are  declared  upon  said 
Company  stock  prior  to  said  ,  190  ,  save  and  excepting  that 

this  certificate  shall  not  be  transferred  or  assigned,  prior  to  ,  190  ,  save 

and  excepting  upon  the  written  consent  of  all  or  a  majority  of  the  Executive  Com- 
mittee of  the°  Company  provided  for  in  Section  herein. 

This  certificate  certifies  further  that  it  is  issued  by  said  Company 

and  accepted  by  the  holder  thereof,  subject  at  all  times  to  the  terms  and  conditions 
hereinbefore  set  forth.  . 

Witness  the   seal  of  the  Company  and  the  signatures  ot  its  duly 

authorized  officers,  affixed  this  day  of  ,  190  ." 

PROVISION  FOR  INTERIM  CERTIFICATES  IN   LIEU  OF 
CERTIFICATES   OF  STOCK. 

The  board  of  directors  of  the  company  may  at  any  time  after  organization  and  be- 
fore any  certificates  of  stock  have  been  issued  to  any  stockholder,  or  at  any  time,  by 
and  with  the  consent  of  all  the  stockholders  provide  by  resolution  from  and  after  the 
date  of  the  passage  thereof,  that  in  lieu  of  certificates  of  stock  there  shall  be  issued  to 
all  stockholders  in,  or  to  all  subscribers  for  the  capital  stock  of  ,  a  corpora- 

tion, "  interim  certificates,"  which  shall  state,  over  the  signature  of  the  president 
and  the  of  the  corporation,  the  amount  of  stock  in  the  company  to 

which  the  holder  of  said  certificate  may  be  entitled,  together  with  a  statement 
that  such  certificate  is  non-transferable  for  a  period  of  years  thereafter,  and 

that  at  the  expiration  of  said  period,  or  sooner  if  the  board  of  directors  of  said 
company  shall  so  elect,  the  holder  thereof  will  receive  the  number  of  shares  of  stock 
in  the  corporation  named  in  said  "  interim  certificate,"  said  shares  of  stock  so  issued 
to  be  full  paid  and  non-assessable,  and  deliverable  only  on  the  surrender  of  said 
"  interim  certificate,"  by  the  party  therein  named,  or  in  case  of  his  death  by  his 
heirs,  executors,  or  administrators.  Said  certificate  shall  further  provide  that  the 
holder  thereof  shall  be  entitled  to  voting  powers  in  the  corporation  equal  to  the 
number  of  shares  of  stock  for  which  said  "  interim  certificate  "  is  issued,  and  shall 
further  entitle  the  holder  thereof  to  all  the  rights  and  privileges  possessed  by 
stockholders  in  corporations  of  a  simdar  character,  save  and  excepting  that  the 
said  certificates  shall  not  be  transferable,  nor  shall  the  holders  thereof  be  entitled 
to  demand  as  of  right  the  exchange  thereof  for  an  equal  amount  of  stock  in  the 
company,  until  the  expiration  of  the  period  limited  in  said  certificate  for  that 
purpose. 

POWER  TO  BORROW. 

To  borrow  money,  to  make  and  issue  its  bonds  payable  to  bearer  or  otherwise, 
and  with  or  without  interest  coupons  attached  or  drafts  or  notes  for  the  same,  or  for 
any  debts  or  obligations  incurred  by  it  or  for  any  of  the  purposes  of  the  corpora- 
tion, and  to  secure  the  same  by  mortgage  or  deed  of  trust  on  all  of  its  works,  prop- 
erty, and  franchises  or  any  part  thereof. 

REMOVAL  OF  DIRECTORS. 

Any  officer  or  director,  whether  elected  by  the  stockholders  or  named  in  the 
certificate  of  incorporation  or  elected  or  appointed  by  the  board  of  directors,  may 
be  removed  at  any  time,  by  affirmative  vote  of  a  majority  of  the  stockholders  of  the 
corporation  with  or  without  cause. 

REMOVAL   OF  OFFICERS. 

Any  officer  elected  or  appointed  by  the  board  of  directors  may  be  removed  at 
any  time  by  the  affirmative  vote  of  a  majority  of  the  whole  board  of  directors.  Any 
other  officer  or  employee  of  the  company  may  be  removed  at  any  time  by  vote  of 
the  board  of  directors  or  by  any  committee  or  superior  officer  upon  whom  such 
power  of  removal  may  be  conferred  by  the  by-laws  or  by  a  vote  of  the  board  of 
directors.     (U.  S.  Steel  Corporation  charter.) 

658 


FORMS    AND    PRECEDENTS. 


POWER  TO   CONTRACT   AND   TO   ACQUIRE   REAL  AND 
PERSONAL   ESTATE. 

To  contract  and  be  contracted  with,  to  purchase,  hold,  and  grant  sucli  real  and 
personal  estate  as  the  purposes  of  the  corporation  shall  require,  and  all  other  real 
estate  which  shall  have  been  bona  fide,  conveyed  or  mortgaged  to  the  said  corpora- 
tion, or  for  its  benefit,  by  way  of  security  or  in  satisfaction  of  debts,  or  purchased 
at  sales  upon  judgment  or  decree  obtained  for  such  debts,  and  to  mortgage  or 
pledge  or  convey  by  way  of  deed  of  trust,  or  otherwise  encumber  any  such  real  or 
personal  estate  as  is  mentioned  in  this  section,  together  with  the  franchises  of  such 
corporation  in  whole  or  in  part.  The  power  to  hold  real  and  persoual  estate  shall 
include  the  power  to  take  the  same  by  gift,  devise,  or  bequest 

POWER  TO  APPOINT  ADDITIONAL   OFFICERS. 

The  board  of  directors  may  appoint  not  only  other  officers  of  the  company,  but 
also  one  or  more  vice-presidents,  one  or  more  assistant  treasurers,  and  one  or  more 
assistant  secretaries ;  and  to  the  extent  provided  in  the  by-laws  the  persons  so 
appointed  respectively  shall  have  and  may  exercise  all  the  powers  of  the  president, 
of  the  treasurer,  and  of  the  secretary  respectively. 

TO   LEND   MONEY  AND  TO  BECOME   SECURITY  FOR  PERSONS 
OR  CORPORATIONS. 

To  lend  money,  or  to  extend  credit,  or  to  become  security  for  individuals,  firms, 
and  corporations  with  whom  the  company  may  have  business  dealings  in  the  line  of 
carrying  out  the  purposes  for  which  the  corporation  was  organized,  whenever  and 
in  such  amounts  as  to  the  board  of  directors  of  this  company  may  deem  advisable 
in  the  premises. 

TO  GUARANTEE  DIVIDENDS. 

To  guarantee  the  payment  of  dividends  on  the  capital  stock,  or  of  interest  on  the 
notes  or  bonds  of  any  other  corporation  engaged  in  cognate  or  allied  lines  of  busi- 
ness, whenever  in  the  judgment  of  a  majority  of  the  board  of  directors  of  this  cor- 
poration such  a  guaranty  shall  seem  proper  or  necessary  for  the  business  of  the 
corporation. 

PARTNERSHIP   CLAUSE. 

To  enter  into  partnership  with  one  or  more  persons  or  corporations  for  the  pur- 
pose of  carrying  on  in  conjunction  with  them  lines  of  business  of  the  character 
hereinbefore  specified. 

GENERAL  CLAUSE  PRESCRIBING  POWERS  OF  BOARD   OF 
DIRECTORS. 

1.  To  hold  their  meetings,  to  have  one  or  more  offices,  and  to  keep  the  books 
of  the  company  within  or  without  the  State  of  ,  at  such  places  as  may  be 
from  time  to  time  designated  by  them  ;  but  the  company  shall  always  keep  at  its 
principal  and  registered  office  in  a  transfer  book  in  which  the  transfers  of 
stock  can  be  made,  entered,  and  registered,  and  also  a  stock  book  containing  the 
names  and  addresses  of  the  stockholders  and  the  number  of  shares  held  by  them 
respectively,  which  said  transfer  book  and  stock  book  shall  be  at  all  times  during 
business  hours  open  to  the  inspection  of  stockholders  in  person. 

2.  To  determine  from  time  to  time  whether,  and  if  allowed,  when,  and  under 
what  conditions  and  regulations,  the  accounts  and  hooks  of  the  company  (other 
than  the  stock  and  transfer  hooks),  or  any  of  them,  shall  he  open  to  the  inspection 
of  the  stockholders,  and  the  stockholders'  rights  in  this  respect  are  ami  shall  be 
restricted  and  limited  accordingly. 

3.  To  make,  alter,  amend,  and  rescind  the  by-laws  of  this  company,  to  fi\  the 
amount  to  be  reserved  as  working  capital,  to  authorize  and  cause  to  be  exeouted 

G59 


INCORPORATION   AND    ORGANIZATION   OP    CORPORATIONS. 

mortgages  and  liens  upon  the  real  and  personal  property  of  the  corporation,  pro- 
vided always,  that  a  majority  of  the  whole  board  concur  therein. 

4.  With  the  consent  in  writing,  and  pursuant  also  to  the  affirmative  vote  of 
the  holders  of  a  majority  of  the  stock  issued  and  outstanding,  at  a  stockholders' 
meeting  duly  called  for  that  purpose,  to  sell,  assign,  transfer,  or  otherwise  dispose 
of  the  property  of  the  company  as  an  entirety,  provided  always  that  a  majority  of 
the  whole  board  concur  therein. 

5.  By  a  resolution  passed  by  a  majority  vote  of  the  whole  hoard  under  suit- 
able provision  of  the  by-laws  to  designate  two  or  more  of  their  number  to  constitute 
an  executive  committee,  which  committee  shall  for  the  time  being,  as  provided  in 
said  resolution  or  in  the  by-laws,  have  and  exercise  all  the  powers  of  the  board  of 
directors  which  may  be  lawfully  delegated  in  the  management  of  the  business  and 
affairs  of  the  company,  and  shall  have  power  to  authorize  the  seal  of  the  company 
to  be  affixed  to  all  papers  which  may  require  it. 

The  company  may  use  and  apply  its  surplus  earnings  or  accumulated  profits 
authorized  by  law  to  be  reserved  to  the  purchase  or  acquisition  of  property,  and  to 
the  purchase  or  acquisition  of  its  own  capital  stock  from  time  to  time,  to  such 
extent  and  in  such  manner  and  upon  such  terms  as  its  board  of  directors  shall 
determine;  and  neither  the  property  nor  the  capital  stock  so  purchased  and  acquired, 
nor  any  of  its  capital  stock  taken  in  payment  or  satisfaction  of  any  debt  due  to  the 
corporation,  shall  be  regarded  as  profits  for  the  purpose  of  declaration  or  payment 
of  dividends,  unless  otherwise  determined  by  a  majority  of  the  board  of  directors 
or  a  majority  of  the  stockholders. 

To  divide  corporate  assets  in  specie  among  the  stockholders  without  dis- 
solution. 

The  corporation  may,  with  the  unanimous  consent  of  all  its  stockholders,  first 
obtained  at  a  meeting  duly  convened  for  that  purpose,  distribute  any  or  all  of  the 
corporate  property  among  such  stockholders  in  proportion  to  their  prospective 
holdings. 

POWER  TO   MAKE   CONTRACTS. 

To  make  and  enter  into  contracts  pertaining  to  the  business  of  the  company  in 
all  parts  of  the  United  States  and  in  foreign  countries ;  also  to  apply  for,  obtain, 
accept,  and  utilize  f  rancliises  and  concessions  from  governments,  States,  and  munici- 
palities, in  connection  with  the  carrying  out  of  the  general  purposes  for  which  the 
company  is  organized. 

PROVISION   MAKING   STOCK  NON-ASSESSABLE. 

The  capital  stock  of  the  corporation,  after  the  same  shall  have  been  fully  paid 
in,  in  accordance  with  the  statutes  of  this  State  in  such  case  made  and  provided, 
either  in  cash,  or  iu  property  or  services,  shall  be  and  hereby  is  made  forever 
exempt  from  all  liability  for  the  corporate  debts  and  obligations  of  the  company, 
and  there  shall  thereafter  be  no  individual  liability  thereon  as  to  the  holders  thereof. 

COMMON  LAW   POWERS. 

1.  To  have  succession  by  its  corporate  name,  for  the  time  stated  in  the  certifi- 
cate of  incorporation,  and  when  no  period  is  limited,  it  shall  be  perpetual. 

2.  To  sue  and  be  sued,  complain  and  defend,  in  any  court  of  law  or  equity. 

3.  To  make  and  use  a  common  seal  and  alter  the  same  at  pleasure. 

4.  To  hold,  purchase,  and  convey  real  and  personal  estate,  and  to  mortgage 
any  such  real  and  personal  estate  with  its  franchises ;  the  power  to  hold  real  and 
personal  estate,  except  in  the  case  of  religious  corporations,  shall  include  the  power 
to  take  the  same  by  devise  or  bequest. 

5.  To  appoint  such  officers  and  agents  as  the  business  of  the  corporation  shall 
require,  and  to  allow  them  suitable  compensation. 

6.  To  make  by-laws  not  inconsistent  with  the  Constitution  or  the  laws  of  the 
United  States  or  of  this  State,  fixing  and  altering  the  number  of  its  directors  for 
the  management  of  its  property,  the  regulation  and  government  of  its  affairs,  and 

660 


FORMS    AND    PRECEDENTS. 

for  the  qualification  and  transfer  of  its  stock,  with  penalties  for  the  breach  thereof 
not  exceeding  twenty  dollars. 

7.  To  wind  up  and  dissolve  itself,  or  to  be  wound  up  and  dissolved  in  the 
manner  prescribed  by  law. 

8.  In  addition  to  the  powers  above  enumerated,  this  corporation,  its  officers, 
directors,  and  stockholders  shall  possess  and  exercise  all  the  powers  and  privileges 
expressly  conferred  by  law  upon  all  corporations  of  its  general  character,  and  the 
powers  expressly  given  in  its  charter  or  in  its  certificate  under  which  it  was  incorpo- 
rated, so  far  as  the  same  are  necessary  or  convenient  to  the  attainment  of  the 
objects  set  forth  in  such  charter  or  certificate  of  incorporation ;  and  shall  be 
governed  by  the  provisions  and  be  subject  to  the  restrictions  and  liabilities  estab- 
lished by  law  for  the  government  of  business  corporations  in  this  State. 

PREFERRED  STOCK  CLAUSES. 


(I.)     PREFERRED  STOCK  CLAUSES  (Short  Form). 

The  capital  stock  of  the  company  shall  consist  of  shares  of  common 

stock  of  the  par  value  of  S  per  share,  and  shares  of  preferred  stock 

of  the  par  value  of  $  per  share.     The  rights  of  holders  of  preferred  stock 

shall  be  set  forth,  and  determined  by  the  by-laws  to  be  adopted  by  the  corporation 
at  its  organization  meeting.  Such  parts  of  said  by-laws  as  relate  to  the  rights 
of  preferred  stockholders  shall  not  thereafter  be  altered,  amended,  or  rescinded 
without  the  consent  of  all  of  said  preferred  stockholders. 

(II.)    PREFERRED   STOCK  CLAUSE  (Short  Form).' 

The  holders  of  preferred  stock  shall  be  entitled  to  non-cumulative  dividends 
thereon  at  the  rate  of,  but  not  to  exceed,  per  cent  for  each  and  every  fiscal  year 

of  the  company,  payable  out  of  any  and  all  surplus  or  net  profits  of  the  company  annu- 
ally, semiannually,  or  quarterly,  as  and  when  declared  by  the  board  of  directors. 
In  the  event  of  dissolution  or  liquidation  of  the  corporation,  the  holders  of  the  pre- 
ferred stock  shall  be  entitled  to  receive  the  par  value  of  their  preferred  shares  out 
of  the  assets  of  the  corporation  before  anything  shall  be  paid  thereon  to  the  holders 
of  the  common  stock.  The  holders  of  the  preferred  stock  shall  be  entitled  to  voting 
powers  in  the  corporation,  in  all  respects  the  same  as  appertain  to  the  holders  of  the 
common  stock. 

(III.)    PREFERRED   STOCK  CLAUSES. 

The  holders  of  preferred  stock  shall  be  entitled  to  cumulative  (or  non-cumula- 
tive) dividends  thereon  at  the  rate  of,  but  not  to  exceed,  per  cent  for  each 
aud  every  fiscal  year  of  the  company  payable  out  of  any  and  all  surplus  or  net  prof- 
its annually  (semi-annually  or  quarterly),  and  when  declared  by  the  board  of 
directors.  In  the  event  of  dissolution  or  liquidation  of  the  corporation  the  holders 
of  the  preferred  stock  shall  be  entitled  to  receive  the  par  value  of  their  preferred 
shares  out  of  the  assets  of  the  corporation  before  anything  shall  be  paid  thereon  to 
the  holders  of  the  common  stock.  The  holders  of  preferred  stock  shall  (not)  be 
entitled  to  (any)  all  voting  powers  in  the  corporation.  The  preferred  stock  shall 
be  subject  to  redemption  at  the  option  of  the  corporation  at  any  time  after  the 
day  of  ,  190  ,  at  the  price  of  $  for  each  .share,  and  the  amount 
of  dividends  cumulated  and  unpaid  thereon  at  the  date  of  redemption. 

The  holders  of  preferred  stock  shall  have  the  riffhl  at  any  time  to  eon  veil  the  same 
into  common  sloek  of  the  corporation  by  presenting  the  same  to  the  treasurer  of 
the  corporation  for  cancellation,  and  shall  then  he  entitled  to  receive  forthwith  an 
amount  of  common  stock  equal  to  the  par  value  of  the  preferred  stock  so  tendered 
for  purposes  of  conversion  into  common  stock. 

(i«;i 


INCORPORATION    AND    ORGANIZATION    OP    CORPORATIONS. 

(IV.)    PREFERRED   STOCK   CLAUSE  (Long  Form). 

From  time  to  time  the  preferred  stock  and  the  common  stock  may  be  increased 
according  to  law,  and  may  be  issued  in  such  amounts  and  proportions  as  shall  be 
determined  by  the  Board  of  Directors,  and  as  may  be  permitted  by  law. 

The  holders  of  the  preferred  stock  shall  be  entitled  to  receive  when  and  as  de- 
clared, from  the  surplus  or  net  profits  of  the  corporation,  yearly  dividends  at 
the  rate  of  per  centum   per  annum,  and  no  more,  payable   quarterly  on 

dates  to  be  fixed  by  the  By-Laws.  The  dividends  on  the  preferred  stock  shall  be 
cumulative,  and  shall  be  payable  before  any  dividends  on  the  common  stock  shall 
be  paid  or  set  apart  ;  so  that,  if  in  any  year  dividends  amounting  to  per 

centum  shall  not  have  been  paid  thereon,  the  deficiency  shall  be  payable  before  any 
dividends  shall  be  paid  upon  or  set  apart  for  the  common  stock. 

Whenever  all  cumulative  dividends  upon  the  preferred  stock  for  all  previous 
years  shall  have  been  declared  and  shall  have  become  payable,  and  the  accrued 
quarterly  instalments  for  the  current  year  shall  have  been  declared,  and  the  Com- 
pany shall  have  paid  such  cumulative  dividends  for  previous  years  and  such  accrued 
quarterly  instalments,  or  shall  have  set  aside  from  its  surplus  or  net  profits  a  sum 
sufficient  for  the  payment  thereof,  the  Board  of  Directors  may  declare  dividends  on 
the  common  stock,  payable  then  or  thereafter,  out  of  any  remaining  surplus  or  net 
profits. 

In  the  event  of  any  liquidation,  or  dissolution,  or  winding  up  (whether  voluntary 
or  involuntary)  of  the  corporation,  the  holders  of  the  preferred  stock  shall  be  entitled 
to  be  paid  in  full,  both  the  par  amount  of  their  shares  and  the  unpaid  dividends  ac- 
crued thereon,  before  any  amount  shall  be  paid  to  the  holders  of  the  common  stock  •. 
and  after  the  payment  to  the  holders  of  the  preferred  stock  of  its  par  value,  and  the 
unpaid  accrued  dividends  thereon,  the  remaining  assets  and  funds  shall  be  divided 
and  paid  to  the  holders  of  the  common  stock  pro  rata  according  to  their  respective 
shares. 

(V.)    PREFERRED   STOCK  CLAUSES. 
Special  Clause  for  Cumulative  Dividends. 

The  holders  of  the  preferred  stock  shall  be  entitled  to  receive,  when  and  as  de- 
clared from  the  surplus  profits  of  the  company,  yearly  dividends  at  the  rate  of  six 
per  cent  per  annum,  and  no  more,  payable  semiannually  on  dates  to  be  fixed  by 
the  by-laws.  The  dividends  on  the  preferred  stock  shall  be  cumulative,  and  shall 
be  payable  before  any  dividend  on  the  common  stock  shall  be  paid  or  set  apart,  so 
that  if  in  any  year  dividends  amounting  to  six  per  cent  shall  not  have  been  paid 
thereon,  the  deficiency  shall  be  payable  before  any  dividends  shall  be  paid  upon  or 
set  apart  for  the  common  stock. 

Whenever  all  cumulative  dividends  on  the  preferred  stock  for  all  previous  years 
shall  have  been  declared  aud  shall  have  become  payable,  and  the  accrued  semiannual 
instalment  for  the  current  year  shall  have  been  declared,  and  the  company  shall 
have  paid  such  cumulative  "dividends  for  previous  years  aud  such  accrued  semi- 
annual instalment  or  shall  have  set  aside  from  its  surplus  or  net  profits  a  sum  suffi- 
cient for  the  payment  thereof,  the  board  of  directors  may  declare  dividends  on  the 
common  stock  payable  then  or  thereafter  out  of  any  remaining  surplus  or  net  prof- 
its, provided,  however,  that  the  dividends  upon  the  common  stock  shall  be  so  lim- 
ited that  the  same  shall  never  in  any  one  year  exceed  the  rate  of  ten  per  cent,  so 
long  as  there  shall  remain  outstanding  and  unredeemed  any  of  the  four  and  a  half 
per  cent  mortgage  aud  collateral  trust  gold  bonds  of  the  company. 

In  distribution  of  assets  other  than  profits,  there  shall  be  paid,  as  far  as  the  same 
will  go,  first,  upon  the  preferred  stock  to  the  amount  of  the  par  value  thereof  and 
its  six  per  cent  cumulative  dividends  that  are  unpaid,  if  any,  less  the  amount,  if  any, 
paid  thereon,  in  any  previous  distribution  of  such  assets;  next,  upon  the  common 
stock,  to  the  amount  of  the  par  value  thereof,  less  the  amount,  if  any  paid  thereon  in 
any  previous  distribution  of  such  assets,  and  then  upon  the  two  classes  of  stock 
equally  per  share. 

662 


FORMS    AND    PRECEDENTS. 


FORMS   FOR  DRAWING   CHARTERS   IN   ALL 
THE   STATES   AND   TERRITORIES. 


ALABAMA. 
CERTIFICATE  OF  INCORPORATION 

OF   THE 

Company. 

Know  all  Men  by  these  Presents  :  That  we,  the  undersigned,  associate  our- 
selves together  for  the  purpose  of  forming  a  corporation  under  the  laws  of  the  State 
of  Alabama,  and  do  declare 

I.  That  the  name  of  the  corporation  shall  be  Company  (or 
corporation). 

II.  The  objects  for  which  the  corporation  is  formed  are  : 

III.  The  location  of  the  principal  office  of  the  corporation  within  the  State  is 

IV.  The  amount  of  the  capital  stock  shall  be  dollars  ($  ),  to  be 
divided  into  shares  of  the  par  value  of  ($  )  each.  (If 
preferred  stock  is  desired  this  clause  should  read  as  follows :  The  amount  of  the 
capital  stock  shall  be  dollars  ($  ),  of  which  shares  of  the 
par  value  of  dollars  each  shall  be  common  stock  and  shares  of 
the  par  value  of  dollars  ($  )  each  shall  be  preferred  stock.  The  pre- 
ferred stock  is  entitled  to  preference  and  priority  over  the  common  stock  in  manner 
following,  to  wit  :  ) 

The  amount  of  capital  stock  with  which  the  company  will  begin  business  will 
be  dollars  ($         ). 

V.  That  ,  residing  in   the  City  of  ,  County  of 

,  State  of  Alabama,  is  hereby  designated  by  the  undersigned  as  com- 
missioner for  said  Company  to  receive  subscriptions  to  the  capital 
stock  thereof. 

VI.  The  names  and  post-office  addresses  of  the  incorporators  and  the  number 
of  shares  subscribed  for  by  each  are  as  follows  : 

Names.  No.  of  Shares.  Addresses. 


VII.   The  names  and  post-office  addresses  of  the  directors  and  officers  chosen 
for  the  first  year  are  as  follows  : 

Names.  Post-office  Addresses. 


Directors. 


Officers.  Post-office  Addresses. 

President,  — ■ 

"Vice-President, 

Secretary,  

Treasurer, — 

VIII.    The  duration  of  the  company  shall  be  perpetual. 

6G3 


INCORPORATION    AND    ORGANIZATION    OP    CORPORATIONS. 

IX.  The  following  provisions  for  the  regulation  of  the  business  and  the  con- 
duct of  the  affairs  of  the  company  are  hereby  established  : 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals  this  day 

of  ,  190  .  . 


Signed,  sealed,  and  delivered  in  the  presence  of : 


State  of  Alabama,   7  sg 
County  of  £ 

I}  ,  a  Notary  Public  in  and  for  the  said  County  and  State, 

do  hereby  certify  that  ,  whose  names  are  signed  to  the  foregoing 

instrument,  and  who  are  known  to  me,  have  acknowledged  before  me  this  day  that, 
being  informed  of  the  contents  of  said  instrument,  they  have  severally  executed  the 
same  voluntarily  on  the  day  the  same  bears  date. 

Given  under  my  hand  this  day  of  ,  190   . 

,  Notary  Public, 
County, 
Alabama. 

TERRITORY  OF  ALASKA. 
ARTICLES  OF  INCORPORATION 

OF   THE 

Company. 

We,  the  undersigned,  ,  residents  of  the  District  of  , 

Territory  of  Alaska,  do  by  these  presents,  pursuant  to  and  in  conformity  with  the 
provisions  of  Section  Five  of  an  Act  of  Congress,  approved  March  2nd,  1903,  en- 
titled "  An  Act  Amending  the  Civil  Code  of  Alaska,  providing  for  the  Organization 
of  Private  Corporations  and  for  other  Purposes,"  associate  ourselves  together  as  a 
body  politic  and  corporate,  and  we  do  hereby  certify  in  writing : 

First.   The  corporate  name  and  style  of  our  said  corporation  shall  be : 

Second.    The  nature  and  character  of  the  business  to  be  carried  on  is  as  follows : 

Third.  The  principal  place  for  the  transaction  of  the  business  of  the  corpora- 
tion shall  be  at  in  the  Territory  of  Alaska. 

Fourth.  The  time  for  the  commencement  of  this  corporation  shall  be  the  date 
of  the  filing  of  these  articles  of  incorporation  in  the  office  of  the  Secretary  of 
the  District  of  ,  Territory  of  Alaska,  and  the  termination  thereof 

shall  be  fifty  years  thereafter. 

Fifth.    The  capital  stock  of  the  corporation  shall  be 
dollars,  divided  into  shares  of  the  par  value  of  dollars  per 

share.     (Also  state  how  the  same  shall  be  paid  in.) 

Sixth.  The  highest  amount  of  indebtedness  or  liability,  direct  or  contingent,  to 
which  this  corporation  is  at  any  time  subject  shall  be  dollars. 

Seventh.  The  names  and  residences  of  the  incorporators  of  this  corporation 
are  as  follows : 

Names.  Addresses. 


Eighth.    The  affairs  of  this  corporation  shall    be    conducted  by  a   Board  of 
Directors  who  shall  be  elected  annually  by  the  stockholders.     The  names 
and  post-office  addresses  of  the  Board  of  Directors  for  the  first  year  are  : 

Names.  Addresses. 


6G4 


FORMS    AND    PRECEDENTS. 


Ninth.    The  annual  meeting  of  the  stockholders  for  the  election  of  a  Board  of 
Directors  shall  be  held  on  the  day  of  in  each  year,  and  the 

Board  of  Directors  so  elected  shall  hold  office  for  a  period  of  one  year. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals  this  day 

of  ,  190     . 


[■  ss. 


State  of 
County  of 

I,  ,  a  Notary  Public  in  and  for  said  County  and  State,  do  hereby 

certify  that  ,  personally  known  to  me  to  "be  the  persons  whose 

names  are  subscribed  to  the  foregoing  instrument,  appeared  before  me  this  day  is 
person,  and  acknowledged  to  me  that  they  signed,  sealed,  and  delivered  the  said 
instrument  in  writing  as  their  free  and  voluntary  act  for  the  uses  and  purposes 
therein  set  forth. 

Given  under  my  hand  and  notarial  seal  this  day  of  ,  1904. 

,  Xotary  Public. 

County, 
State  of 


ARIZONA. 
ARTICLES   OF  INCORPORATION 

OF   THE 

Company. 


Know  all  Men  by  these  Presents  :  That  we,  the  undersigned,  have  this 
day  associated  ourselves  together  for  the  purpose  of  forming  a  corporation,  and  for 
that  purpose  do  adopt  the  following  charter  : 

First.     The  name  of  the  corporation  shall  be : 

Second.     The  names  of  the  incorporators  are : 

Third.  The  principal  place  in  which  the  business  of  the  corporation  within  the 
Territory  of  Arizona  is  to  be  transacted  is  at  County,  Arizona.     The  name 

of  the  agent  in  charge  thereof,  and  upon  whom  process  may  be  served  in  any  ac- 
tion, suit,  or  proceeding  that  may  be  had  or  brought  against  the  company  in  any 
of  the  courts  of  Arizona,  is  ,  residing  at  the  said  city  of 

Territory  of  Arizona. 

Fourth.  The  general  nature  of  the  business  in  which  this  corporation  shall 
engage  is  as  follows,  to  wit  : 

Fifth.     The  authorized  amount  of  capital  stock  of  this   corporation   shall  be 
dollars,  divided  into  shares  of  the  par  value  of 

dollars  each.  The  Board  of  Directors  may  cause  said  capital  siock  or  any  part 
thereof  to  be  subscribed  or  paid  for  in  cash,  in  the  purchase  or  exchange  or  trans- 
fer of  real  or  personal  property  or  for  services  rendered,  and  to  issue  or  cause  to 
be  issued  any  part  or  all  of  the  capital  stock  as  required,  at  anv  time  or  from  time 
to  tune,  and  when  so  issued  it  shall  be  fully  paid  and  non-assessable,  and  in  the 
absence  of  fraud  in  the  transaction,  the  judgment  of  the  Board  of  Directors  as 
to  the  value  of  the  property  purchased  or  transferred  or  exchanged  or  services  ren- 
dered shall  be  conclusive.  Shares  of  stock  maj  be  voted  by  proxy  at  all  stockhold- 
ers' meetings. 

Sixth.      The  time  of  the  commencement  of  this  corporation  -hall  be  the  date   of 

665 


INCORPORATION   AND    ORGANIZATION   OF    CORPORATIONS. 

the  filing  of  a  certified  copy  of  these  articles  of  incorporation  in  the  office  of  the 
Territorial  Auditor  of  Arizona,  and  termination  thereof  shall  be  twenty-five  years 
thereafter,  with  privilege  of  renewal  thereof  as  provided  by  law. 

Seventh.  The  affairs  of  this  corporation  shall  be  conducted  by  a  Board  of 
Directors,  who  shall  be  elected  annually  by  the  stockholders  at  the  annual  stock- 
holders' meeting.  Until  the  first  annual  meeting  of  stockholders,  and  until  their 
successors  are  elected  and  qualified,  the  following  named  persons  shall  constitute 
the  Board  of  Directors  of  the  corporation : 

Eighth.    The  annual  meeting  of  the  stockholders  shall  be  held  on  the 
in  of  each  year. 

Ninth.  The  highest  amount  of  indebtedness  or  liability,  direct  or  contingent, 
to  which  this  corporation  is  at  any  time  subject,  shall  be  : 

Tenth.  The  private  property  of  the  stockholders  of  this  corporation  shall  be 
exempt  from  corporate  debts  of  any  kind  whatever. 

Eleventh.  (Here  insert  any  clause  that  may  be  desired  for  the  regulation  of  the 
internal  affairs  of  the  corporation.) 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals  this  day 

of  ,  190     . 


[■  ss. 


(seal.) 
(seal.) 
(seal.) 


State  of 
County  of 

On  this  day  of  ,  190     ,  before  me,  a  Notary  Public,  in 

and  for  the  State  aforesaid,  residing  therein,  duly  commissioned  and  sworn,  per- 
sonally appeared  ,  known  to  me  to  be  the  persons  described  in,  and 
whose  names  are  subscribed  to  the  foregoing  instrument,  and  they  acknowledged 
to  me  that  they  executed  the  same  for  the  purpose  and  considerations  therein 
expressed. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal  at 
my  office  in  the  said  State  and  County,  the  day  and  year  last  above  written. 

,  Notary  Public. 
My  commission  expires : 


ARKANSAS. 
ARTICLES  OF  AGREEMENT  AND  INCORPORATION 

OF  THE 


Know  all  Men  by  these  Presents  :  That  the  corporators  hereinafter 
named  have  this  day,  and  by  these  presents,  formed  a  corporation  under  and  in 
pursuance  of  the  laws  of  the  State  of  Arkansas,  in  that  behalf  provided,  for 
"  Incorporations  for  manufacturing  and  other  lawful  business,"  and  in  evidence 
thereof  do  hereby  execute  the  following  Articles  of  Incorporation : 

First.   The  name  of  said  corporation  shall  be : 

Second.    The  corporators  are  : 

Third.    The  place  of  business  is  to  be  located  at  ,  and  its  office  for 

transaction  of  business  shall  be  in  or  at  such  other  place  as  the  Board 

of  Directors  may  select. 

Fourth.  The' general  nature  of  the  business  proposed  to  be  transacted  by  this 
corporation  is : 

Fifth.    The  amount  of  the  capital  stock  of  said  corporation  shall  be 
dollars ;  of  which  dollars  has  been  subscribed  by  the  corporators  afore- 

said, and  the  residue  thereof  may  be  issued  and   disposed  of  as  the  Board  of 
JJirectors  may  from  time  to  time  order  and  direct. 

666 


FORMS    AND    PRECEDENTS. 

Sixth.    The  said  capital  stock  shall  be  divided  into  shares  of  the  value 

of  dollars  each. 

Seventh.  The  atfairs  and  business  of  the  corporation  shall  be  conducted  and 
controlled  by  a  Board  of  Directors,  consisting  of  members,  all  of  whom 

shall  be  stockholders  of  the  corporation.  Said  Board  of  Directors  shall  elect  one 
of  its  members  as  President,  and  one  of  its  members  as  Vice-President,  and  shall 
also  elect  a  Secretary  and  Treasurer. 

Eighth.  The  first  election  of  Directors  shall  be  held  immediately  after  the 
organization  of  the  corporation,  and  said  Directors  shall  serve  for  one  year  and 
until  their  successors  are  elected. 

Ninth.  The  Board  of  Directors  are  empowered  to  ordain  and  establish  all 
by-laws  and  regulations  necessary  to  the  management  and  business  of  said  cor- 
poration, and  alter  and  repeal  same  at  pleasure. 

Tenth.  The  first  meeting  of  said  corporation  or  organization  shall  be  held,  in 
at    the  office   of  at  o'clock  on  the  day  of 

,  190  .     The  subscribers  hereto  hereby  waive  notice  of  said  meeting. 

In  Testimony   Whereof,  we  have  hereunto  set  our  hands  on  this,  the 
day  of  ,  190  . 


CERTIFICATE. 

Whereas,  have  associated  themselves  together  as  a  body  politic 

and  corporate,  to  be  known  as  ,  and 

Whereas,  The  said  corporators,  being  the  subscribers  to  the  capital  stock  of 
the  said  corporation,  have  waived  the  fifteen  days'  notice  as  required  by  law  and 
called  a  meeting  for  organization,  to  be  held  in  at  the  office  of 

at  o'clock  on  the  day  of  ,   190  . 

Whereas,  At  the  time  and  place  above  set  out,  a  meeting  of  the  subscribers 
aforesaid  was   held  to  organize  said  corporation  and  elect  Directors  ;  and 

Whereas,  At  said  meeting  the  following  gentlemen  were  elected  Directors, 
to  wit :  ,  and 

Whereas,   At  a  meeting  of  the  said  Board  of  Directors  was 

elected   President,  and  was  elected  Vice-President,  and  was 

elected  Secretary,  and  was  elected  Treasurer : 

N  >w,  Therefore,  The  said  as  President,  and  the  said 

as  President,  do,  in  pursuance  of  law,  issue  this,  their  Certificate,  verified  by  their 
oaths,  and  do  hereby  certify  as  follows: 

First.    Said  corporation  is  formed  for  the  purpose  of : 

Second.    Its  capital  stock    is  dollars,  divided   into   shares   of 

dollars  each. 

Third.  dollars  of  capital  stock  have  been  actually  paid  in  by  the 

subscribers   hereto. 

Fourth.  The  names  of  the  stockholders  and  the  number  of  shares  owned  by 
them,  respectively,  is  as  follows : 

Names.  No.  of  Shares. 


In  Testimony  Whereof,  the  said  ,  President  of  the  said  corpora- 

tion, and  ,  a  majority  of  the  Board  of  Directors  of  said  corporation 

have  hereunto  set  their  hands  on  this  day  of  ,  190  . 

,  President. 


Directors.  Directors. 

GG7 


INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS. 

State  of  Arkansas,   ) 
County  of  £ 

on  their  oaths  say  that  the  matters  and  things  in  the  foregoing  certificate  set  out 
are  true,  to  the  best  of  their  knowledge  and  belief. 

(Signed) 

Subscribed  and  sworn  to  before  me  this  day  of  ,  190  . 

In  Testimony  Whereof,  I  have  hereunto  set  my  hand  and  seal  of  office. 

CALIFORNIA. 
ARTICLES   OF  INCORPORATION 

OP   THE 

Company. 


Know  all  Men  by  these  Presents  :  That  we,  the  undersigned,  a  majority  of 
whom  are  citizens  and  residents  of  the  State  of  California,  have  this  day  volun- 
tarily associated  ourselves  together  for  the  purpose  of  forming  a  corporation  under 
the  laws  of  the  State  of  California. 

And  We  Hereby  Certify, 

First.    That  the  name  of  said  corporation  shall  be : 

Second.   That  the  purpose  for  which  it  is  formed  is : 

Third.  That  the  place  where  the  principal  business  of  said  corporation  is  to  be 
transacted  is  : 

Fourth.    That  the  term  for  which  said  corporation  is  to  exist  is 
years,  from  and  after  the  date  of  its  incorporation. 

Fifth.  That  the  number  of  Directors  of  said  corporation  shall  be  not  less  than 
three,  and  that  the  names  and  residences  of  Directors,  who  are  appointed  for  the 
first  year,  and  to  serve  uutil  the  election  and  qualification  of  their  successors,  are 
as  follows,  to  wit : 

Names.  Residences. 

Sixth.   That  the  amount  of  the  capital  stock  of  said  corporation  is 
dollars,  and  the  number  of  shares  into  which  it  is  divided  is  ,  of  the  par 

value  of  each. 

Seventh.  That  the  amount  of  said  capital  stock  which  has  been  actually 
subscribed  is  dollars,  and  the  following  are  the  names  of  the  persons 

by  whom  the  same  has  been  subscribed,  to  wit : 

Names  of  Subscribers.  No.  of  Shares.  Amount. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals,  this 
day  of  ,  A.  D.  190  . 

Signed  and  sealed  in  the  presence  of 


State  of  ? 

County  of  $  Ss> 

On  this             day  of                ,  in  the  year  A.  D.  nineteen  hundred  and  , 

before  me,                                          County,  personally  appeared  , 

known  to  me  to  be  the  person         whose  name         subscribed  to  the  within  in- 
strument, and  acknowledged  to  me  that            executed  the  same. 

In  Witness  Whereof  I  have  hereunto  set  my  hand  and  affixed  my  official  seal, 
the  day  and  year  last  above  written. 

(seal.)  ,  Notary  Public, 

County. 
008 


FORMS    AND    PRECEDENTS. 

State  of  l 

County  of  j  ss' 

I,  ,  County  Clerk  of  ,  County  of  ,  State  of  , 

do  hereby  certify  the  within  to  be  a  full,  true,  and  correct  copy  of  Articles  of  Incor- 
poration of  as  remains  on  file  in  this  office. 

In  Witness  Whereof,  I  have  hereunto  set  mv  hand  and  affixed  mv  Official  Seal, 
this  day  of  ,  A.  D.  190  . 

,  Clerk. 
B  ,  Deputy  Clerk. 

COLORADO. 
CERTIFICATE   OF  INCORPORATION 

OF 


Know   all  Men   by   these  Presents :   That    we,  residents   of  the 

State  of  ,  have  associated  ourselves  together  as  a  corporation  under  the 

name  and  style  of  "  The  Company,"  for  the  purpose  of  becoming  a 

body  politic  and  corporate,  under  and  by  virtue  of  the  laws  of  the  State  of  Colorado, 
and  in  accordance  witli  the  provisions  of  the  laws  of  said  State  of  Colorado,  we  do 
hereby  make,  execute,  and  acknowledge  these  triplicate  certificates  in  writing  of 
our  intention  so  to  become  a  body  corporate  by  virtue  of  said  laws,  which  when 
filed  shall  constitute  the  articles  of  incorporation  of 

First. 

The  corporate  name  and  style  of  our  said  company  shall  be  : 

Second. 

The  objects  for  which  our  said  company  is  formed  and  incorporated  are  for 
the  following  purposes,  to  wit :  (the  statement  of  objects  must  be  very  full,  as 
under  Colorado  laws  there  can  be  no  amendment  so  as  to  enlarge  the  corporate 
purposes). 

Third. 

The  capital  stock  of  said  company  is  dollars,  divided  into  shares 

of  the  par  value  of  dollars  each,  and  said  stock  shall  be  non-assessable. 

Fourth. 

Said  company  is  to  exist  for  years. 

Fifth. 

The  affairs  and  management  of  this  company  is  to  be  under  the  control  of  a 
Board  of  Directors,  and  are  hereby  selected  to  act  as 

said  Board  of  Directors,  and  to  manage  the  affairs  and  concerns  of  the  said  company 
for  the  first  year  of  its  corporate  existence. 

Sixth . 

The  operations  of  the  said  company  will  be  carried  on  in  the  County  of  , 

State  of  Colorado,  and  outside  of  said  Slate  of  Colorado,  in  any  State  or  Territory 
of  the  United  States,  and  the  principal  place  of  business  and  business  office  of  said 
company  shall  be  located  in  the  City  of  ,  in  the  County  of  ,  and  State 

of  Colorado  aforesaid. 

Seventh 

The  Board  of  Directors  shall  have  power  to  make  such  prudential  by-laws  as 
they  may  deem  proper  for  tin-  management  of  the  affairs  of  this  company,  according 
to  the  statute  in  such  case  made  and  provided. 

669 


INCORPORATION   AND   ORGANIZATION    OF   CORPORATIONS. 

Eighth. 

Meetings  of  the  Board  of  Directors  may  be  held  without  the  State  of  Colorado, 
if  the  by-laws  so  provide. 

In  Testimony  Whereof,  we  have  hereunto  set  our  hands  and  seals  this 
day  of  ,  190  .  


State  of  7  ss 

County  of  ) 

I,  ,  a  Notary  Public  in  and  for  said  County  and  State,  do  hereby 

certify  that  ,  personally  known  to  me  to  be  the  persons  whose  names 

are  subscribed  to  the  foregoing  instrument,  appeared  before  me  this  day  in  person, 
and  acknowledged  that  they  signed,  sealed,  and  delivered  the  said  instrument  in 
■writing  as  their  free  and  voluntary  act  for  the  uses  and  purposes  therein  set 
forth. 

Given  under  my  hand  and  notarial  seal  this  day  of  ,  190  . 

,  Notary  Public. 
My  commission  expires 


CONNECTICUT. 
CERTIFICATE  OF  INCORPORATION. 

We,  the  subscribers,  certify  that  we  do  hereby  associate  ourselves  as  a  body 
politic  aud  corporate  under  the  statute  laws  of  the  State  of  Connecticut ;  and  we 
further  certify : 

First.    That  the  name  of  the  corporation  is  (a)  The  Company, 

Corporation,  (b)  Incorporated. 

Second.    That  said  corporation  is  to  be  located  in  the  town  of  ,  in 

the  State  of  Connecticut. 

Third.  That  the  nature  of  the  business  to  be  transacted,  and  the  purposes  to 
be  promoted  or  carried  out,  by  said  corporation,  are  as  follows  • 

Fourth.  That  the  amount  of  the  capital  stock  of  said  corporation  hereby 
authorized  is  dollars,  divided  into  shares  of  the  par  value  of 

dollars  each,  which  stock  shall  be  divided  into  classes  as  follows  : 

Fifth.  That  the  amount  of  capital  stock  with  which  this  corporation  shall 
commence  business  is  dollars. 

Sixth.    That  the  duration  of  said  corporation  is  ««limited. 

Seventh.  The  following  provisions  for  the  regulation  of  the  business  and  the 
conduct  of  the  affairs  of  the  corporation  are  hereby  established : 

Signatures  op  Incorporators. 
Name.  Residence. 

of  State  of 

of  State  of 

of  State  of 

of  State  of 

of  State  of 

of  State  of 

of  State  of 

of  State  of 

of  State  of 

of  State  of 

of  State  of 

Dated  at                    this                    day  of  ,  190  . 

670 


FORMS   AND   PRECEDENTS. 

State  of  I  gs 

County  of  £ 

Personally  appeared  ,   being  all   of  the   incorporators   of  The- 

and  made  solemn  oath  to  the  truth  of  the  foregoing- 
certificate  by  them  respectively  subscribed,  before  me. 

,  Notary  Public. 

CERTIFICATE  OF   ORGANIZATION". 

The  undersigned,  a  majority  of  the  directors  of  The 
located  in  the  town  of  ,  hereby  certify  as  follows : 

First.   That   the   amount   of  the   authorized   capital   stock  subscribed   for  is 
shares,  being  shares  of  preferred  stock  and 

shares  of  common  slock,  amounting  to  dollars,  and  being  not  less 

than  the  full  amount  of  dollars,  with  which  the  incorporators  in  the 

certificate  of  incorporation  stated  the  company  would  begin  business. 

Second.   That  the  amount  paid  thereon  in  cash  is  dollars. 

Third.    That  the  amount  paid  thereon  in  property  other  than  cash  is 
dollars. 

Fourth.   That  dollars  has  been  paid  upon  each  share  subscribed 

for  except  shares,  upon  which  dollars  only  has  been  paid. 

Fifth.  That  the  name,  residence,  and  address  of  each  of  the  original  subscribers  to 
said  stock,  with  the  number  aud  class  of  shares  subscribed  for  by  each,  are  as  follows  : 

Name.       Residence.       P.  0.  Address.       No.  of  Shares.       No.  of  Shares. 

Preferred.  Common. 

Sixth.  That  the  directors  and  officers  of  said  corporation  have  been  duly 
elected,  and  that  its  by-laws  have  been  adopted. 

Seventh.  The  name,  residence,  and  post-office  address  of  each  of  the  officers  and 
directors  of  said  corporation  are  as  follows  : 

Name.  Residence.  P.  O.  Address. 

President, 
Vice-President, 
Treasurer, 
Asst.  Treasurer, 
Secretary, 
Asst.  Secretary, 

Directors.  Residence.  P.  O.  Address. 

Eighth.   The  location  of  its  principal  office  in  this  State  is  No. 
Street,  ,  and  the  name  of  the  agent  or  person  iu  charge  thereof  on 

whom  process  against  it  may  be  served  is 

Dated  at  this  day  of 


A  Majority 
of  the 

Directors. 


State  of  Connecticut,      ) 
County  of  J  S3, 

Personally  appeared 

signers  of  the  foregoing  certificate  of  organization,  a  majority  of  the  Directors  of 
The  ,  and  made  oath  to  the  truth  of  the 

same  before  me 

,  Notary  Public. 

,  Justice  of  the  Peace. 

671 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

CERTIFICATE   OF  INCORPORATION. 

Trust  and  Investment  Company  (Delaware  Charter). 

This  is  to  Certify,  that  the  undersigned  do  hereby  associate  themselves  to 
establish  a  corporation  under  and  by  virtue  of  the  provisions  of  an  Act  of  the 
General  Assembly  of  the  State  of  Delaware,  entitled  "  An  Act  Providing  a  General 
Corporation  Law,"  and  do  severally  agree  to  take  the  number  of  shares  of  capital 
stock  as  hereinafter  stated,  and  that 

First. 
The  name  of  the  corporation  is  Company. 

Second. 

The  principal  office  or  place  of  business  of  the  corporation  in  the  State  of  Dela- 
ware is  to  be  located  in  the  City  of  Wilmington,  New  Castle  County,  and  said 
office  is  to  be  registered  with 

Third. 

The  nature  of  the  business  and  the  objects  and  purposes  proposed  to  be  trans- 
acted, promoted,  or  carried  on  by  the  corporation  are  as  follows  : 

To  carry  on  a  banking  and  trust  company  business,  and  in  connection  there- 
with to  discount  bills,  notes,  and  other  evidences  of  indebtedness ;  to  receive  and  pay 
out,  with  or  without  interest,  or  receive  on  special  deposit  money,  bullion  or 
foreign  coin,  stocks,  bonds,  or  other  securities  ;  to  buy  and  sell  foreign  and  domes- 
tic exchange,  gold  and  silver  bullion,  foreign  coins,  bonds,  stock,  bills  of  exchange, 
notes,  and  other  negotiable  paper ;  and  to  lend  money  on  personal  security.  To 
act  as  trustee  for  individuals  and  corporations.' 

To  carry  on  and  undertake  any  business,  undertaking,  transaction,  or  operation 
commonly  carried  on  or  undertaken  by  capitalists,  promoters,  financiers,  contrac- 
tors, merchants,  commission  men  and  agents,  and  in  the  course  of  such  busiuess  to 
draw,  accept,  endorse,  acquire,  aud  sell  all  or  any  negotiable  or  transferable  instru- 
ments and  secui'ities,  including  debentures,  bonds,  notes,  and  bills  of  exchange. 
To  issue  on  commission,  subscribe  for,  acquire,  hold,  sell,  exchange,  and  deal  in 
shares,  stocks,  bonds,  obligations,  or  securities  of  any  public  or  private  corporation, 
government,  or  municipality,  and  the  Company  shall  have  express  power  to  hold, 
purchase,  or  otherwise  acquire,  to  sell,  assign,  transfer,  mortgage,  pledge,  or  other- 
wise dispose  of  shai-es  of  the  capital  stock,  bonds,  debentures,  or  other  evidences  of 
indebtedness  created  by  any  other  corporation  or  corporations,  and  while  the 
owner  thereof  to  exercise  all  the  rights  and  privileges  of  ownership,  including  the 
right  to  vote  thereon. 

To  form,  promote,  and  assist  financially  or  otherwise  companies,  syndicates, 
partnerships,  and  associations  of  all  kinds,  and  to  give  any  guarantee  in  connection 
therewith  or  otherwise  for  the  payment  of  money,  or  for  the  performance  of  any 
obUgation  or  undertaking.  To  acquire,  improve,  manage,  work,  develop,  exercise 
all  rights  in  respect  of,  lease,  mortgage,  sell,  dispose  of,  turn  to  account  and  other- 
wise deal  with  property  of  all  kinds,  and  in  particular  business  concerns  and 
undertakings.     To  act  as  fiscal  agent  for  persons,  firms,  and  corporations. 

To  buy,  or  otherwise  acquire,  to  hold,  own,  mortgage,  pledge,  sell,  assign,  and 
transfer,  or  otherwise  dispose  of,  and  to  invest,  trade  in,  and  deal  in  any  goods, 
wares,  and  merchandise  and  property  of  every  class  and  description,  including 
patents  and  patent  rights,  inventions  or  other  improvements,  trade  marks,  options, 
shares  or  rights  in  corporations,  real  property  of  any  description,  including  mines, 
railroads,  and  also  bonds,  mortgages,  securities  of  any  kind  or  description,  or  other 
evidences  of  indebtedness,  and  investments  or  investment  securities  of  any  kind  or 
description  whatsoever,  to  act  as  the  agent  for  the  sale  or  purchase  of  any  of  the 
same,  or  for  any  other  purpose  connected  with  any  of  the  said  above-described 
powers;  to  promote  corporate  enterprises  of  any  kind,  including  industrial  enter- 

672 


FORMS    AND    PRECEDENTS. 

prises,  railroads,  mines,  real  estate  companies,  banking  institutions,  and  all  busi- 
nesses or  enterprises  of  any  character,  and  to  own  and  operate  or  finance  the  same  ; 
to  aid  in  any  manner  any  corporation  or  enterprise  in  which  the  Company  is 
interested;  to  endorse,  underwrite,  or  guarantee  stock,  securities,  or  undertaking 
of  any  corporation  or  persons. 

To  raise  money  by  the  issue  of  shares  or  otherwise,  and  to  invest  the  moneys  so 
raised  in  the  purchase  of,  or  otherwise  to  acquire  and  hold  any  of  the  investments 
following,  that  is  to  say,  any  stocks,  bonds,  debentures,  shares,  scrip,  or  securities 
issued,  or  having  any  guarantee  by  any  government,  municipality,  trust,  local 
authority,  or  other  body,  incorporated  or  unincorporated,  public  or  private,  of  the 
United  States,  or  in  any  country  or  State  under  the  protection  of  the  United  Stales, 
or  any  stock,  bonds,  debentures,  shares,  scrip,  or  securities  issued  or  having  any 
guarantee  by  any  corporation  or  company  incorporated,  constituted  or  carrying  on 
business  in  the  United  States  or  elsewhere. 

To  borrow  or  raise  money  by  the  issue  or  sale  of  any  bonds,  mortgages,  deben- 
tures, or  debenture  stock  of  the  Company,  and  to  invest  any  money  so  raised  in  any 
such  investments  as  aforesaid. 

To  acquire  any  such  investments  as  aforesaid  by  original  subscription,  under- 
writing, participation  in  syndicates  or  otherwise,  and  whether  or  not  fully  paid  up, 
and  to  make  payments  thereon  as  called  for,  or  in  advance  of  calls  or  otherwise, 
and  to  underwrite  or  subscribe  for  the  same  conditionally  or  otherwise,  and  either 
with  a  view  to  investment  or  for  re-sale  or  otherwise,  and  to  vary  the  investments 
of  the  Company,  and  generally  to  sell,  exchange,  or  otherwise  dispose  of,  deal  with, 
and  turn  to  account  any  of  the  assets  of  the  Company. 

To  negotiate  loans,  to  offer  for  public  subscription,  or  otherwise  aid  or  assist  in 
placing  any  such  investments  as  aforesaid  ;  to  give  any  guarantee  in  relation  to  any 
such  investments  issued  by  or  acquired  through  the  Company  or  otherwise. 

To  offer  for  public  subscription  any  shares  or  stock  1  the  capital  of,  or  deben- 
tures or  debenture  stock  or  other  securities  of,  or  othei  ise  to  establish  or  promote, 
or  concur  in  establishing  or  promoting,  any  company,  association,  undertaking,  or 
public  or  private  body. 

To  guarantee  the  payment  of  dividends  or  interest  on  any  stock  shares,  deben- 
tures, or  other  securities  issued  by,  or  any  other  contract  or  obligation  of  any  such 
company,  association,  undertaking,  or  public  or  private  body. 

To  purchase,  lease,  hire,  or  otherwise  acquire  real  and  personal  property,  im- 
proved and  unimproved,  of  every  kind  and  description,  and  to  sell,  dispose  of, 
lease,  convey,  and  mortgage  said  property,  or  any  part  thereof ;  to  acquire,  hold, 
lease,  manage,  operate,  develop,  control,  build,  erect,  maintain  for  the  purposes  of 
said  Company,  construct,  reconstruct,  or  purchase  either  directly  or  through 
ownership  of  stock  in  any  corporation,  auy  lands,  buildings,  offices,  stores,  ware- 
houses, mills,  shops,  factories,  plants,  gas  houses,  machinery,  rights,  easements, 
permits,  privileges,  franchises,  and  licenses,  and  all  other  things  which  may  at  any 
time  be  necessary  or  convenient  in  the  judgment  of  the  Board  of  Directors  for  the 
purposes  of  the  Company.  To  sell,  lease,  hire,  or  otherwise  dispose  of  the  lands, 
buildings,  or  other  property  of  the  Company  or  any  part  thereof. 

To  hold,  purchase,  or  otherwise  acquire,  to  sell,  assign,  transfer,  mortgage, 
pledge,  or  otherwise  dispose  of  shares  of  the  capital  stock  and  bonds,  debentures,  or 
other  evidences  of  indebtedness  created  by  other  corporation  or  corporations,  and 
while  the  holder  thereof,  to  exercise  alf  the  rights  and  privileges  of  ownership, 
including  the  right  to  vote  thereon. 

To  conduct  its  business,  and  have  one  or  more  offices,  and  unlimitedly  and 
without  restriction  to  hold,  purchase,  lease,  mortgage,  and  convey  real  and  personal 
property  in  or  out  of  this  State,  and  in  such  place  and  places  in  the  several  States, 
Territories,  colonial  possessions,  or  territorial  acquisitions  of  the  United  States,  as 
shall  from  time  to  time  be  found  necessary  and  convenient  for  the  purposes  of  the 
Company's  business. 

In  General,  to  carry  on  any  other  business  in  connection  therewith,  whether 
manufacturing  or  otherwise,  and  with  all  the  powers  conferred  by  the  laws  of 
Delaware  under  the  act  hereinbefore  referred  to. 

G73 


INCORPORATION  AND   ORGANIZATION   OF  CORPORATIONS. 

It  is  the  intention  that  the  objects  specified  in  the  third  paragraph  shall,  except 
where  otherwise  expressed  in  said  paragraph,  be  nowise  limited  or  restricted  by 
reference  to  or  inference  from  the  terms  of  any  other  clause  or  paragraph  in  this 
charter,  but  that  the  objects  specified  in  each  of  the  clauses  of  this  paragraph  shall 
be  regarded  as  independent  objects. 

Fourth. 

The  amount  of  the  total  authorized  capital  stock  of  the  corporation  is 
dollars  ($  ),  divided  into  shares  of  the  par  value  of  dollars 

each.     The  amount  of  capital  with  which  the  corporation  will  begin  business  is 
dollars. 

Fifth. 

The  names  and  places  of  residence  of  the  original  subscribers  to  the  capital  stock 
a^e: 

Names.  Residences.  No.  of  Shares. 

Sixth. 

The  corporation  shall  have  perpetual  existence. 

Seventh. 
The  private  property  of  the  stockholders  shall  not  be  subject  to  corporate  debts. 

Eighth. 

The  officers  and  persons  by  whom  the  affairs  of  the  corporation  are  to  be  con- 
ducted are  its  Directors,  who  may  act  through  a  President,  Vice-President,  Secre- 
tary, and  Treasurer,  and  such  assistants  to  them  and  subordinate  officers,  agents,  and 
employes  as  may  be  selected  pursuant  to  the  by-laws  of  the  corporation,  the  resolu- 
tion of  said  Directors,  or  authority  given  by  them. 

Directors  shall  be  elected  at  the  principal  office  or  place  of  business  of  the  Com- 
pany at  the  annual   election  to  be  held  by  the  stockholders   on   the  first 
in  iu  each  year  between  the  hours  of        A.  M.  and         P.  M. 

Ninth. 

The  Board  of  Directors  shall  have  power  without  the  assent  or  vote  of  the 
stockholders  to  make,  alter,  amend,  and  repeal  the  by-laws  of  this  corporation, 
to  authorize  and  cause  to  be  executed  mortgages  and  liens  upon  the  real  and 
personal  property  of  this  corporation. 

The  Directors  shall,  from  time  to  time,  determine  whether  and  to  what  extent 
and  at  what  times  and  places  and  under  what  conditions  the  accounts  and  books  of 
the  corporation  or  any  of  them  shall  be  open  to  the  inspection  of  the  stockholders ; 
and  no  stockholder  shall  have  any  right  to  inspect  any  account  or  book  of  the  cor- 
poration except  as  conferred  by  statute  or  authorized  by  the  Directors,  or  by  a 
resolution  of  the  stockholders. 

The  Directors  shall  have  power  to  hold  their  meetings,  and  to  keep  the  books  of 
the  corporation  (except  the  stock  and  transfer  books)  outside  of  the  State,  at  such 
places  as  may  be  from  time  to  time  designated  by  them. 

The  corporation  may  conduct  its  business  in  the  State  of  Delaware,  in  other 
States,  the  District  of  Columbia,  the  Territories  and  Colonies  of  the  United  States 
and  in  foreign  countries,  and  may  have  one  or  more  offices  out  of  this  State,  and 
may  hold,  purchase,  mortgage,  lease,  and  convey  real  and  personal  property  out  of 
the  State  of  Delaware. 

Witnessour  hands  and  seals  this  day  of  ,  190  . 


In  presence  of : 

674 


FORMS   AND   PRECEDENTS. 

State  of   _  ?ss 

County  of  \ 

Be  it  Remembered,  that  on  this  day  of  ,  A.  D.   190     ,  per- 

sonally came  before  me,  ,  a  Notary  Public  for  the  said  State  of  , 

,  the  original  corporators  named  in  the  foregoing  certificate,  who 
signed  and  sealed  the  same,  known  to  me  personally  to  be  such,  and  severally  ac- 
knowledged the  same  to  be  the  act  and  deed  of  the  signers  respectively,  and  that  the 
facts  therein  stated  are  truly  set.  forth. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  seal  of  office  the  day  and 
year  aforesaid.  ,  Notary  Public. 

DISTRICT   OF    COLUMBIA. 

CERTIFICATE   OF  INCORPORATION. 

We,  the  undersigned,  being  all  of  the  trustees  of  the  ,  a  majority  of 

whom  are  residents  of  the  District  of  Columbia,  do  by  these  presents,  pursuant  to 
and  in  conformity  with  the  provisions  of  six  hundred  and  five  (605)  and  six 
hundred  and  six  (606)  of  an  Act  of  Congress,  approved  March  3rd.  1901,  entitled 
"  An  Act  to  establish  a  Code  of  Law  for  the  District  of  Columbia,"  and  with  the 
amendments  thereto  made  by  an  Act  approved  June  30th,  1902,  entitled  "  An  Act 
to  amend  an  Act  entitled  '  An  Act  to  establish  a  Code  of  Law  for  the  District  of 
Columbia,'  "  associate  ourselves  together  as  a  body  politic  and  corporate,  and  we 
do  hereby  certify  in  writing  : 

First.     That  the  name  of  the  company  shall  be : 

Second.     That  the  purposes  for  which  said  corporation  is  formed  are  : 

Third.     That  the  existence  of  this  company  shall  be  perpetual. 

Fourth.     That  the  capital  stock  of  this  company  shall  be  dollars, 

divided  into  shares  of  the  par  value  of  dollars  each. 

Fifth.     That  the  number  of  trustees  who  shall  manage  the  concerns  of  the  com- 
pany for  the  first  year  or  until  their  successors  are  elected  shall  be,  namely  : 
Names.  Residences. 


The  Board  of  Trustees,  by  the  affirmative  vote  of  a  majority  of  the  whole  Board, 
may  appoint  from  the  Trustees  an  Executive  Committee  of  members, 

of  which  a  majority  shall  constitute  a  quorum,  and  to  such  extent  as  may  be  pro- 
vided in  the  by-laws,  such  committee  shall  have  and  may  exercise  all  or  any  of 
the  powers  of  the  Board  of  Trustees. 

Sixth.  That  the  place  in  the  District  of  Columbia  in  which  the  operations 
of  the  company  are  to  be  carried  on  is  at  in  t he  City  of  Washington, 

District  of  Columbia. 

Witness  our  hands  this  day  of  190  . 


City  of  Washington,    \ 
District  of  Columbia,  y 

X;  ,  a  Notary  Public  in  and  for  the  District  of  Columbia,  do 

hereby  certify  that  ,   whose   names  arc  signed  to    the 

writing  hereto  annexed,  bearing  date  the  day  of  190  ,  personally 

appeared  before  me  in  the  District  of  Columbia  on  the  day  and  year  aforesaid, 
and  separately,  severally,  and  individually  acknowledged  the  same  before  me,  and 
that  they  severally  signed  the  same  tor  the  purposes  therein  set  forth. 

Given  under  my  hand  and  notarial  seal  day  of  ,  190  . 

,  Notary  Public. 

(See  page  817  for  form  of  certificate  of  paymeni  on  capital  Mock.) 

675 


INCORPORATION  AND    ORGANIZATION   OF   CORPORATIONS. 

FLORIDA. 

(Form  for  publication  of  notice  of  intention  to  apply  for  charter.) 

NOTICE   OF  INCORPORATION. 

The   undersigned   hereby  give   notice   that   on  ,    the  day   of 

,  A.  D.  190  ,  at  o'clock  M,  or  as  soon  thereafter  as  they  can 

be  heard,  they  will  apply  to   the  Honorable  ,  Governor  of  the 

State  of  Florida,  at  his  office,  in  the  Capitol  Building  of  said  State,  in  the  City  of 
Tallahassee,  for  Letters  Patent  incorporating  them,  their  associates  and  successors, 
into  a  body  politic  and  corporate  in  deed  and  in  law,  under  the  name  of 
Company,  under  the  following  Charter  and  Articles  of  Incorporation,  the  original 
of  which  will  be  on  file  in  the  office  of  the  Secretary  of  State  of  said  State  of 
Florida,  at  the  City  of  Tallahassee,  during  the  time  required  by  law  for  the  publica- 
tion of  this  notice. 

(Names  of  incorporators.) 

Charter  of  the  Company. 

The  undersigned  hereby  agree  to  become  associated  together,  and  do  hereby 
associate  themselves  together  for  the  purpose  of  becoming  a  body  politic  and 
corporate  under  the  laws  of  the  State  of  Florida,  the  provisions  of  which  are  hereby 
accepted.  The  following  Articles  of  Incorporation  shall  constitute  and  become 
its  Charter  upon  the  issuance  of  Letters  Patent  according  to  law  : 

1. 

The  name  of  this  corporation  shall  be  .     Its  principal  office  and  place 

of  business  shall  be  the  City  of  ,  County,  Florida.     Branch 

offices  may  be  established  at  such  other  places  as  may  be  selected  by  the 
Board  of  Directors. 

2. 

The  general  nature  of  the  business  to  be  transacted  by  the  said  corporation 
shall  be: 

3. 

The  amount  of  capital  stock  of  this  corporation  shall  be  dollars, 

divided  into  shares  of  the  par  value  of  dollar    each  :  said  capital  stock 

shall  be  paid  for  in  lawful  money  of  the  United  States,  ten  per  cent  of  which  shall 
be  paid  within  ten  days  after  Letters  Patent  shall  have  been  granted  and  before 
said  corporation  shall  transact  any  business.  The  unpaid  balances  due  on  stock  of 
the  subscribers  hereto  shall  be  paid  in  lawful  money  of  the  United  States  in  such 
instalments  and  within  such  time  as  may  be  designated  by  the  Board  of  Directors, 
provided  that  subscribers  shall  be  entitled  to  ten  days'  notice  of  demand  for  such 
deferred  payments.  The  remaining  stock  shall  be  sold  by  the  Directors  from  time 
to  time,  as  the  same  may  be  needed,  at  not  less  than  its  par  value. 


This  corporation  shall  exist  for  a  period  of  years,  unless  sooner  dissolved 

according  to  law. 


The  business  of  this  corporation  shall  be  conducted  by  a  Board  of  not  less  than 
nor  more  than  Directors. 

The  Board  of  Directors  shall  select  from  themselves  a  President,  Vice-President, 
Secretary,  and  Treasurer.  One  person  may  hold  the  office  of  Secretary  and  Treas- 
urer. Said  Board  of  Directors  shall  have  authority  to  appoint  all  necessary  agents 
of  this  corporation. 

676 


FORMS    AND    PRECEDENTS. 

Annual  meetings  of  the  stockholders  shall  be  held  at  the  principal  offices  of  tlie 
corporation  on  the  in  of  each  year,  at  ten  o'clock  A.  M. 

or  as  soon  thereafter  as  practicable,  at  which  the  Board  of  Directors  shall  be  duly 
elected  by  the  stockholders. 

The  By-Laws  for  the  government  of  this  corporation  shall  be  adopted  at  the 
first  annual  meeting  of  the  stockholders,  or  as  soon  thereafter  as  practicable. 

Until  a  Board  of  Directors  shall  have  been  first  duly  chosen  by  the  stockholders, 
the  business  of  the  said  corporation  shall  be  conducted  by  the  following  named 
persons  and  officers  : 

,  President. 
,  Vice-President. 
,  Secretary. 
,  Treasurer. 
Temporary  By-Laws  may  be  adopted  by  said  officers  until  the  first  annual  meet- 
ing of  the  stockholders. 

6. 

The  highest  amount  of  indebtedness  or  liability  this  corporation  shall  at  any 
time  subject  itself  is  dollars. 

7. 

The  names  and  residences  of  the  subscribers  to  these  Articles  of  Incorporation, 
together  with  the  amount  of  capital  subscribed  by  each,  are  as  follows: 

Names.  Residences.  No.  of  Shares. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  this  the         day  of 
A.  D.  190  . 

(Signatures  of  subscribers.) 

Witness  : 

State  of  Florida,  7  sg 
County  of  ) 

I,  ,  a  Notary  Public  for  the  State  of  Florida  at  large,  do  hereby 

certify  that  ,  who  are  to  me  well  known,  this  day  appeared  before 

me  and  each  for  himself  acknowledged  that  he  signed  the  foregoing  Articles  of 
Incorporation  and  the  accompanying  notice  for  the  uses  and  purposes  therein 
stated. 

la  Witness  Whereof,  I  have  hereunto  set  my  hand  and  seal  of  office  this 
day  of  ,  A.  D.  190  . 

,  Notary  Public. 
State  of  Florida  at  large. 
Commission  expires 


GEORGIA. 

APPLICATION  FOR  CHARTER. 

State  of  Georgia, 

County  of  ,  To  the  Superior  Court  of  said  County. 

The  petition  of  respectfully  shows  -. 

I.  That  they  desire  for  themselves,  their  associates,  successors,  and  assigns,  to> 
be  constituted  a  body  corporate  under  the  name  and  style  of  Company, 
for  the  term  of  twenty  years  with  the  privilego  of  renewal  at  the  expiration  of  said 
lime  as  provided  by  law. 

II.  They  desire  for  said  corporation  the  right  to  buy,  sell,  hold,  encumber,  and 
otherwise  depose  of  real  and  personal  property,  which  may  be  necessary  and  udvau- 

G77 


INCORPORATION   AND   ORGANIZATION    OF   CORPORATIONS. 

tageous  to  the  purposes  of  said  corporation,  to  sue  and  be  sued,  and  to  have  a 
common  seal,  to  receive  donations  by  gift  or  will,  to  make  by-laws  for  its  govern- 
ment, elect  directors  for  the  management  of  its  affairs  and  confer  upon  them  the 
rio-ht  to  elect  officers  and  appoint  employees,  together  with  all  other  rights,  powers, 
and  privileges,  incident,  useful,  or  necessary  to  carry  into  effect  the  purposes  of  the 
corporation  as  hereinafter  set  forth  or  for  securing  debts  due  it. 

III.  The  object  of  the  corporation  is  pecuniary  gain  to  its  stockholders. 

IV.  The  particular  business  proposed  to  be  carried  on  by  said  corporation  is  : 

V.  The  capital  stock  of  said  corporation  shall  be  dollars,  divided  into 

shares  of  dollars  each ;  at  least  ten  per  cent  of  which  is  to  be 

actually  paid  in  before  commencing  business.  But  petitioners  desire  that  said  cor- 
poration shall  have  the  right  to  increase  said  capital  stock  to  any  amount  not 
exceeding  dollars,  whenever  the  holders  of  a  majority  of  the  stock  may  so 

determine. 

VI.  The  principal  place  of  business  of  said  corporation  shall  be  in  the  City  of 

,  County  and  State  aforesaid,  but  petitioners  desire  that  said  corporation 
shall  have  the  right  to  establish  brauch  offices  or  agencies  at  any  other  places,  either 
within  or  without  the  State  of  Georgia,  as  the  holders  of  a  majority  of  the  stock 
may  determine  upon. 

Wherefore  petitioners  pray  that  after  this  petition  has  been  filed  and  published 
in  accordance  with  the  law  an  order  be  passed  by  the  Court  declaring  them  a  body 
corporate  under  the  name  and  style  aforesaid,  and  granting  to  said  corporation  all 
the  right,  power,  and  privileges  set  out  and  prayed  for  in  this  application,  or  which 
may  be  incident,  usual,  and  necessary  under  the  laws  of  said  State,  for  the  purposes 
of  their  incorporation.     And  your  petitioner  will  ever  pray,  etc. 

,  Petitioner  s  Attorney. 


IDAHO. 
ARTICLES   OF  INCORPORATION 

OF   THE 

Company. 


Know  all  Men  by  these  Presents :  That  we,  the  undersigned,  at  least  one  of 
whom  is  a  bona  fide  resident  of  the  State  of  Idaho,  have  this  day  voluntarily  as- 
sociated ourselves  together  for  the  purpose  of  forming  a  corporation  under  the  laws 
of  the  State  of  Idaho.     And  we  hereby  certify  : 

First.    That  the  name  of  the  corporation  shall  be  : 

Second.   That  the  purpose  for  which  it  is  formed  shall  be  : 

Third.    That  the  place  where  the  principal  business  is  to  be  transacted  is : 

Fourth.   That  the  term  for  which  it  is  to  exist  is  (not  to  exceed  fifty 

years)  from  and  after  the  date  of  its  incorporation. 

Fifth.   That  the  number  of  its  directors  (or  trustees)  shall  be  (a  majority 

must  be,  in  all  cases,  citizens,  and  actual  bona  fide  residents  within  the  State),  and 
the  names  and  residences  of  those  who  are  appointed  for  the  first  year  are : 

Sixth.    That  the  amount  of  the  capital  stock  of  said  corporation  is  dol- 

lars, and  the  number  of  shares  into  which  it  is  divided  is  ,  of  the  par  value 

of  dollars  each. 

Seventh.  That  the  amount  of  capital  stock  which  has  been  actually  subscribed 
is  dollars,  which  has  been  subscribed  by  the  following  persons  : 

Names  of  Subscribers.  No.  of  Shares.  Par  Value. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  this  day  of 

A.  D.  190  . 

Signed  and  executed  in  the  presence  of : 

678 


FORMS   AND   PRECEDENTS. 

State  of  ) 

County  of  $ 

On  this  day  of  ,  A.  D.  190  ,  before  me  personally 

appeared  ,  known  to  me  to  be  the  persons  whose  names  are  subscribed 

to  the  within  instrument,  and  acknowledged  to  me  that  they  executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  Official  Seal 
the  day  and  year  in  this  certificate  first  above  written. 
(seal.) 


ILLINOIS. 

State  of  Illinois,   } 
County  of  £  SS* 

To  ,  Secretary  of  State  : 

"We,  the   undersigned,  ,  propose  to  form   a   corporation, 

under  an  Act  of  the  General  Assembly  of  the  State  of  Illinois,  entitled"  An  Act 
Concerning  Corporations,"  approved  April  18th,  1872,  and  all  acts  amendatory 
thereof;  and  for  the  purpose  of  such  organization  we  hereby  state  as  follows, 
to  wit : 

First.   The  name  of  such  corporation  is  : 

Second.    The  objects  for  which  it  is  formed  are  : 

Third.    The  capital  stock  of  the  company  shall  be  dollars. 

Fourth.   The  amount  of  each  share  is  dollars. 

Fifth.    The  number  of  shares  is 

Sixth.   The  location  of  the  principal  office  is  at  No.  Street,  in  the  City  of 

,  in  the  County  of  ,  State  of  Illinois, 

Seventh.  The  duration  of  the  corporation  shall  be  (not  to  exceed  ninety-nine) 
years. 


State  of  Illinois,    7 
County  of  ) 

I,  ,  a  Notary  Public  in  and  for  the  County  of  and  State 

of  Illinois,  do  hereby  certify  that  on  the  day  of  ,  190  ,  personally 

appeared  before  me  ,  to  me  personally  known  to  be  the  same 

persons  who  executed  the  foregoing  statement,  and  severally  acknowledged  that 
they  executed  the  same  for  the  purposes  therein  set  forth. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  seal  the  day  and  year 
above  written. 

Notary  Public. 
(seal.) 

To  , 

Secretary  of  State  of  the  State  of  Illinois  : 

The  Commissioners,  duly  authorized  to  open  Books  of  Subscription  to  the  capital 
stock  of  the  Company,  pursuant  to  license  heretofore  issued,  bear- 

ing date  the  day  of  ,  A.  D.  190  ,  do  hereby  report  that  they 

opened  Books  of  Subscription  to  the  Capital  Stock  of  said  Company,  and  that 
the  said  stock  was  fully  subscribed  ;  that  the  following  is  a  true  copy  of  such 
subscription,  viz. : 

We,  the  undersigned,  hereby  severally  subscribe  for  the  number  of  shares  set 
opposite  our  respective  names,  to  the  Capital  Stock  of  Company, 

(;7!» 


INCORPORATION  AND    ORGANIZATION   OF   CORPORATIONS. 

and  we  severally  agree  to  pay  the  said  Company,  for  each  share,  the  sum  of 
dollars. 

Name.  Shares.  Amount. 


That  the  aforesaid  stockholders  waived  notice  of  the  time,  place,  and  object  of 
the    nieeliug  of   stockholders   herein  next  set  forth,  which  was  held  on  , 

A.  D.  190  ,  at  which  meeting  directors  were  elected  as  stated  herein,  and  the  fol- 
lowing is  the  original  waiver : 

We,  the  undersigned,  being  all  of  the  stockholders  of  the  Com- 

pany, organized  under  the  laws  of  the  State  of  Illinois,  do  hereby  severally  waive 
notice  of  the  time  and  place  of  the  meeting  of  the  stockholders  of  said 

company,  and  the  purpose  thereof,  and  any  and  all  every  notice  required  by  the 
laws  of  the  State  of  Illinois. 


That  on  the  day  of  ,  A.  D.  190  ,  at  the  ,  Illinois, 

at  the  hour  of  M.,  they  convened  a  meeting  of  the  subscribers  aforesaid 

pursuant  to  notice  required  by  law,  which  said  notice  was  deposited  in  the  post- 
office,  properly  addressed  to  each  subscriber,  ten  days  before  the  time  fixed  therein, 
a  copy  of  which  said  notice  is  as  follows,  to  wit : 

To 

You  are  hereby  notified  that  the  Capital  Stock  of  has  been  fully 

subscribed,  and  that  a  meeting  of  the  subscribers  of  such  stock  will  be  held  at 

on  the  day  of  A.  D.  190    ,  at 

o'clock  M.,  for  the  purpose  of  electing  a  Board  of  Directors  for  said  Com- 

pany and  for  the  transaction  of  such  other  business  as  may  be  deemed  necessary. 

Signed 


Commissioners. 


That  said  subscribers  met  at  the  time  and  place  in  said  notice  specified,  and  pro- 
ceeded to  elect  Directors,  and  that  the  following  persons  were  duly  elected  for  the 
term  of  year         ,  viz.  : 


And  that  the  post-office  address  of  the  business  office  of  said  Company  is  at 
Number  Street  in  the  City  of  ,in  the  County  of 

and  State  of  Illinois. 

— >  Commissioners. 


State  of  ) 

County  of  $  ss* 

On  this  day  of  ,  A.  D.  190  ,  personally  appeared  before  me, 

a  Notary  Public  in  and  for  said  County  in  said  State,  ,  and  made  oath 

that  the  foregoing  report  by  them  subscribed  is  true  in  substance  and  in  fact. 

,  Notary  Public. 

680 


FORMS   AND    PRECEDENTS. 

INDIANA. 
ARTICLES  OF  INCORPORATION 

OF   TUE 

Company. 

We,  the  undersigned,  hereby  associate  ourselves  together  pursuant  to  the  stat- 
utes of  tne  State  of  Indiana  for  the  organization  of  corporations  by  the  following 
written  articles : 

Art.  One.  —  Name. 
The  name  shall  be : 

Art.  Two.  —  Capital  Stock. 

The  capital  stock  of  this  association  shall  be  dollars,  divided  into 

shares  of  dollars  each. 

Art.  Three.  —  Object. 

The  object  of  this  association  and  the  proposed  plan  for  the  transaction  of  its 
business  shall  be  : 

(To  be  stated  in  all  cases.  Care  should  be  taken  to  name  as  broad  an  object  as 
possible  and  at  the  same  time  to  avoid  mentioning  any  of  the  proposed  powers  of 
the  corporation.) 

Art.  Four.  —  Place  of  Operations. 

The  business  of  this  corporation  shall  be  carried  on  in : 
(To  be  stated  in  all  cases.     Where  the  work  is  from  one  point  to  another,  this 
should  be  stated.     For  railroads,  name  all  counties  through  which  the  road  passes 
and  give  length  as  near  as  possible.) 

Art.  Five.  —  Number  of  Directors. 

There  shall  be  directors  for  this  corporation,  who  after  the  first  year 

shall  be  elected  annually  by  the  stockholders.  All  the  corporate  officers  shall  be 
appointed  by  the  directors. 

Art.  Six.  —  Directors  for  First  Year. 

The  following  directors  shall  manage  the  business  and  prudential  concerns  of 
this  corporation  for  the  first  year  of  its  existence. 

Art.  Seven. — Term  of  Existence. 

The  association  shall  have  an  existence  of  (not  to  exceed  fifty)  years 

from  the  date  hereof. 

In   Witness  Whereof,  we  have  hereunto  set  our  hands  this  day  of 

,  A.  D.  190  . 

(The  subscribers  affix,  in  addition  to  their  names,  their  residences,  and,  if  a  stock 
corporation,  the  number  of  shares  taken  by  each.  In  the  case  of  savings  banks 
state  occupation  and  post-office  address.  Articles  for  the  incorporation  of  educa- 
tional and  religious  corporations  must  be  sworn  to.  Articles  for  Board  of  Trade, 
steam  packet,  telegraph,  telephone,  building  and  loan,  health  resort,  Y.  M.  0.  A., 
boards  of  relief  for  orphans,  etc.,  and  manufacturing  companies  must  be  acknowl- 
edged as  deeds  are  acknowledged.     All  others  are  signed  merely.) 

State  of  Indiana,      > 
County  of  > 

Be  It  Remembered,   that  on    this  day  of  ,  190  ,   before  me,  a 

Notary    Public,  in  and  for  County,  Indiana,  duly  commissioned   and  qualified, 

personally  appeared  (names  of  incorporators)  the  parties  named  in  the  foregoing 
Articles  of  Incorporation,  and  severally  acknowledged  the;  execution  of  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal 
the  day  and  year  aforesaid. 

Notary  Public, 
Count \,  Indiana. 

681 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

IOWA. 
ARTICLES  OF  INCORPORATION 

OF   THE 

Company. 


We,  whose  names  are  hereunto  subscribed,  have  associated  ourselves  as  a  body 
corporate,  under  the  provisions  of  Chapter  1,  Title  IX.  of  the  Code  of  Iowa,  and 
acts  amendatory  thereto,  and  to  that  end  have  adopted  the  following  articles  of 
incorporation. 

Article  I. 

The  name  of  this  corporation  shall  be : 

Article  II. 

The  principal  place  of  business  of  this  corporation  shall  be  at  the  city  of 
in  the  county  of  ,  and  State  of  Iowa. 

(Note.  If  the  corporation  does  not  transact  business  in  this  State,  it  is  not  necessary  that 
the  articles  name  its  principal  place  of  business,  or  that  such  principal  place  of  business  be  in 
this  State.) 

Article  III. 

The  general  nature  of  the  business  to  be  transacted  by  this  corporation  shall  be  : 

(Note.  It  is  customary  to  state  the  general  nature  of  the  business  to  be  transacted  quite 
fully,  making  this  statement  broad  enough  to  cover  all  the  contingencies  that  may  possibly 
arise.) 

Article  IV. 

This  corporation  shall  have  all  of  the  powers  necessary  for,  or  incidental  to,  the 
convenient  transaction  of  the  business  for  which  it  has  been  organized,  including 
the  power  to  borrow  money,  and  to  issue  its  negotiable  notes,  bonds,  or  other  evi- 
dences of  such  indebtedness,  and  to  secure  the  repayment  of  the  same  by  liens 
upon  all  or  any  portion  of  its  property,  real  or  personal,  by  way  of  mortgage  or 
otherwise,  and  including  the  power  to  own,  lease,  buy,  and  sell  real  estate ;  and 
further  among  its  powers  shall  be  the  following : 

1.  To  have  perpetual  succession; 

2.  To  sue  and  be  sued  by  its  corporate  name ; 

3.  To  have  a  common  seal,  which  it  may  alter  at  pleasure ; 

4.  To  render  the  interests  of  the  stockholders  transferable ; 

5.  To  exempt  the  private  property  of  its  members  from  liability  for  corporate 
debts ; 

6.  To  make  contracts,  acquire  and  transfer  property,  —  possessing  the  same 
powers  in  such  respects  as  natural  persons ; 

7.  To  establish  by-laws,  and  make  all  rules  and  regulations  necessary  for  the 
management  of  its  affairs. 

(Note.  This  section  is  not  absolutely  necessary.  It  is,  however,  customary,  and  the  pro- 
visions, especially  with  reference  to  borrowing  money,  etc.,  will  be  found  in  actual  practice 
to  facilitate  such  transactions.) 

Article  V. 

The  amount  of  the  authorized  capital  stock  of  this  corporation  is  the  sum  of 
dollars  divided  into  shares,  each  of  the  par  value 

of  dollars.     Not  less  than  dollars  of  the  capital  stock 

of  this  corporation  shall  be  paid  in  in  cash,  or  in  property  at  its  reasonable  cash 
value,  before  the  corporation  transacts  business  except  the  business  incident  to  its 
organization. 

682 


FORMS  AND   PRECEDENTS. 

(1)  The  remainder  of  the  capital  stock  of  this  corporation  shall  be  issued  and 
paid  in  from  time  to  time  as  the  boar  I  of  directors  may  direct. 

(2)  The  par  value  of  all  stock  shall  be  paid  in,  either  in  cash  or  in  property  at 
its  reasonable  cash  value,  at  the  time  that  the  stock  is  issued. 

(Note.  The  sentence  indicated  as  (1)  above,  may  be  omitted  if  the  stock  is  all  to  be 
paid  in  when  the  corporation  commences  business.  If  it  is  not  all  to  be  so  paid  in,  there 
should  be  something  of  this  character  inserted,  prescribing  when  the  remainder  of  the  stock 
shall  be  issued.  The  sentence  (1)  follows  the  method  usually  adopted  in  Iowa,  but  any 
method  may  be  adopted  which  makes  the  articles  state  when  the  stock  not  issued  when  the 
corporation  is  organized   shall  be  issued.) 

(Sentence  (2)  above,  should  be  omitted  unless  the  stock  is  to  be  paid  up  as  stated.  If  the 
stock  is  to  be  paid  up  entirely  in  cash  when  issued,  or  all  of  it  in  property  when  issued, 
modify  this  article  to  conform  to  the  facts.  It  is  not  essential  that  this  sentence  be  inserted, 
but  if  the  stock  is  to  be  fully  paid,  it  is  desirable  that  the  articles  should  show  it.) 

Article  VI. 

This  corporation  shall  commence  on  the  day  of  ,  A.  D.  19    ,  and 

shall  continue  for  the  term  of  twenty  years  thereafter,  with  the  right  of  renewal  as 
prodded  by  law,  unless  sooner  dissolved  by  a  vote  of  not  less  than  of  the  stock 

then  outstanding. 

(Note.  Under  the  law  it  takes  unanimous  consent  to  dissolve  before  the  expiration  of 
the  term  unless  the  articles  provide  otherwise.  It  is  therefore  not  unusual  to  put  in  a  pro- 
vision that  a  designated  majority,  as  two-thirds  or  three-fourths,  may  dissolve  the  corpora- 
tion.   The  italicized  portion  above  is,  however,  not  necessary,  if  such  right  is  not  desired.) 

Article  VII. 

The  affairs  of  this  corporation  shall  be  conducted  by  a  board  of  not  less  than 
nor  more  than  directors. 

Within  said  limits  the  number  of  directors  may  be  fixed  by  the  stockholders  at 
anv  regular  or  special  meeting;  until  otherwise  fixed  by  the  stockholders  the  board 
of  directors  shall  consist  of  members. 

The  board  of  directors  shall  have  general  charge  of  the  business  and  affairs  of 
this  corporation,  and  all  of  the  powers  of  this  corporation  are  vested  in  its  board 
of  directors  except  as  otherwise  provided  by  law,  or  by  the  by-laws  of  this  corpora- 
tion, and  subject  to  such  action  restricting  said  powers  as  may  be  taken  from  time 
to  time  by  the  stockholders,  either  at  an  annual  or  at  a  special  meeting,  duly  called 
therefor. 

The  directors  of  this  corporation  may  delegate  their  powers  and  may  in  writing 
authorize  others  to  act  for  them,  as  their  proxies,  at  any  meeting  or  meetings  of 
its  board  of  directors ;  provided,  however,  that  the  stockholders  of  this  corpora- 
tion may  at  any  time  limit,  restrict,  or  prohibit  such  delegation  of  power  by  its 
directors,  and  while  so  limited  or  restricted  said  power  shall  only  be  delegated  pur- 
suant to  such  limitations  or  restrictions;  and  if  so  prohibited  it  shall  not  be  dele- 
gated during  the  continuance  of  such  prohibition. 

(Note.  Much  of  the  above  is  not  necessary.  It  has,  however,  proved  to  be  a  matter  of 
verv  great  convenience.  In  lieu  of  the  above  the  following  article  would  till  the  requirements 
of  the  law : 

"  The  affairs  of  this  corporation  shall  be  conducted  by  a  board  of  directors 

who  shall  have  general  charge  of  its  business.") 

Article  VIII. 

The  officers  of  this  corporation  shall  be  a  president,  vice-president,  secretary, 
and  treasurer.  The  directors  may  appoint  a  cashier  and  executive  committee  and 
such  other  officers  as  the  convenient  transaction  of  its  business  may  require. 

All  officers  and  directors  of  this  corporation  shall  hold  office  for  one  year,  M 
until  their  successors  are  chosen  and  qualified,  and  anv  vacancy  i"  any  office,  or  in 
the  board  of  directors,  may  be  filled  by  the  remaining  directors  until  the  successor 

(is:; 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

of  the  person  thus  chosen  to  fill  such  vacancy  is  elected  by  the  stockholders  or 
directors,  at  an  annual  or  special  meeting,  and  has  duly  qualified. 

Article  IX. 

The  board  of  directors  of  this  corporation  shall  be  elected  at  the  annual  meeting- 
of  the  stockholders,  which  shall  be  held  on  the  second  Tuesday  of  in  each 

year,  commencing  with  the  year  A.D.  19  ,  at  the  principal  office  of  the  company 
at  such  hour  as  may  be  fixed  by  the  directors  or  by  the  by-laws.  The  officers  of 
this  corporation  shall  be  chosen  by  the  directors  at  the  annual  meeting  of  the 
directors,  which  shall  be  held  each  year  immediately  after  the  annual  meeting  of 
the  stockholders. 

Until  the  annual  meeting  of  the  stockholders  in  the  year  A.D.  19  ,  and  until 
their  successors  are  chosen  and  have  qualified,  shall  constitute  the  board 

of  directors  of  this  corporation,  and  its  officers  shall  be  president, 

vice-president,  secretary,  and  treasurer. 

(Note.     Of  course  any  date  may  be  fixed  for  the  annual  meeting.) 

Article  X. 

Each  director  shall  be  a  stockholder,  and  if  any  director  shall  cease  to  be  a  stock- 
holder he  shall  forthwith  by  virtue  of  that  fact  cease  to  be  a  director.  Two  or  more 
offices  may  be  held  by  the  same  person  at  the  same  time. 

(Note.    The  preceding  article  is  not  necessary  to  a  legal  organization.) 

Article  XL 

At  all  meetings  of  the  stockholders  each  stockholder  shall  be  entitled  to  one 
vote  for  each  share  of  stock  held  by  him,  which  votes  may  be  cast  either  in  person 
or  by  proxy  duly  authorized  in  writing. 

(Note.     The  preceding  article  is  not  necessary  to  a  legal  organization). 

Article  XII. 

The  highest  amount  of  indebtedness  to  which  this  corporation  shall  at  any  time- 
subject  itself  shall  be  an  amount  not  in  excess  of  two-thirds  of  its  capital  stock  then 
issued  and  outstanding. 

Article  XIII. 

The  private  property  of  the  stockholders  of  this  corporation  shall  be  exempt  from 
corporate  debts. 

Article  XIV. 

These  articles  may  be  amended  at  any  annual  meeting  of  the  stockholders  or  at 
any  special  meeting  called  for  that  purpose  ;  but  no  such  amendment  shall  be  made 
without  the  affirmative  vote  in  its  favor  of  of  the  shares  of  stock  then 

outstanding. 

(Note.  This  article  is  probably  unnecessary  but  it  is  better  to  have  it,  and  it  is  re- 
quired, if  an  amendment  by  a  bare  majority  of  a  quorum  is  to  be  precluded.) 

In  Witness  Whereof,  we  have  hereunto  subscribed  our  names  on  this  day 

of  A.  D.  19     . 

State  of  ") 

County  of  )  ss' 

Before  me,  ,  a  notary  public,  in  and  for  said  county,  personally 

appeared  ,  said  persons  being  to  me  personally  known  to  be  the  iden- 

tical persons  whose  names  are  subscribed  in  the  foregoing  articles  of  incorporation* 

684 


FORMS   AND   PRECEDENTS. 

■and  each  for  himself  acknowledged  the  same  to  be  his  free  and  voluntary  act  and 
deed  for  the  uses  and  purposes  therein  expressed. 

Witness  my  hand  and  notarial  seal  at  ,  in  the  county  of 

and  State  of  Iowa,  the  day  and  year  last  above  written. 

,  Notary  Public  in  and  for  said  count;/  and  State. 

(Note.     It  is  not  necessary  that  the  incorporators  subscribe  for  any  stock,  and  they 
need  not  become  stockholders.) 


KANSAS. 

APPLICATION  FOR  CHARTER. 

To  the  Charter  Board  of  the  State  of  Kansas  :  The  undersigned  hereby  apply  to 
the  Charter  Board  of  the  State  of  Kansas,  consisting  of  the  Attorney-General,  Secre- 
tary of  State,  and  State  Bank  Commissioner,  for  permission  to  organize  a  private 
corporation  under  the  law  of  the  State  of  Kansas,  and  for  that  purpose  make  the 
following  statement,  to  wit : 

First. 

The  name  of  the  proposed  corporation  shall  be : 

Second. 

The  place  where  the  principal  office  or  place  of  business  of  said  corporation  is 
to  be  located  is  : 

Third. 

The  length  of  time  for  which  said  corporation  is  to  exist  shall  be  years. 

Fourth. 

The  full  nature  and  character  of  the  business  in  which  said  corporation  proposes 
to  engage  is : 

Fifth. 

The  names  and  addresses  of  the  proposed  incorporators  are : 

Sixth. 

The  proposed  amount  of  the  capital  of  said  corporation  is  dollars,  to 

be  divided  into  shares,  of  dollars  each. 

We  further  state  that  the  above  application  is  made  in  good  faith,  with  the  in- 
tention  that  said  corporation  shall  actually  engage  in  the  business  specified,  and 
none  other. 

In  Witness  Whereof  we,  the  above-named  incorporators,  have  hereunto  sub- 
scribed our  names,  this  day  of  ,  A.  D.  190  . 

State  of  Kansas,     ) 
County  of  \ 

Personally  appeared  before  me,  a  ,  in  and  for  said  county  and  State, 

the  above-named  ,  who  are  personally  known  to  me  to  be  the 

same  persons  who  executed  the  foregoing  instrument  in  writing,  and  they  each 
duly  acknowledged  the  execution  of  the  same. 

In  Testimony  Whereof,  I  have  hereunto  subscribed  my  name  and  affixed  my  seal, 
this  day  of  ,  A.  D.  190  . 

(My  commission  expires  ,  190  .) 

G85 


INCORPORATION  AND   ORGANIZATION   OF  CORPORATIONS. 
CHARTER 

OF 


The  undersigned,  citizens  of  the  State  of  Kansas,  do  hereby  voluntarily  associate 
ourselves  together  for  the  purpose  of  forming  a  private  corporation  under  the  laws 
of  the  State  of  Kansas,  and  do  hereby  certify  : 

First. 
That  the  name  of  this  corporation  shall  be  The 

Second. 
That  the  purposes  for  which  this  corporation  is  formed  are  to : 

Third. 
That  the  place  where  its  business  is  to  be  transacted  at : 

Fourth. 
That  the  term  for  which  this  corporation  is  to  exist  is : 

Fifth. 

That  the  number  of  directors  of  this  corporation  shall  be  ,  and  the 

names  and  residences  of  those  who  are  appointed  for  the  first  year  are : 

Sixth. 

That  the  estimated  value  of  the  goods,  chattels,  lands,  rights,  and  credits  owned 
by  the  corporation  is  dollars. 

That  the  amount  of  the  capital  stock  of  this  corporation  shall  be  dol- 

lars, and  shall  be  divided  into  shares,  of  dollars  each. 

Seventh. 

That  the  names  and  residences  of  the  stockholders  of  said  corporation,  and  the 
number  of  shares  held  by  each,  are  as  follows,  to  wit: 

Names.  Residences.  No.  of  Shares. 

In  Testimony  Whereof,  we  have  hereunto  subscribed  our  names,  this 
day  of  ,  A.  D.  190  . 

State  of  Kansas,     } 
County,   | 

Personally  appeared  before  me,  a  Notary  Public  in  and  for  County, 

Kansas,  the  above-named  who  are  personally  known  to  me  to 

be  the  same  persons  who  executed  the  foregoing  instrument  of  writing,  and  duly 
acknowledged  the  execution  of  the  same. 

In  Testimony  Whereof,  I  have  hereunto  subscribed  my  name  and  affixed  my 
notarial  seal,  this  day  of  ,  A.  D.  190  . 

(seal  ) 

,  Notary  Public. 

(My  commission  expires  .) 

Office  of  Treasurer  of  State. 

Received  of  the  sum  of  dollars,  the  same  being  the 

Charter  Fee  for  the 

Dated  this  day  of  ,  A.  D.  190  . 

,  Treasurer  of  State  of  Kansas. 
By 
686 


FORMS  AND   PRECEDENTS. 

KENTUCKY. 

ARTICLES  OF  INCORPORATION. 

The  corporators  whose  names  are  hereto  signed  have  executed  these  articles  of 
incorporation  for  the  purpose  of  forming  a  corporation  under  the  laws  of  the  State 
of  Kentucky,  in  accordance  with  the  following  provisions : 

1.  The  name  of  the  corporation  shall  be: 

2.  The  place  where  the  principal  office  of  the  corporation  shall  be  is  the  City  of 

,  County  of  ,  State  of  Kentucky. 

3.  The  purposes  for  which  this  corporation  is  formed  are  : 

4.  The  amount  of  the  capital  stock  of  this  corporation  shall  be 

dollars,  divided  into  shares  of  the  par  value  of  dollars  each.     (If 

preferred  stock  is  desired,  insert  provision  therefor  at  this  point.) 

5.  The  names  and  residences  of  the  stockholders  and  the  number  of  shares  sub- 
scribed for  by  each  are  as  follows : 

6.  This  corporation  shall  begin  on  ,  and  the  period  of  continuance  shall 
be                 years  (or  perpetual). 

7.  The  affairs  of  the  corporation  are  to  be  conducted  by  (state  the  officers  to 
conduct  the  affairs  of  the  corporation),  who  shall  be  elected  annually  at  (name,  time, 
and  place). 

8.  The  corporation  shall  not  at  any  time  incur  a  higher  amount  of  indebtedness 
or  liability  than  dollars. 

9.  The  private  property  of  the  stockholders  shall  not  be  subject  to  the  corpo- 
rate debts  (or  shall  be  subject,  and  state  to  what  extent). 

In  Witness  Whereof,  we  have  hereunto  subscribed  our  names  this  day  of 

,  A.  D.  190     . 

State  of  Kentucky,    \ 
County  of  \  ss> 

I  ,  a  Notary  Public  in  and  for  said  county  and  State,  do  hereoy 

certify  that  this  instrument  of  writing  from  (here  insert  names  of  incorporators)  was 
this  day  produced  to  me  by  the  above  parties,  and  was  acknowledged  by  the 
said  to  be  their  act  and  deed. 

Given  under  my  hand  and  seal  this  day  of  ,  190  . 

,  Notary  Public. 

LOUISIANA. 
CERTIFICATE  OF  INCORPORATION 


Company. 


State  of  Louisiana, 
Parish  of  , 

City  of 

Be  It  Known,  that  on  this  day  of  ,  in  the  year  one  thousand 

nine  hundred  and  ,  before  me,  ,  a  Notary  Public  in  and  for  the 

Parish  of  ,  State  of  Louisiana,  duly  commissioned  and  qualified,  and  in  the 

presence  of  the  witnesses  hereinafter  named  and  undersigned,  personally  came  and 
appeared  the  persons  whose  names  are  hereunto  subscribed,  all  above  the  lull  ae;e 
01  majority,  who  severally  declared  that,  availing  themselves  of  the  provisions  of 
the  laws  of  this  State  relative  to  the  organization  of  corporations,  they  have  formed 
and  organized,  and  by  these  presents  do  form  themselves  and  of  those  whom  they 
represent  into  and  constitute  a  corporation  and  body  politic  in  law  for  the  objects 


v  INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

;aud  purposes,  and  under  the  stipulations  and  agreements  hereinafter  set  forth  and 
expressed,  which  they  hereby  adopt  as  their  charter.  (If  a  limited  corporation  is 
to  be  formed,  the  above  clause  should  read,  from  the  words  "  availing  themselves," 
as  follows:  Availing  themselves  of  Act  36  of  1888  as  well  as  the  general  laws  of 
the  State  relative  to  the  organization  of  corporations,  they  hereby  form  themselves 
into  and  constitute  a  corporation  for  the  objects  and  purposes,  and  under  the  stip- 
ulations hereinafter  set  forth  :  ) 

Article  1. 

The  name  and  title  of  the  corporation  hereby  formed  is  declared  to  be 

Its  domicile  shall  be  in  the  City  of  ,  State  of  Louisiana,  and  it  shall 

have  and  enjoy  succession  by  its  corporate  name  for  a  period  of  years 

from  and  alter  the  date  hereof. 

This  corporation  shall  have  power  and  authority  to  contract,  sue,  and  be  sued 
in  its  corporate  name ;  to  make  and  use  a  corporate  seal ;  to  hold,  receive,  hire, 
and  purchase  real  and  personal  property  and  to  sell,  mortgage,  or  pledge  the  same, 
and  to  borrow  money  and  issue  bonds,  notes,  and  other  obligations. 

All  citations  or  other  legal  process  shall  be  served  upon  the  President,  and  in 
the  event  of  his  absence  or  inability  to  act  from  any  cause,  the  same  shall  be  served 
upon  the  Vice-President  or  Secretary-Treasurer. 

Article  II. 

The  objects  and  purposes  for  which  this  corporation  is  organized,  and  the  nature 
of  the  business  to  be  carried  on  by  it  are  hereby  declared  to  be : 
(Objects  and  purposes.) 

Article  III- 

The  capital  stock  of  this  corporation  is  hereby  fixed  at  the  sum  of  dol- 

lars, divided  into  and  represented  by  shares  of  the  par  value  of 

dollars,  which  shall  be  paid  for  in  at  the  time  of  subscription. 

This  corporation  shall  commence  business  as  soon  as  dollars  of  its  cap- 

ital stock  shall  have  been  subscribed  for. 

Article  IV. 

All  the  corporate  powers  of  this  corporation  shall  be  vested  in  and  exercised  by 
a  board  of  directors,  to  be  composed  of  stockholders,  of  whom 

shall  constitute  a  quorum  for  transacting  all  business.  The  Board  of  Directors 
shall  be  vested  with  full  power  and  authority  to  make  all  contracts,  purchases,  and 
sales,  and  adopt  all  by-laws,  rules,  and  regulations  for  the  government  of  the  busi- 
ness and  affairs  of  the  company,  and  alter,  amend,  and  change  the  same  at  pleasure ; 
.appoint,  hire,  and  discharge  all  officers,  agents,  and  employees,  fix  all  salaries,  and 
generally  do  and  perform  all  things  necessary  in  the  transaction  of  the  business  and' 
affairs  of  the  company.  Any  vacancy  occurring  in  said  board  shall  be  filled  by  the 
stockholders  in  the  manner  as  provided  for  in  the  election  of  directors. 

The  first  Board  of  Directors  of  this  corporation  shall  consist  of  (names),  with 

the  said  as  President,  as  Vice-Presideut,  and 

as  Secretary-Treasurer,  who  shall  hold  their   offices  until  the 

first  (name  day)  in  ,'l90  ,  or  until  their  successors  are  duly  elected  and 

qualified. 

On  the  first  (name  day)  in  ,  190  ,  and  annually  thereafter,  an  election 

.for  directors  shall  be  held  at  the  office  of  the  company,  under  the  supervision  of 
commissioners  to  be  appointed  by  the  President,  and  the  directors  then 
elected  shall  take  their  seats  immediately  and  shall  hold  office  until  their  successors 
are  duly  elected  aud  qualified.  Each  board  shall  elect  its  own  officers,  which  shall 
fconsist  of  a  President,  a  Vice-President,  and  a  Secretary-Treasurer. 

All  corporate  elections  shall  be  by  ballot,  and  a  majority  of  the  votes  cast  shall 

688 


FORMS    AXD    PRECEDENTS. 

elect,  and  each  share  of  stock  shall  be  entitled  to  one  vote  either  in  person  or  by 
proxy. 

Written  notice  of  elections  shall  be  given  to  each  stockholder  by  the  Secretary- 
Treasurer  at  least  days  prior  to  elections. 

Article  V. 

This  act  of  incorporation  may  be  changed,  altered,  or  modified,  or  this  corpora- 
tion dissolved,  with  the  assent  of  three-fourths  of  the  stock  present  or  represented 
at  any  general  meeting  of  the  stockholders  convened  for  that  purpose  after  thirty 
days'  prior  notice  of  such  meeting  shall  have  been  given  by  publication  in  one  of 
the  daily  newspapers  published  in  the  City  of  by  five  publications  during 

said  period,  and  such  changes  as  may  be  made  in  reference  to  the  capital  stock 
shall  require  in  addition  days'  notice  in  writing  to  each  stockholder. 

Article  VI. 

Whenever  this  corporation  is  dissolved,  either  by  limitation  of  its  charter  or 
from  any  cause,  its  affairs  shall  be  liquidated  by  commissioners  to  be  appointed 

from  among  the  stockholders  at  a  meeting  of  the  stockholders  convened  for  that 
purpose  after  days'  prior  notice  shall  have  been  given  by  the  Secretary  to 

each  stockholder.  Said  commissioners  shall  remain  in  office,  until  the  affairs  of  said 
corporation  shall  have  been  fully  liquidated.  In  case  of  the  death  of  either  com- 
missioner, the  survivor  shall  continue  to  act. 

Article  VII. 

No  stockholder  of  this  corporation  shall  ever  be  held  liable  or  responsible  for 
the  contracts  or  faults  thereof  in  any  further  sum  than  the  unpaid  balance  due  to 
the  corporation  on  the  shares  owned  by  him,  nor  shall  any  mere  formality  in  organ- 
ization have  the  effect  of  rendering  this  charter  null,  nor  of  exposing  a  stockholder 
to  any  liability  beyond  the  amount  of  his  stock. 

The  subscribers  hereto  have  each  written  opposite  their  names  the  number  of 
shares  subscribed  for,  so  that  this  act  may  also  serve  as  the  original  subscription 
fist. 

Thus  done  and  passed  in  my  notarial  office  in  the  City  of  aforesaid, 

in  the  presence  of  and  ,  competent  witnesses  of  lawful 

age  and  residing  in  this  city,  who  hereunto  subscribe  their  names,  together  with 
said  parties  and  me,  notary,  on  the  day  and  date  set  forth  in  the  caption  hereof. 
Original  signed  : 

and  others. 

Witnesses : 


,  Notary  Public. 

I,  the  undersigned,  Recorder  of  Mortgages,  iu  and  for  the  Parish  of  , 

State  of  Louisiana,  do  hereby  certify  that  the  above  and  foregoing  act  of  incorpora- 
tion of  the  Company  was  this  day  duly  recorded  in  my  office,  in  book 
,  folio            ,  City  of  ,     (date) 
Signed : 

(seal.)  Recorder. 

I  hereby  certify  the  foregoing  and  within  to  be  a  true  and  correct  copy  of  the 
original  act  of  incorporation  of  the  Company,  together  with  the  certifi- 

cate of  the  Recorder  of  Mortgages  on  file  ami  of  record  in  my  office. 

In  faith  whereof  1  hereunto  set  my  hand  and  seal  this  day  of  ,  A.  D.  190  . 

(seal.)  ,  Notary  Public. 


OS!) 


INCORPORATION  AND    ORGANIZATION   OF   CORPORATIONS. 


ARTICLES  OF  ASSOCIATION   OF  THE  FINANCE  AND   CONSTRUC- 
TION COMPANY. 

(Maine  Corporation.) 

In  accordance  with  the  Revised  Statutes  of  the  State  of  Maine,  chapter  47, 
sections  6,  7,  8,  and  10,  we,  the  undersigned,  whose  residences  are  set  opposite 
our  respective  names,  hereby  associate  ourselves  together  by  these  written  Articles- 
of  Agreement,  for  the  purpose  of  forming  a  corporation  under  the  laws  of  the  State 
of  Maine,  the  purposes  of  which  said  corporation  are : 

To  carry  on  the  business  in  all  its  various  branches  of  contractors  for  the  con- 
struction of  steam  and  electric  railways,  street  railways,  canals,  and  public  work  of 
every  nature  and  description,  outside  of  the  State  of  Maine,  and  in  other  States, 
countries,  and  jurisdictions,  when  and  where  permissible  under  the  laws  thereof. 

To  construct,  erect,  equip,  repair,  and  improve  houses,  buildings,  wharves, 
sewers,  tunnels,  conduits,  and  subways  ;  to  manufacture,  buy,  sell,  or  otherwise 
acquire,  import,  export,  and  generally  deal  in  sheet  iron,  tin,  galvanized  iron,  cor- 
nices, skylights,  smokestacks,  water,  gas  and  electric  works,  wharves,  roads,  reser- 
voirs, factories,  warehouses,  and  mills;  to  manufacture,  buy,  sell,  import,  export, 
and  generally  deal  in  iron,  steel,  manganese,  copper,  and  other  materials  or  alloy 
thereof,  coke,  gas,  coal,  lumber,  and  building  materials,  or  any  article  consisting  or 
partly  consisting  of  iron,  steel,  copper,  and  other  materials,  and  any  products 
thereof. 

To  carry  on  the  business  of  electrical  engineers  and  dealers  in  electricity  and 
electric  motive  power  for  lighting  and  heating,  outside  of  the  State  of  Maine,  and 
in  other  States,  countries,  and  jurisdictions  when  and  where  permissible  under  the 
laws  thereof. 

Outside  of  the  State  of  Maine,  and  in  other  States,  countries,  and  jurisdictions 
when  and  where  permissible  under  the  laws  thereof,  to  manufacture,  construct,  pur- 
chase, or  otherwise  acquire,  deal  in,  sell,  hire,  lease,  use,  repair,  operate,  and  main- 
tain electric  generating  machinery  and  apparatus,  dynamos,  motors,  meters,  electric 
engines,  accumulators,  and  any  and  all  parts,  devices,  instruments,  and  things 
adapted  to  be  used  in  the  construction  of  or  upon  or  in  connection  with  or  in  the 
operation  of  such  electric  generating  machinery  and  apparatus,  dynamos,  motors, 
meters,  electric  engines  and  accumulators,  and  also  all  apparatus,  machinery,  engines, 
tools,  devices,  and  appliances  for  generating  or  producing,  accumulating,  distributing, 
and  using  electricity  for  any  purpose,  and  also  all  parts,  attachments,  devices,  in- 
struments, articles,  and  things  to  be  used  therewith  or  in  the  construction  and  oper- 
ation thereof. 

To  carry  on  a  general  dredging,  contracting,  and  engineering  business  in  all  of 
their  branches  ;  also  outside  of  the  State  of  Maine  and  in  other  States,  countries,  and 
jurisdictions  when  and  where  permissible  under  the  laws  thereof,  to  design,  con- 
struct, enlarge,  extend,  repair,  complete,  take  down  and  remove  or  otherwise 
engage  in  any  work  upon  bridges,  piers,  docks,  foundations,  mines,  shafts,  tunnels, 
wells,  waterworks,  lighthouses,  buildings,  railroads,  telegraph  and  telephone  lines, 
canals  and  all  kinds  of  excavations,  and  iron,  wood,  masonry,  and  earth  construc- 
tions in  all  parts  of  the  world,  and  to  make,  execute,  and  take  or  receive  any  con- 
tracts or  assignments  of  contracts  therefor  or  relating  thereto  or  connected 
therewith. 

To  engage  in  the  business  of  manufacturing,  buying,  selling,  and  dealing  in 
cranes  for  lifting,  hoisting,  dredging,  and  conveying  materials  of  all  kinds,  and  in 
conveying  machinery,  hoisting  machinery,  and  coal  handling  machinery  of  every 
description,  and  in  steam  hammers,  charging  machines,  drilling,  concentrating,  mill- 
ing, and  mining  machines,  ingot  extractors  and  foundry  plants,  and  in  all  kinds  of 
fittings,  tools,  supplies,  and  apparatus  pertaining  thereto ;  or  for  any  other  purpose 
which  now  is  or  may  be  incidental  or  necessary  for  a  general  contracting  or 
engineering  business. 

To  manufacture  or  purchase  all  tools,  machinery,  and  appliances  convenient 
for  the  carrying  on  the  foregoing  lines  of  business. 

690 


FORMS    AND   PRECEDENTS. 

To  purchase,  lease,  or  otherwise  acquire  timber  lands,  tracts,  and  rights.  To 
buy,  sell,  export,  import,  boom,  saw,  and  prepare  for  market,  and  generally  deal  in 
timber  and  wood  of  all  kinds.  Also  to  manufacture,  buy,  sell,  export,  import,  and 
generally  deal  in  all  kinds  of  goods  and  articles  manufactured  from  wood,  and  gen- 
erally to  carry  on  business  as  saw  mill  proprietors,  timber  and  lumber  dealers. 

To  prospect  for,  locate,  acquire  by  discovery,  lease,  license,  option,  purchase, 
franchise,  grant,  gift,  devise,  or  otherwise  hold,  possess,  enjoy,  develop,  mine, 
work,  and  operate  and  exploit  mines,  mineral  lauds  and  claims,  mining  rights,  metal- 
liferous lands  and  rights  wherever  situate.  Also  to  carry  on  the  business  in  all  its 
various  brauches  of  mining  for  gold,  silver,  tin.  lead,  iron,  and  coal. 

To  enter  into  any  agreements,  arrangements,  or  contracts  with  any  person  or 
persons  for  the  purchase,  either  conditionally  or  absolutely,  of  any  mines,  mining 
claims,  mills,  plants,  machinery,  shares  of  capital  stock,  or  securities  of  any  com- 
pany, and  to  sell,  assign,  and  transfer  and  set  over  the  same  upon  such  terms  and 
for  such  consideration  as  may  be  deemed  advisable.  To  sell  the  undertakings  and 
contracts  of  the  Company  or  any  part  thereof  or  any  of  its  property  or  rights  for 
such  consideration  as  may  be  proper,  and  to  accept  payments  for  any  property  or 
rights  sold  or  otherwise  disposed  of  by  the  Company,  either  in  cash  or  otherwise, 
or  in  any  shares  of  stock  of  any  Company,  or  by  means  of  a  mortgage  or  by  deben- 
ture stock  or  debenture  bonds  of  any  corporation  or  partly  in  one  mode  and  partly 
in  another.  To  establish  or  promote  or  assist  in  establishing  or  promoting  any 
company  and  to  guarantee  or  underwrite  or  cause  to  be  guaranteed  or  underwritten 
subscriptions  for  the  shares  of  securities  of  any  such  company,  or  to  subscribe  for 
the  same  or  any  part  thereof.  To  distribute  among  the  stockholders  of  the  Com- 
pany any  shares  of  stock  or  securities  of  any  corporation  acquired  by  the  Company 
so  long  as  the  capital  stock  of  the  Company  is  not  impaired  thereby.  To  act  as 
the  general  fiscal  agent  or  registrar  of  any  corporation,  association,  or  person.  To 
do  all  and  everything  necessary,  suitable,  or  proper  for  the  accomplishment  of  any 
of  the  purposes  or  the  attainment  of  any  of  the  objects  hereinbefore  enumerated, 
either  alone  or  in  association  with  other  corporations,  firms,  or  individuals,  as  prin- 
cipals, agents,  contractors,  trustees,  or  otherwise,  and  by  or  through  trustees,  agents, 
or  otherwise,  and  in  general  to  engage  in  any  and  all  lawful  business  whatever 
necessary  or  convenient  in  connection  with  the  business  of  the  Company  and  for 
the  purposes  appertaining  thereto. 

The  corporation  shall  have  power  to  own,  hold,  and  manage  property  and  to 
conduct  its  business,  or  any  part  thereof,  in  the  various  States  and  Territories  of  the 
United  States  of  America  and  its  territorial  acquisitions  and  possessions,  the  District 
of  Columbia,  and  in  any  foreign  country  or  countries. 

The  first  meeting  of  said  Associates  shall  be  held  in  accordance  with  the  pro- 
visions of  section  7  of  chapter  47,  at  the  office  of  ,  ,  Maine, 
on  the               day  of  April,  1907- 

Dated  at  Maine,  this  day  of  April,  1907. 


Names.  Residences. 


Maine, 

Maine. 
Maine, 
Maine, 
Maine. 


Waiver  of  Notice  op  First  Meeting  of  Incorporators. 

We,  the  undersigned,  being  all  the  signers  of  the  foregoing  Articles  of  Associ- 
ation, hereby  waive  notice  of  the  time,  place,  and  purpose  ot  the  first  meeting  of 
the  signers  of  said  Articles  of  Association,  as  required  by  section  7  of  chapter  17 
of  the  Revised  Statutes  of  the  State  of  Maine,  and  acts  additional  thereto  and 
amendatory  thereof,  and  do  hereby  lix  the  day  of  April,  A.  D.  1907,  at 

GUI 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

o'clock  in  the  noon,  as  the  time  and  the  office  of  ,  ,  Maine, 

as  the  place  of  said  meeting,  and  we  do  hereby  severally  consent  that  said  first 
meeting  be  held  at  the  time,  place,  and  for  the  purposes  aforesaid,  to  wit : 

1.  To  organize  into  a  corporation. 

2.  To  adopt  a  corporate  name. 

3.  To  define  the  purposes  of  the  corporation. 

4.  To  fix  the  amount  of  capital  stock  and  divide  the  same  into  shares. 

5.  To  elect  a  President,  not  less  than  three  directors,  a  Clerk,  a  Treasurer,  and 
all  other  necessary  officers. 

6.  To  adopt  a  Code  of  By-laws. 

7.  To  act  upon  any  further  business  which  may   properly  come  before  the 
meeting. 

Dated  at  ,  Maine,  this  day  of  April,  A.  D.  1907. 


Fikst  Meeting. 

Pursuant  to  the  foregoing  Articles  of  Association  and  Waiver  of  Notice  of  First 
Meeting  of  Incorporators,  signed  by  all  the  incorporators,  a  meeting  of  said  signers 
of  said  articles  was  held  at  the  office  of  ,  Maine,  on  the 

day  of  April,  1907,  at  o'clock  in  the  noon. 

Of  the  signers  the  following  were  present : 

The  meeting  was  called  to  order  by  Mr.  .  was  chosen  Chairman 

and  presided,  and  was  chosen  Clerk. 

The  Clerk  was  then  duly  sworn  as  appears  by  the  following  certificate  : 

State  of  Maine  ?  gs 

County  of  S 

J  ,  Maine,  April        ,  1907- 

Then    personally  appeared  ,    Clerk   of  the  Meeting  of  Associates, 

mentioned  in  the  foregoing  Articles  of  Agreement,  and  made  oath  that  he  would 
faithfully  and  impartially  perform  the  duties  of  his  office. 

Before  me, 

,  Notary  Public. 

The  original  Articles  of  Association  and  Waiver  of  Notice  of  First  Meeting  of 
Incorporators  were  presented  and  ordered  to  be  made  a  part  of  this  record. 

On  motion,  it  was  Voted,  to  organize  a  corporation  under  sections  6,  7,  8,  and  10 
of  chapter  47  of  the  Revised  Statutes  of  Maine  and  acts  additional  thereto  and 
amendatory  thereof.  _ 

On  motion,  it  was  Voted,  that  the  name  of  said  corporation  shall  be :  The 
Finance  and  Construction  Company. 

On  motion,  it  was  Voted,  that  the  purposes  of  the  corporation  shall  be  as  set 
forth,  stated,  specified,  and  defined  in  the  Articles  of  Association,  which  are  ex- 
pressly referred  to  and  made  a  part  of  this  vote. 

On  motion,  it  was  Voted,  that  the  place  of  business  of  this  corporation  shall  be 
at  ,  Maine,  but  the  corporation  may  maintain  other  general  offices  and 

places  of  business  at  such  other  place  or  places,  either  within  or  without  this  State, 
as  the  Directors  may  from  time  to  time  determine  to  be  for  the  interests  of  the 
corporation. 

On  motion,  it  was  Voted,  that  the  capital  stock  of  this  corporation  shall  be  and 
is  hereby  fixed  at  five  hundred  thousand  dollars  ($500,000)  divided  into  one  hun- 
dred thousand  (100,000)  shares  of  the  par  value  of  five  dollars  ($5.00)  per  share. 

On  motion,  it  was  Voted,  that  the  Chairman  appoint  a  committee  of  one  to 
examine  and  report  at  once  the  names  and  residences  of  persons  who  have  sub- 
scribed for  stock  in  this  Company  and  the  amount  of  stock  subscribed  for  by  each. 
The  Clerk  was  appointed  as  such  committee,  and  made  the  following  report  of  the 
list  of  stockholders,  and  the  report  was  accepted,  and  the  persons  therein  named 
were  declared  to  be  stockholders  in  this  corporation. 

692 


FORMS    AXD    PRECEDENTS. 
Report  of  Committee. 


Names.                                     Residences. 

No. 

of  Shares. 

,  Maine. 

One 

,  .Maine. 

One 

.  Maine. 

One 

,  Maine. 

One 

.  Maine. 

One 

The  following  subscription  for  stock  was  then  filed. 

Subscription'  for  Stock. 

,  Maine,  April        ,  1907. 
We,  the  undersigned,  hereby  severally  agree,  each  with  the  other,  and  with  the 
corporation  hereinafter  named,  in  consideration  of  the  mutual  agreements  herein 
contained,  to  take,  pay  for,  and  receive  the  number  of  shares  set  opposite  our  re- 
spective names  of  the  capital  stock  of  The  Finance  and  Construction  Company. 

Names.  Residences.  No.  of  Shares. 

,  Maine. 
,  Maine. 
,  Maine. 
,  Maine. 
,  Maine. 

On  motion,  it  was  Voted,  to  have  the  following  Code  of  By-laws  : 


BY-LAWS   OF  THE   FINANCE  AND  CONSTRUCTION   COMPANY. 

Article  I.     Title,  Location. 

Sec.  1.  The  title  of  this  corporation  is  The  Finance  and  Construction 
Company. 

Sec.  2.  The  principal  office  in  the  State  of  Maine  shall  be  and  is  registered  with 
,  Maine.  The  corporation  may  also  have  an  office  in  the  City  of 
,  State  of  ,  and  also  have  offices  in  such  other  places  as  the 

Board  of  Directors  may  from  time  to  time  appoint  or  the  business  of  the  corpora- 
tion may  require. 

Article  II.     Seal. 

Sec.  1.  The  corporate  seal  shall  have  inscribed  thereon  the  name  of  the  cor- 
poration, the  year  of  its  organization,  and  the  words  "  Corporate  seal,  Maine." 

Article  III.     Stockholders'  Meetlngs. 

Sec.  1.  All  meetings  of  the  stockholders  must  be  held  within  the  State  of  Maine, 
and  at  the  principal  office  of  the  corporation  in  ,  Maine. 

Sec.  2.  At  the  meeting  of  the  stockholders  shareholders  may  vote  either  in 
person  or  by  proxy  in  writing.  Proxies  to  be  valid  must  be  granted  not  more  I  ban 
thirty  days  before  the  meeting,  which  shall  be,  named  therein,  and  shall  not  be 
valid  after  a  final  adjournment  thereof. 

Sec.  3.  A  majority  in  amount  of  the  stock  outstanding  represented  by  the 
holders  in  person  or  by  proxy  shall  be  requisite  at  every  meeting  to  constitute 
a  quorum. 

Sec.  4.  The  annual  meeting  of  stockholders  after  the  year  190  shall  be  held 
on  the         Wednesday  in  of  each  and  every  year  al  the  principal  office  of 

the  corporation  in  ,  Maine,  at  11  o'clock  in  the  forenoon.     Al    such 

annual  meeting  the  shareholders  shall  elect  by  a  plurality  vote  bv  ballot        Dircc- 

693 


INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS. 

tors,  a  Clerk,  and  a  Treasurer  to  serve  for  one  year,  and  until  their  successors  are 
elected  and  qualified,  each  stockholder  being  entitled  to  one  vote  in  person  or  by 
proxy  for  each  share  of  stock  standing  registered  in  his  or  her  name  on  the  day 
preceding  the  meeting. 

Sec.  5 .  Notice  of  the  annual  meeting  shall  be  mailed  to  each  stockholder  at  his 
or  her  residence,  as  the  same  appears  upon  the  books  of  the  corporation,  at  least 
thirty  days  prior  to  the  meeting. 

Sec.  6.  Special  meetings  of  the  stockholders  shall,  at  the  request  of  three  di- 
rectors, be  called  by  the  President  by  mailing  notice  stating  the  object  and  business 
to  be  transacted  at  said  meeting,  at  least  ten  days  prior  to  the  date  of  the  meeting, 
to  each  stockholder  of  record  at  his  or  her  address  as  the  same  appears  on  the 
records  of  the  corporation. 

Article  IV.    Directors. 

Sec.  1.  The  property  and  business  of  the  corporation  shall  be  managed  by  the 
Board  of  Directors,  in  number,  who  shall-  be  chosen  from  the  stockholders 

annually  and  shall  hold  office  until  others  are  chosen  and  qualified  in  their  stead ; 
every  director  shall  be  a  stockholder,  and  when  a  director  ceases  to  be  a  stock- 
holder the  office  of  director  thereby  becomes  vacant. 

Sec.  2.  At  the  first  meeting  after  the  election  of  directors  when  there  shall  be 
a  quorum,  the  Board  of  Directors  shall  elect  by  ballot  a  President  and  Vice-Presi- 
dent from  their  own  number,  who  shall  hold  office  for  one  year,  and  until  their 
successors  are  chosen  and  qualified. 

The  Board  shall  also  annually  choose  a  Secretary,  who  need  not  be  a  member 
of  the  Board,  to  hold  office  at  the  pleasure  of  the  Board  for  one  year  unless  sooner 
removed  by  the  Board,  which  the  Board  shall  have  power  to  do  at  any  time  with  or 
without  cause. 

Sec.  3.  The  Board  of  Directors  shall  meet  whenever  called  together  by  the 
President  upon  due  notice  given  to  each  director.  On  the  written  request  of  any 
director,  the  Secretary  shall  call  a  special  meeting  of  the  Board.  At  such  meeting 
a  majority  shall  constitute  a  quorum  for  the  transaction  of  business. 

Sec.  4.  A  majority  of  the  directors  in  office  shall  be  present  at  all  meetings  to 
constitute  a  quorum  for  the  transaction  of  any  business,  except  to  adjourn. 

Sec.  5.  The  directors  may  hold  their  meeting  and  have  an  office  or  offices  and 
keep  the  books  of  the  corporation  (except  the  record  and  stock  books)  outside  of 
the  State  of  Maine,  at  the  city  of  ,  or  such  other  place  or  places  as  they 

may  from  time  to  time  determine. 

Sec.  6.  The  Board  of  Directors  shall  have  the  management  of  the  business 
of  the  corporation,  and  may  exercise  all  such  powers  and  do  all  such  things 
as  may  be  exercised  or  done  by  the  corporation,  but  subject  nevertheless  to  the 
provisions  of  the  statutes,  of  the  charter,  and  of  these  by-laws. 

Sec.  7.  The  directors  may  purchase,  lease,  and  acquire  in  any  lawful  manner 
any  and  all  lands,  stock,  buildings,  tools,  machinery,  fixtures,  franchises,  patents, 
contracts,  trade-marks,  copyrights,  and  other  real  and  personal  property  which  in 
their  judgment  is  necessary  or  beneficial  to  the  purpose  of  the  corporation,  and 
may  issue  stock  of  the  corporation  at  par  in  payment  thereof  and  when  they  deem 
it  for  the  interest  of  the  Company,  and  may  sell,  mortgage,  or  otherwise  convey  the 
real  or  personal  estate  of  the  corporation  when  they  deem  it  for  the  interest  of  the 
corporation  to  do  so. 

Sec.  8.  The  directors  shall  not  receive  any  compensation  for  their  services  as 
such,  but  shall  be  allowed  a  reasonable  compensation  for  their  services  when 
actually  engaged  in  the  business  of  the  corporation. 

Sec.  9.  All  powers  not  otherwise  provided  for  by  these  by-laws  and  the  laws  of 
the  State  of  Maine  are  hereby  conferred  upon  the  directors. 

Article  V.     President. 

Sec.  1.  The  President  shall  preside  at  all  meetings  of  the  Board  of  Directors. 
He  shall  sign  all  certificates  of  stock,  and  countersign  all  checks,  bills,  and  notes 

694 


FORMS    AND    PRECEDENTS. 

drawn  by  the  Treasurer.  He  shall  submit  a  complete  report  of  the  operations  aud 
condition  of  the  Company  for  the  year  to  the  stockholders  at  their  regular  meetings 
in  of  each  year,  and  from  time  to  time  shall  report  to  the  directors  all 

matters  within  li is  knowledge  which  the  interests  of  the  Company  may  require  to  be 
brought  to  their  knowledge ;  he  shall  be  ex  officio  member  of  all  standing  com- 
mittees, and  shall  have  the  general  powers  and  duties  of  supervision  and  manage- 
ment usually  vested  in  the  office  of  a  president  of  a  corporation. 

Article  VI.    Vice-President. 

Sec.  1.  The  Vice-President  shall,  in  the  absence  or  incapacity  of  the  President, 
perform  the  duties  of  that  officer  until  the  Board  shall  otherwise  determine. 

Article  VII.     Secretary. 

Sec.  1.  The  Secretary  shall  be  an  ex  officio  Clerk  of  the  Board  of  Directors,  and 
shall  attend  all  sessions  of  the  Board  and  act  as  Clerk  thereof,  and  shall  record  all 
votes  and  the  minutes  of  all  proceedings  in  a  book  to  be  kept  for  that  purpose. 
He  shall  give  proper  notice  of  all  meetings  of  stockholders  of  the  corporation  and 
of  the  Board  of  Directors,  and  shall  perforin  such  other  duties  as  may  be  required 
by  the  President,  and  shall  at  all  times  be  subject  to  the  orders  of  the  Board  of 
Directors. 

Article  VIII.     Treasurer. 

Sec.  1.  The  Treasurer  of  the  Company  shall  have  the  custody  of  all  the  funds 
and  securities  of  the  corporation,  and  deposit  the  same  in  the  name  of  the  corpo- 
ration in  such  bank  or  banks  as  the  directors  may  elect ;  he  shall  sign  all  checks, 
drafts,  notes,  and  orders  for  the  payment  of  money,  which  shall  be  countersigned  by 
the  President,  and  he  shall  pay  out  and  dispose  of  the  same  under  the  direction 
of  the  President.  He  shall  at  all  times  exhibit  his  books  and  accounts  to  any 
officer  or  director  or  stockholder  of  the  Company  upon  application  at  the  office  of 
the  Company  during  business  hours.  He  shall  sign  all  certificates  of  stock  signed 
by  the  President ;  he  shall  give  such  bond  for  the  faithful  performance  of  his  duties 
as  the  Board  of  Directors  may  require. 

Article  IX.     Clerk. 

Sec.  1.  The  Clerk  shall  be  a  resident  of  the  State  of  Maine,  and  shall  keep 
at  the  principal  office  of  the  corporation  at  the  records  of  this  corpo- 

ration, and  a  book  showing  a  true  and  complete  list  of  all  stockholders,  their  resi- 
dence, and  the  amount  of  stock  held  by  them,  which  said  book  shall  be  open  at  all 
reasonable  hours  to  the  inspection  of  persons  interested.  He  shall  act  as  the 
agent  of  this  corporation  in  the  State  of  Maine,  upon  whom  process  against  this 
corporation  may  be  served. 

Article   X.     Executive  and  other  Committees. 

Sec.  1 .  The  Board  of  Directors  may  appoint  three  of  their  own  number  to  act 
as  an  Executive  Committee,  to  serve  during  the  life  of  the  Board  that  appointed  it. 

Sec.  2.  The  Executive  Committee  shall  have  entire  control  and  supervision  of 
all  of  the  property  and  business  affairs  of  the  corporation,  and  shall  have  and  exer- 
cise all  the  powers  and  privileges  which  are  possessed  or  exercised  by  the  Board  of 
Directors. 

Sec.  3.  All  aotion  of  the  Executive  Committee  shall  be  reported  to  the  Board  at 
its  meeting  next  succeeding,  and  such  action  shall  be  subject  to  revision  or  altera- 
tion by  the  Board,  provided  that  no  rights  of  third  parties  shall  be  affected  by  any 
such  revision  or  alteration. 

Sec.  4.  Eroru  time  to  time  the  Board  may  appoint  atiy  other  committee  or  com- 
mittees for  any  purpose  or  purposes,  who  shall  have  and  exercise  such  powers  as 
shall  be  specified  in  the  resolution  of  appointment. 

695 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 


Article  XI.     Vacancies. 

Sec.  1.  If  the  office  of  any  director  or  of  the  President,  Vice-President,  Clerk, 
Secretary,  or  Treasurer,  one  or  more,  becomes  vacant  by  reason  of  death,  resigna- 
tion, disqualification,  or  otherwise,  the  directors  may  choose  by  a  majority  vote  a 
successor  or  successors,  who  shall  hold  office  for  the  unexpired  term. 

Article  XII.     Resignations. 

Sec.  1.  Any  director  or  other  officer  may  resign  his  office  at  any  time,  such 
resignation  to  be  made  in  writing.  The  acceptance  of  a  resignation  shall  not  be 
required  to  make  it  valid. 

Article  XIII.     Duties  of  Officers  may  be  delegated. 

Sec.  1.  In  case  of  the  absence  of  any  officer  of  the  corporation  or  for  any  other 
reason  that  may  seem  sufficient  to  the  Board,  the  Board  of  Directors  may  delegate 
for  the  time  being  the  powei-s  and  duties  of  such  officer  to  any  other  officer  or  to 
any  director,  except  where  otherwise  provided  by  statute. 

Article  XIV.     Capital  Stock. 

Sec.  1.     The  capital  stock  of  this  corporation  shall  be  divided  into 
shares  of  the  par  value  of  dollars  per  share.     All  of  said  shares  shall  be  known 

as  common  stock  and  shall  be  forever  non-assessable. 

Sec.  2.  All  certificates  of  stock  shall  be  numbered  and  registered  in  the  order 
they  are  issued,  and  shall  be  signed  by  the  President  and  by  the  Treasurer,  and  the 
seal  of  the  corporation  shall  be  affixed  thereto.  All  certificates  shall  be  bound  in  a 
book  and  shall  be  issued  in  consecutive  order  therefrom,  and  in  the  margin  thereof 
shall  be  entered  the  name  and  address  of  the  person  owning  the  shares  therein 
represented,  and  the  number  of  shares  and  date  of  issuing  thereof.  All  certificates 
exchanged  or  returned  to  the  corporation  shall  be  marked  cancelled  by  the  Secretary 
and  shall  be  immediately  pasted  in  the  certificate  book  opposite  the  memorandum 
of  its  issue. 

Sec.  3.  Transfers  of  shares  shall  only  be  made  upon  the  books  of  the  corpora- 
tion by  the  holder  in  person  or  by  power  of  attorney  duly  executed  and  acknowl- 
edged and  filed  with  the  Secretary  of  the  corporation,  and  on  the  surrender  of  the 
certificate  or  certificates  of  such  shares. 

Sec.  4.  The  corporation  shall  be  entitled  to  treat  the  holder  of  record  of  any 
share  or  shares  of  stock  as  the  holder  in  fact  thereof,  and  accordingly  shall  not  be 
bound  to  recognize  any  equitable  or  other  claim  to  or  interest  in  such  share  on  the 
part  of  any  other  person  or  persons  whether  or  not  it  shall  have  express  or  other 
notice  thereof,  save  as  expressly  provided  by  the  laws  of  Maine. 

Sec.  5.  Any  person  claiming  a  certificate  of  stock  to  be  lost  or  destroyed  shall 
make  an  affidavit  or  affirmation  of  that  fact  and  advertise  the  same  in  such  manner 
as  the  Board  of  Directors  may  require,  and  shall  give  the  corporation  a  bond  of 
indemnity  in  form  and  with  one  or  more  sureties  satisfactoi-y  to  the  Board  in  at 
least  double  the  par  value  of  the  stock  represented  by  such  certificate,  whereupon  a 
new  certificate  may  be  issued  of  the  same  tenor  and  for  the  same  number  of  shares 
as  the  one  alleged  to  be  lost  or  destroyed,  but  always  subject  to  the  approval  of  the 
Board  of  Directors. 

Article  XV.    Fiscal  Year. 

Sec.  1.     The  fiscal  year  of  the  Company  shall  begin  on  the  first  day  of 
in  each  year,  beginning  in  190     . 

Article  XVI.     Inspection  of  Books. 

Sec.  1.  The  records  of  the  meetings  of  stockholders  and  all  books  relating  to 
the  transfer  of  stock  shall  be  open  to  the  inspection  of  stockholders  during  the 

696 


FORMS    AM)    PRECEDENTS. 

ordinary  and  usual  hours  of  business.  All  other  books  shall  be  under  the  control 
of  the  directors,  who  are  hereby  empowered  to  decide  when  and  under  what  condi- 
tions ami  circumstances  said  books  may  be  examined  by  the  stockholders,  and  all 
the  rights  of  the  stockholders  in  this  regard  are  limited  and  restricted  in  accordance 
with  tins  by-law. 

Article  XVII.     Annual  Statement. 

Sec.  1.  The  Board  of  Directors  shall  present  at  each  annual  meeting,  and  when 
called  for  by  the  stockholders,  at  any  special  meeting,  a  full  and  clear  statement  of 
the  business  and  condition  of  the  corporation. 

Article  XVIII.     Amendments. 

Sec.  I.  The  stockholders,  by  the  affirmative  vote  of  a  majority  of  the  stock 
issued  and  outstanding,  may  at  any  regular  or  upon  notice  at  any  special  meeting 
alter  or  amend  these  by-laws  in  any  manner  not  contrary  to  law. 

On  motion,  it  was  Voted,  to  proceed  to  the  election  of  officers  for  the  ensuing 
year  by  written  ballot,  and  that  the  Clerk  be  a  committee  to  receive,  sort,  and 
count  the  votes  thrown.  Having  attended  to  that  duty,  he  reported  that  for 
directors  ,  had  each  received  votes,  being  all  the  votes  thrown ; 

that   for   Treasurer  had  received  votes,  being  all   the   votes 

thrown ;   that  for  Clerk  had  received  votes,  being  all  the  votes 

thrown ;    that   for  Secretary  had  received  votes,  being  all  the 

votes   thrown. 

The  report  was  accepted  and  the  persons  therein  named  were  declared  to  .be  duly 
elected  to  the  respective  offices. 

The  Clerk  was  then  duly  sworn,  as  appears  by  the  following  certificate : 

State  of  Maine  > 

County  of  Hancock    \    s" 

,  Maine,  April         ,  1907. 
Then  personally  appeared  the  above  named  ,  and  being  duly  sworn 

made  oath  that  he  would  faithfully  and  impartially  perform  the  duties  of  his  said 
office. 

Before  me, 

,  Notary  Public. 
On  motion,  it  was  Voted,  to  prepare  a  Certificate  of  Incorporation  setting  forth 
the  name  and  purposes  of  the  corporation  and  other  particulars  required  by  said 
chapter  47,  and  the  same  was  accordingly  (lone. 

On  motion,  it  was  Voted,  to  adjourn.     Adjourned. 
Attest :  ,  Secretary. 

,  Clerk  of  Meeting  of  Associates. 

Ratification  of  Records. 

We,  the  undersigned,  being  all  the  members  of  said  corporation,  hereby  ac- 
knowledge that  the  above  are  true  records  of  the  organization  of  the  aforesaid 
corporation,  and  all  the  proceedings  of  the  aforesaid  meeting,  and  hereby  consent 
to  approve,  ratify,  and  confirm  all  of  the  aforesaid  proceedings  and  the  above 
records  thereof. 

Dated  ,  Maine,  this  day  of  190  . 

A  true  copy  of  the  records  of  the  proceedings  of  the  first  meeting. 

Attest : 

,  Clerk. 


G07 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 


CERTIFICATE  OF  ORGANIZATION  OF  A  CORPORATION 
UNDER  THE  GENERAL  LAW. 

The  undersigned,  officers  of  a  corporation  organized  at  ,  Maine,  at  a 

•meeting  of  the  signers  of  the  articles  therefor,  duly  called  and  held  at  the  office  of 
,  in  the  City  of  ,  on  the  day  of  ,  A.  D.  190  , 

hereby  certify  as  follows  : 

The  name  of  said  corporation  is  : 

The  purposes  of  said  corporation  are  : 

The  amount  of  capital  stock  is  dollars. 

The  amount  of  capital  stock  already  paid  in  is 

The  par  value  of  the  shares  is  dollars. 

The  names  and  residences  of  the  owners  of  said  shares  are  as  follows  : 

Names.  Residences.  No.  of  Shares. 


Unissued  and  in  the  Treasury. 


Said  corporation  is  located  at 
The  number  of  directors  is 
The  name  of  the  Clerk  is 
The  undersigned 

Treasurer  ;  and  the  undersigned 

of  said  corporation. 

Witness  our  hands  this 


Total. 

in  the  County  of 
,  and  their  names  are  . 

,  and  his  residence  is 
is  President  ;  the  undersigned  is 

are  a  majority  of  the  Directors 


day  of 


,  A.  D.  190 


,  President. 

,  Treasurer. 

,  Directors. 

190  . 


ss. 
Then  personally  appeared 
:  foregoing  certificate  that  the  same  is  true. 

Before  me, 


and  severally  made  oath  to  the 
,  Justice  of  the  Peace. 


State  of  Maine. 

Attorney  General's  Office,  190 

I  hereby  certify  that  T  have  examined  the  foregoing  certificate,  aud  the  same  is 
properly  drawn  and  sigued,  and  is  conformable  to  the  Constitution  aud  laws  of 
the  State. 

,  Attorney  General. 
Company- 


Received 

at  h.  a 

Recorded  in  Vol. 
Attest : 

A  true  copy  of  record. 
Attest : 


Registry  of  Deeds. 
190      . 


Pa°re 


Register. 


Register. 


698 


FORMS   AND    PRECEDENTS. 

MARYLAND. 

CERTIFICATE   OF  INCORPORATION. 

Know  all  Men  by  these  Presents :  That  we,  being  citizens  of  the 

United  States  and  a  majority  of  whom  are  citizens  of  the  State  of  Maryland,  do 
hereby  certify  that  we  do  under  and  by  virtue  of  the  General  Laws  of  this  State, 
authorizing  the  formation  of  corporations,  hereby  form  a  corporation  under  the 
name  of  of  City. 

2.  We  do  further  Certify,  That  the  said  corporation  so  formed  is  a  corporation 
for  ;  that  the  term  of  existence  of  said  corporation  is  limited  to 

years  ;  and  that  the  said  corporation  is  formed  upon  the  articles,  conditions 
and  provisions  herein  expressed,  and  subject  in  all  particulars  to  the  limitations  re- 
lating to  corporations  which  are  contained  in  the  General  Laws  of  this  State. 

3.  We  do  further  Certify,  That  the  operations  of  said  corporation  are  to  be 
carried  on  in  and  that  the  principal  office  of  said  corporation  will  be 
located  in                   City. 

4.  We  do  further  Certify,  That  the  aggregate  of  the  capital  stock  of  the  said 
corporation  is  dollars,  and  that  the  said  capital  is  divided  into 
shares,  of  the  par  value  of  dollars  each. 

5.  We  do  further  Certify,  That  the  said  corporation  will  be  managed  by 
(Board  of  Directors),  and  that  are  the  names  of  the  (Directors)  who 
will  manage  the  concerns  of  the  said  corporation  for  the  first  year. 

hi  Witness  Whereof  We  have  hereunto  set  our  hands  and  seals  this  day 

of  ,  in  the  year  nineteen  hundred  and 

Witness  :  (seal.) 

. (seal.) 

(seal.) 

(seal.) 

(seal.) 


State  of  Maryland : 
Baltimore  City,  to  wit : 

Before  the  subscriber,  a  Notary  Public,  of  the  State  of  Maryland,  in  and  for 
the  City  of  personally  appeared  on  this  day  of  ,  nine- 

teen hundred  and  ,  and  did  severally  acknowledge  the  foregoing  certificate 

to  be  their  act  and  deed. 

Witness  my  hand  and  notarial  seal. 

I,  ,  one  of  the  Judges  of  the  do 

hereby  certify  that  the  foregoing  certificate  has  been  submitted  to  me  for  examina- 
tion ;  and  I  do  further  Certify,  That  the  said  certificate  is  in  conformity  with  the 
provisions  of  the  law  authorizing  the  formation  of  said  corporation. 


MASSACHUSETTS. 

We,  whose  names  are  hereto  subscribed,  do,  by  this  agreement,  associate  our- 
selves with  the  intention  of  forming  a  corporation  according  to  the  provisions  of 
Chapter  437  of  the  Acts  of  the  year  1903,  of  the  Commonwealth  of  Massachusetts, 
and  the  Acts  in  amendment  thereof  and  in  addition  thereto 

The  name  by  which  this  corporation  .shall  be  known  is 

The  location  of  the  principal  office  of  the  corporation  within  the  Commonwealth 
is  the        of        ,  and  outside  the  Commonwealth,  the        of         ,  State  of 

The  purposes  for  which  the  corporation  is  formed  and  the  nature  of  the  busi- 
ness to  be  transacted  by  it  are  as  follows: 

The  total  amount  of  the  capital  stock  to  be  authorized  is  dollars.     Tin- 

par  value  of  its  shares  is,  preferred  dollars,  common  dollars.     The 

number  of  its  shares  is,  preferred  ,  common 

699 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

(State  the  restrictions,  if  any,  imposed  upon  the  transfer  of  stock,  and  if  there 
are  to  be  two  or  more  classes  of  stock,  a  description  of  the  different  classes,  and  a 
statement  of  the  terms  on  which  they  are  to  be  created,  and  the  method  of  voting 
thereon.) 

(  State  any  other  provisions  not  inconsistent  with  law  for  the  conduct  and  regu- 
lation of  the  business  of  the  corporation,  for  its  voluntary  dissolution,  or  for  limit- 
ing, defining,  or  regulating  the  powers  of  the  corporation,  or  of  its  directors  or 
stockholders,  or  any  class  of  stockholders.) 

The  first  meeting  shall  be  called  by  of  (or  if  notice  is  waived); 

and  we  hereby  waive  all  requirements  of  the  statutes  of  Massachusetts  for  notice 
of  the  first  meeting  for  organization,  and  appoint  the  day  of 

at       o'clock  M.,  at  as  the  time  and  place  of  holding  said  meeting. 

The  names  and  residences  of  the  incorporators,  and  the  amount  of  stock 

subscribed  for  by  each,  are  as  follows  : 

Name.  Residence.  Amount  subscribed  for. 


In  witness  whereof,  we  have  hereunto  set  our  hands,  this  day  of 

in  the  year  nineteen  hundred  and 


NOTICE   OF  FIRST  MEETING. 
To 

You  are  hereby  notified,  that  the  first  meeting  of  the  subscribers  to  an  agree- 
ment to  associate  themselves  with  the  intention  of  forming  a  corporation  to  be 
known  by  the  name  of  dated  ,  for  the  purpose  of  organizing  said 

corporation  by  the  adoption  of  by-laws,  and  election  of  officers,  and  the  transaction 
of  such  other  business  as  may  properly  come  before  the  meeting,  will  be  held  on 
,  the  day  of  ,  at  o'clock,  M.,  at 

One  of  the  subscribers  to  said  agreement. 

,  190  . 
,  190. 

State  of  ? 

County  of  £ 

I  certify  that  I  have  served  the  foregoing  notice  upon  each  of  the  subscribers 
by  copy  served  as  follows  (state  whether  delivered  in  hand,  or  deposited  in  the 
post-office,  postpaid,  addressed  to  each  at  his  place  of  business  or  residence,  or  left 
at  his  residence  or  usual  place  of  business)  seven  days  at  least  before  the  day 
fixed  for  the  first  meeting. 


County  of  ,  ss. 

Subscribed  and  sworn  to, 
Before  me, 


190 


Justice  of  the  Peace. 


We,  being  a  majority  of  the  directors  of  the  Company, 

elected  at  its  first  meeting  in  compliance  with  the  requirements  of  Section  11  of 
Chapter  437  of  the  Acts  of  1903,  do  hereby  certify  that  the  following  is  a  true  copy 
of  the  agreement  of  association  to  form  said  corporation,  with  the  names  of  the 
subscribers  thereto : 

We,  whose  names  are  hereto  subscribed,  do,  by  this  agreement,  associate  our- 
selves with  the  intention  of  forming  a  corporation  according  to  the  provisions  of 
Chapter  437  of  the  Acts  of  the  year  1903  of  the  Commonwealth  of  Massachusetts, 
and  the  acts  in  amendment  thereof  and  in  addition  thereto. 

The  name  by  which  the  corporation  shall  be  known  is 

The  location  of  the  principal  office  of  the  corporation  within  the  Commonwealth 

700 


FORMS    AND    PRECEDENTS. 


,  and  outside  the  Commonwealth  the 


of 


is  the  of 

,  State  of  . 

The  purposes  for  which  the  corporation  is  formed  and  the  nature  of  the  business 
to  be  transacted  by  it  are  as  follows : 

The  total  amount  of  its  capital  stock  to  be  authorized  is  dollars.     The 

par  value  of  its  shares  is,  preferred  ,  common  dollars.     The  num- 

ber of  its  shares  is,  preferred  ,  common 

(State  any  other  provisions  set  out  iu  the  original  certificate.) 

The  first  meeting  shall  be  called  by  of  (or  if  notice  is 

waived),  and  we  hereby  waive  all  requirements  of  the  statutes  of  Massachusetts  for 
notice  of  the  first  meeting  for  organization,  and  appoint  the  day  of 

at  o'clock,       M.,  at  as  the  time  and  place  of  holding  said  first 

meeting.  , 

The  names  and  residences  of  the  incorporators  and  the  amount  ot  stock  sub- 
scribed for  by  each  are  as  follows : 

Name.  Residence.  '  Amount  subscribed  for. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  this  day  of  in 

the  year  nineteen  hundred  and 

That  the  first  meeting  of  the  subscribers  to  said  agreement  was  held  on  the 
day  of  in  the  year  nineteen  hundred  and 

That  the  amount  of  the  capital  stock  now  to  be  issued  is  shares  of 

preferred  stock  and  shares  of  common  stock,  to  be  paid  for  as  follows: 

Amount  and  Class  of  Stock  Issued. 


Shares  Preferred.     Shares  Common. 


In  Cash  : 

In  full         

By  instalments 

Amount  of   instalment  to  be  paid  before 
commencing  business 

In  property  : 
Real  Estate : 
Location 

Area 

Personal  Property : 

Machinery 

Merchandise 

Bills  Receivable 

Stocks  and  Securities 

Patent  Rights 

Trade  marks 

Copyrights 

Goodwill ■  .     .     . 

Services 

Expenses 


(Stale  clearly  the  nature  of  such  services  or  expenses  and  the  amount  of  stock 
to  be  issued  therefor.) 

The  name,  residence,  and  post-office  address  of  each  of  the  officers  are  as  follows  : 

Name  of  Office.  Name.  Residence.  P.  0.  Address. 

President, 
Treasurer, 
Clerk  or  Secretary, 
Directors, 

In  Witness  Whereof,  we  have  hereunto  signed  our  names  this  day  of 

in  the  year  nineteen  hundred  and 

701 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

Commonwealth  of  Massachusetts. 

,  190. 

County  of  ,  ss. 

Then  personally  appeared  the  above-named  ,  and  severally   made 

oath  that  the  foregoing  certificate  by  them  subscribed  is  true  to  the  best  of  their 
knowledge  and  belief. 

Before  me, 

,  Notaru  Public- 


AGREEMENT  OF  ASSOCIATION  (MASSACHUSETTS). 
The  Co.,  Inc. 

We,  whose  names  are  hereto  subscribed,  do  by  this  agreement  associate  our- 
selves with  the  intention  of  forming  a  Corporation  according  to  the  provisions  of 
Chapter  437  of  the  Acts  of  the  year  1903,  of  the  Commonwealth  of  Massachusetts, 
and  the  Acts  in  amendment  thereof  and  in  addition  thereto. 

The  name  by  which  this  Corporation  shall  be  known  is 

The  location  of  the  principal  office  of  the  Corporation  within  the  Commonwealth 
is  the  City  of  Boston,  and  outside  the  Commonwealth  the  City  of  ,  State 

The  purpose  for  which  the  Corporation  is  formed  and  the  nature  of  the  business 
to  be  transacted  by  it  are  as  follows.:  to  buy,  sell,  negotiate,  exchange,  pledge,  trade, 
and  deal  in  and  with  any  shares,  stocks,  debentures,  scrip,  bonds,  and  securities  of 
any  government,  State,  or  public  or  private  corporation  or  any  corporate  body  ;  to 
trade  and  deal  in  and  with  mines  and  mining  rights,  metals,  minerals,  and  oil,  cotton, 
grain,  produce,  or  other  commodities ;  to  invest  in  any  or  either  of  the  foregoing, 
and  from  time  to  time  to  change  the  investments  of  the  Company ;  to  mortgage, 
pledge,  or  otherwise  change  all  or  any  of  the  investments  of  the  Company  or  its 
property  and  rights ;  to  make  advances  on,  sell,  or  dispose  of  any  property  or  in- 
vestments ;  or  to  act  as  agent,  factor,  or  broker  for  any  or  either  of  the  corporate 
purposes;  to  purchase  or  otherwise  acquire  the  capital  stock,  shares,  debentures, 
scrip,  bonds,  or  other  evidences  of  indebtedness  of  any  corporation,  and  to  issue 
and  exchange  its  own  stock,  shares,  bonds,  debentures,  scrip,  or  other  evidences  of 
indebtedness  in  payment  therefor,  and  while  the  owner  thereof  to  exercise  all  the 
rights  of  ownership,  including  the  power  to  vote  upon  such  stock  or  shares  ;  to- 
purchase,  receive,  hold,  and  own  mortgages,  debentures,  shares,  and  other  securities 
or  obligations  of  any  public,  private,  or  municipal  corporation,  or  bonds  of  other 
securities  or  obligations  of  the  government  of  the  United  States,  or  of  any  State, 
district,  Territorv,  colony,  or  dependency  of  the  United  States  or  of  any  foreign 
country,  State,  or  colony ;  to  collect  and  receive,  disburse  and  dispose  of  all  interest, 
dividends,  accumulations,  earnings,  and  income  from,  upon,  or  on  account  of  any 
bonds,  debentures,  stocks,  shares,  securities,  contracts,  evidences  of  debt,  obligations, 
or  other  property  held  or  owned  by  the  Corporation  thereto ;  to  do  any  and  all 
lawful  acts  tending  to  increase  or  enhance  the  value  of  the  property  of  the  Company; 
to  issue  stock,  shares,  bonds,  debentures,  certificates,  scrip,  or  other  corporate  obli- 
gations, and  to  secure  the  payment  thereof  by  mortgage,  pledge,  or  deed  of  trust  of 
or  upon  the  whole  or  any  portion  of  the  corporate  property  or  funds ;  to  sell,  pledge^ 
or  otherwise  dispose  of  bonds,  debentures,  or  other  corporate  obligations  for  proper 
and  lawful  corporate  purposes,  as  and  when  the  Board  of  Directors  shall  deem 
necessary,  advisable,  or  expedient ;  to  promote  the  corporate  business  of  investment 
and  dealing  in  securities  in  all  lawful  ways ;  and  to  receive,  collect,  transmit,  pay 
out,  and  disburse  funds  in  the  course  of  its  business,  and  to  the  extent  authorized 
by  law  to  lease,  purchase,  or  otherwise  acquire,  hold,  use,  sell,  trade,  and  deal  iu 
and  with,  assign,  pledge,  mortgage,  transfer,  and  convey  real  and  personal  property 
of  any  name  or  nature,  excepting  bills  of  exchange,  gold  or  silver  bullion  ;  to  issue 
and  accept  drafts  and  bills  of  exchange ;  to  issue  promissory  notes,  scrip,  drafts, 
acceptance,  or  other  corporate  obligations,  and  negotiate  the  same. 
702 


FORMS    AXD    PRECEDENTS. 

Generally  to  purchase,  take  on  lease  or  in  exchange,  hire  or  otherwise  acquire 
any  personal  property,  and  any  tights  or  privileges  which  the  Company  may  deem 
useful,  necessary,  desirable,  proper,  or  convenient  for  the  purposes  of  its  business, 
or  in  the  development  or  extension  thereof. 

To  apply  for,  acquire,  buy,  sell,  assign,  lease,  pledge,  mortgage,  or  otherwise 
dispose  of  letters  patent  of  the  United  States  or  of  any  foreign  country,  and  all  or 
any  rights,  territorial  or  otherwise,  thereunder.  To  apply  for,  acquire,  hold,  sell, 
assign,  lease,  mortgage,  or  otherwise  dispose  of  patent  rights,  licenses,  privileges, 
inventions,  trade  names,  trade  marks,  and  pending  applications  therefor,  relating  to 
or  useful  in  connection  with  any  business  of  the  Corporation.  To  use,  manufacture, 
or  grant  licenses  under  auy  letters  patent  owned  or  controlled  by  the  Company,  and 
to  expend  mouey  in  experimenting  upon  and  testing  the  validity  or  value  of  any 
patent  rights  the  Company  may  acquire  or  proposes  to  acquire. 

To  enter  into  any  agreements,  arrangements,  or  contracts  with  any  person  or 
persons  for  the  purchase,  either  conditionally  or  absolutely,  of  any  property,  shares 
of  capital  stock,  or  securities  of  any  company,  and  to  sell,  assign,  transfer,  and  set 
over  the  same  upon  such  terms  and  for  such  consideration  as  may  be  deemed  advis- 
able. To  sell  the  undertakings  and  contracts  of  the  Company,  or  any  part  thereof, 
or  any  of  its  property  or  rights  for  such  consideration  as  may  be  proper,  and  to 
accept  payment  for  any  property  or  rights  sold  or  otherwise  disposed  of  by  the 
Company,  either  in  cash  or  otherwise,  or  in  any  shares  of  stock  of  any  company, 
or  by  means  of  a  mortgage  or  by  debenture  stock  or  debenture  bonds  of  any 
corporation  or  partly  in  one  mode  and  partly  in  another.  To  establish  or  promote 
or  assist  in  establishing  or  promoting  any  company,  and  to  guarantee  or  underwrite 
or  cause  to  be  guaranteed  or  underwritten  subscriptions  for  the  shares  or  securities 
of  any  such  company,  or  to  subscribe  for  the  same  or  any  part  thereof.  To  act  as 
the  general  fiscal  agent  or  registrar  of  any  corporation,  association,  or  person. 

To  do  all  and  everything  necessary,  suitable,  or  proper  for  the  accomplishment  of 
any  of  the  purposes  or  the  attainment  of  any  of  the  objects  hereinbefore  enumerated, 
either  alone  or  in  association  with  other  corporations,  firms,  or  individuals,  as  prin- 
cipals, agents,  contractors,  trustees,  or  otherwise,  and  by  or  through  trustees,  agents, 
or  otherwise,  and  in  general  to  engage  in  any  and  all  lawful  business  whatever 
necessary  or  convenient  in  connection  with  the  business  of  the  Company  and  for 
the  purposes  appertaining  thereto. 

The  Corporation  shall  have  power  to  own,  hold,  and  manage  property  and  con- 
duct its  business,  or  any  part  thereof,  in  the  various  States  and  Territories  of  the 
United  States  of  America  and  its  territorial  acquisitions  and  possessions,  the 
District  of  Columbia,  and  in  any  foreign  country  or  countries.  The  Corporation 
may  have  one  or  more  offices  without  the  State  of  Massachusetts,  at  such  place  or 
places  as  the  Board  of  Directors  may  establish. 

The  total  amount  of  the  capital  stock  to  be  authorized  is  one  hundred  thousand 
dollars  (§100,000).     The  par  value  of  its  shares  is  ten  dollars  ($10.00)  each. 

The  Board  of  Directors  shall  have  power  to  hold  its  meetings  and  to  have  one 
or  more  offices  outside  of  the  State  of  Massachusetts,  at  such  place  or  places  as 
may  from  time  to  time  be  designated  by  them. 

We  hereby  waive  all  requirements  of  the  statutes  of  Massachusetts  for  notice  of 
the  first  meeting  for  organization,  and  appoint  the  day  of  .  1907, 

at  o'clock  \i.,  a1  ,  as  the  time  and  place  of  holding  said  meeting. 

The  names  and  residences  of  the  incorporators,  and  the  amount  of  common 
stock  subscribed  for  by  each,  are  as  follows  : 

Name.  Residence.  Amount  subscribed  for. 

In  Witness  Whereof,  we  have  hereunto  set   our  hands    this  day   of 

,  in  the  year  nineteen  hundred  and  seven. 


We,  ,  ,  and  ,  being  the   directors   of  the 

Company,  Inc.,  elected  at  the  first  meeting,  in  compliance  with  the  requirements  of 

703 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

Section  11  of  Chapter  437  of  the  Acts  of  1903,  do  hereby  certify  that  the  following 
is  a  true  copy  of  the  agreement  of  association  to  form  said  Corporation,  with  the 
names  of  the  subscribers  thereto  :  (here  insert  copy  of  the  foregoing  Agreement 
of  Association). 

That  the  first  meeting  of  the  subscribers  to  said  agreement  was  held  on  the 
day  of  ,  in  the  year  nineteen  hundred  and  seven. 

That  the  amount  of  capital  stock  now  to  be  issued  is  one  hundred  thousand 
dollars  ($100,000),  divided  into  ten  thousand  (10,000)  shares  of  common  stock  of 
the  par  value  of  ten  dollars  ($10.00)  per  share,  to  be  paid  for  by  a  contract,  valued 
at  $100,000,  reading  as  follows,  to  wit  :  (here  is  inserted  copy  of  Contract). 

The  names,  residences,  and  post-office  address  of  each  of  the  officers  is  as 
follows  : 

Name  of 
Office  Name.  Residence.  P.  O.  Address. 

President. 

Treasurer, 

Clerk, 

Secretary, 

Directors, 

In  Witness  Whereof,  we  have  hereunto  signed  our  names  this  day  of 

,  in  the  year  nineteen  hundred  and  seven. 


Commonwealth  op  Massachusetts. 

Suffolk,  ss. 

Then  personally  appeared  the  above  named  ,  ,  and  _  , 

and  severally  made  oath  that  the  foregoing  certificate  by  them  subscribed  is  true  to 
the  best  of  their  knowledge  and  belief. 

Before  me, 

,  Justice  of  the  Peace. 


MICHIGAN. 

ARTICLES  OF  ASSOCIATION 

or 


We,  the  undersigned,  desiring  to  become  incorporated  under  the  provisions  of 
Act  232  of  the  Public  Acts  of  1903,  entitled  "  An  Act  to  revise  and  consolidate  the 
laws  providing  for  the  incorporation  of  manufacturing  and  mercantile  companies  or 
any  union  of  the  two,  and  for  the  incorporation  of  companies  carrying  on  any  other 
lawful  business  except  such  as  are  precluded  from  organization  under  this  act  by  its 
express  provisions,  and  to  prescribe  the  powers  and  to  fix  the  duties  and  liabilities 
of  such  corporations,"  and  the  acts  amendatory  thereof  and  supplementary  thereto, 
do  hereby  make,  execute,  and  adopt  the  following  articles  of  association,  to  wit : 

Article  I. 
The  name  assumed  by  this  association,  and  by  which  it  shall  be  known  in  law, 
is 

704 


FORMS    AND    PRECEDENTS. 

Article  II. 
The  purpose  or  purposes  of  this  corporation  are  as  follows  : 

Article  III. 

The  principal  place  at  which  operations  are  to  be  conducted  is  at 

,  in  the  County  of  ,  State  of 

Article  IV. 

The  capital  stock  of  the  corporation  hereby  organized  is  the  sum  of 
dollars,  of  which  dollars  shall  be  common  stock,  and  dollars 

shall  be  preferred  stock.  The  preferred  stock  shall  be  subject  to  redemption  at  par 
on  the  ^        day  of  ,  A.  D.  190  ,  and  the  holder  shall  be  entitled  to 

a  dividend  of  per  cent  per  annum,  payable  ,  which  shall  be 

cumulative  and  payable  before  any  dividend  shall  be  set  apart  or  paid  on  the  com- 
mon stock.     The  preferred  stockholders  shall  be  entitled  to  vote  for  directors. 

Article  V. 

The  number  of  shares  into  which  the  capital  stock  is  divided  is  of  the 

par  value  of  dollars  each. 

Article  VI. 

The  amount  of  common  stock  subscribed  is  dollars.     The  amount  of 

preferred  stock  subscribed  is  dollars. 

Article  VII. 

The  amount  of  common  stock  actually  paid  in  is  the  sum  of  dollars, 

of  which  dollars  has  been  paid  in  cash,  and  dollars  has  been 

paid  in  other  property,  an  itemized  description  of  which,  with  the  value  at  which 
each  item  is  taken,  is  as  follows,  viz.: 

The  amount  of  preferred  stock  actually  paid  in  is  the  sum  of  dollars,  of 

which  dollars  has  been  paid  in  cash,  and  dollars  has  been  paid 

in  other  property,  an  itemized  description  of  which,  with  the  valuation  at  which 
■each  item  is  taken,  is  as  follows,  viz. : 

Article  VIII. 

The  office  in  the  State  of  Michigan  for  the  transaction  of  business  shall  be  kept 
at 

Article  IX. 

The  term  of  existence  of  this  corporation  is  fixed  at  years  from  the  date 

hereof. 

Article  X. 

The  names  of  the  stockholders,  their  respective  residences,  and  the  number  of 
shares  of  stock  subscribed  for  by  each  are  as  follows : 

X  unes.  Residence.  No.  of  Shares. 

In  Witness  Whereof,  we,  the  parlies  hereby  associating,  lor  the  purpose  of  giving 
legal  effect  to  these  articles,  hereunto  sign  our  names,  this  day  of 

A.  D.  190   . 

Names.  Names. 

705 


INCORPORATION  AND  ORGANIZATION   OF  CORPORATIONS. 

State  of  Michigan,    \  gs 
County  of  y 

On  the  day  of  ,  190   ,  before  me,  personally  appeared  (names 

of  incorporators)  to  me  known  to  be  the  persons  described  in  and  who  executed  the 
foregoing  instrument,  acknowledged  they  executed  the  same  as  their  free  act  and 
deed.  ,  Notary  Public, 

County,  Michigan. 

MINNESOTA. 

CERTIFICATE  OF   INCORPORATION  OF  THE  COMPANY. 

We,  the  undersigned,  for  the  purpose  of  forming  a  corporation  under  and  pursu- 
ant to  the  provisions  of  Chapter  fifty-eight  (58),  Revised  Laws  of  Minnesota  for 
1905,  and  any  amendments  thereof,  do  hereby  associate  ourselves  as  a  body  corpo- 
rate, and  do  hereby  adopt  the  following  Certificate  of  Incorporation  : 

Article  I. 

The  name  of  the  corporation  shall  be  .     The  general  nature  of  its 

business  shall  be  •     The  principal  place  of  transacting  the  business  of 

this  corporation  shall  be  the  city  of  ,  county  of  ,  Minnesota. 

Article  II. 

The  time  for  the  commencement  of  this  corporation  shall  be  ,  190     , 

and  the  period  of  its  duration  shall  be  thirty  years. 

Article  III. 

The  names  and  places  of  residence  of  the  persons  forming  this  corporation  are 
of  ,  of  ,  and  of 

Article  IF. 

The  management  of  this  corporation  shall  be  vested  in  a  Board  of  Directors, 
composed   of   not   less    than  and    not   more    than  members. 

The  names  and  addresses  of  the  first  Board  of  Directors  are  ,  and 

.     The  first  officers  of  this  corporation  shall  be,  President,  ,  Vice- 

President,  ,  Secretary,  ,    and  Treasurer,  _       .     All 

of  the  above  named  officers  and  directors  shall  hold  their  respective  offices 
aforesaid  until  the  next  annual  meeting  of  the  corporation,  to  be  held  , 

190  ,  at  which  time  and  annually  thereafter  a  Board  of  Directors  shall  be  elected 
from  and  by  the  stockholders  of  this  corporation.  The  annual  meeting  of  the  cor- 
poration shall  be  held  at  its  principal  place  of  business  on  the  Tuesday  in 
in  each  year.  Immediately  after  the  election  of  directors,  or  as  soon 
thereafter  as  practicable,  the  directors  shall  meet  and  elect  from  their  number  a 
president  and  a  vice-president,  and  from  their  number  or  from  the  stockholders  a 
secretary  and  a  treasurer.  Any  office  except  that  of  president  and  vice-president 
may  be  held  by  one  person.  The  directors  and  officers  of  this  corporation  shall 
hold  their  respective  offices  until  their  successors  have  been  duly  elected  and 
entered  upon  the  discharge  of  their  duties.  The  first  meetings  of  the  stockholders 
and  of  the  Board  of  Directors  shall  be  held  at  on  the  day  of 
,  190    ,  at  10  o'clock  respectively. 

Article  V. 

The  amount  of  the  capital  stock  of  this  corporation  shall  be  dollars, 

which  shall  be  paid  in,  in  money  or  property,  or  both,  in  such  a  manner,  at  such 
times,  and  in  such  amounts  as  the  Board  of  Directors  shall  order.  The  capital 
stock  shall  be  divided  into  shares  of  the  par  value  of  $  each. 

706 


FORMS   AND    PRECEDENTS. 


Article  J' I. 


The  highest  amount  of  indebtedness  or  liability  to  which  this  corporation  shall 
at  any  time  be  subject  shall  be  the  sum  of  8 

In  Testimony  Whereof,  we  have  hereunto  set  our  hands,  this  day  of 

190     .  J 

In  presence  of  . 


State  of  Minnesota,  ) 
County  of  J 

On  this  day  of  ,  190     ,  personally  appeared  before  me  , 

to  me  known  to  be  persons  named  in  and  who  executed  the  foregoing  Certificate  of 
Incorporation,  and  each  acknowledged  that  he  executed  the  same  as  his  free  act  and 
deed,  for  the  uses  and  purposes  therein  expressed. 


,  Notary  Public,  County,  Minn. 

My  commission  expires 


MISSISSIPPI. 
THE   CHARTER   OF  INCORPORATION 

OF 


Section  One.   Be  it  known,  That  and  their  associates,  successors, 

and  assigns,  are  hereby  created  and  constituted  a  body  corporate,  and  as  such  shall 
have  succession  for  a  period  of  fifty  years. 

Section  Two.   The  domicile  of  said  corporation  shall  be  at 
Mississippi,  but  may  be  changed  to  any  other  point  within  Mississippi  by  a  vote  of 
the  holders  of  a  majority  of  the  stock  of  said  corporation. 

Section  Three.  Said  corporation  is  empowered  and  authorized  to  have  and  to 
hold,  receive,  purchase,  and  enjoy  real  estate  and  personal  property,  and  the  same, 
or  any  part  thereof,  to  sell,  rent,  lease,  convey,  mortgage,  or  otherwise  encumber; 
to  issue  notes,  bonds,  debentures  or  other  evidences  of  debts ;  to  sue  and  be  sued, 
contract  and  be  contracted  with ;  to  plead  and  be  impleaded  in  the  courts  of  the 
country  ;  to  use  a  common  seal,  and  the  same  to  change,  alter,  or  renew  at  pleasure. 
And  said  corporation  is  further  authorized  and  empowered  to  do  all  other  acts 
necessary  to  promote  its  welfare  which  are  not  in  conflict  with  the  laws  of  the  State 
of  Mississippi  or  of  the  United  States  of  America.  And  said  corporation  shall  have 
and  enjoy  all  the  powers,  privileges,  and  rights  conferred  upon  corporations  by 
Chapter  25   of  the  Annotated   Code  of  1892. 

Section  Four.  The  purposes  for  which  the  corporation  is  created  are,  and  it  is 
hereby  authorized  and  empowered  to  ,  and  said  corporation  is  further 

authorized  to  do  all  acts  necessary  and  convenient  in  the  judgment  of  the.  officers  or 
directors  of  said  corporation,  for  the  welfare  and  business  of  said  corporation;  and 
.said  corporation  shall  have,  possess,  and  enjoy  all  the  rights,  powers,  and  privileges 
enumerated  in  or  created  or  conferred  by  Chapter-  25  of  the  Annotated  Code  oi 
1892,  which  are  necessary  and  proper  for  carrying  out  the  purposes  of  this 
charter. 

Section  Fine.   The  capital  stock  of  said  corporation  shall  be 
divided  into  shares  of  each,  but  said  capital  stock  may  be  increased  or 

diminished  at  any  time  by  a  vote  of  the  holders  of  a  majority  of  the  capital  stock  of 
said  corporation. 

Section  Six.  The  management  of  the  business  of  said  corporation  shall  be  con- 
fined to  such  a  number  of  directors  as  may  be  fixed,  and  altered  from  time  to  lime, 
by  a  vote  of  a  majority  of  the  stock  issued  h\  said  corporation;  said  directors  shall 
be  stockholders  of  said  corporation  ;  the  majority  of  said  directors  shall  constitute 

707 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

a  quorum  for  the  transaction  of  business.  The  said  directors  shall  elect  from  their 
number  a  President,  and  also  elect  a  Vice-President,  a  Secretary,  and  a  Treasurer, 
and  may  appoiut  or  elect  such  other  officers,  agents,  or  employees  as  they  may  deem 
proper;  shall  hold  office  until  their  successors  are  duly  elected  and  shall  have 
qualified,  and  shall  have  power  to  fill  all  vacancies  in  their  number  caused  by  death, 
resignation,  or  otherwise. 

Section  Seven.  The  directors  of  said  corporation  shall  have  power  and  authority 
to  make  any  and  all  needful  rules,  by-laws,  and  regulations  for  the  control  and  man- 
agement of  the  business  affairs  and  property  of  said  corporation,  and  may  from 
time  to  time  alter  or  renew  the  same  as  they  may  see  fit. 

Section  Eight.  At  all  stockholders'  meetings  a  vote  of  the  holders  of  a  majority 
of  the  stock  then  present  in  person  or  by  proxy  shall  decide  all  questions  legally 
submitted  at  such  meeting.  Each  stockholder  shall  be  entitled  to  one  vote  for  each 
share  of  stock  held  by  him,  it,  or  her,  but  all  elections  of  directors  or  managers  of 
said  corporation  shall  be  held  in  accordance  with  Section  194  of  the  Constitution 
of  Mississippi  and  Section  837  of  the  Annotated  Code  of  Mississippi. 

Section  Nine.  No  stockholder  of  any  such  corporation  shall  be  in  any  way 
personally  liable  for  the  debts  of  said  corporation  beyond  the  amount  of  his,  her,  or 
its  unpaid  subscription  to  said  stock. 

Section  Ten.  All  subscriptions  to  said  capital  stock  shall  be  paid  for  in  cash  or 
property. 

Section  Eleven.  Any  two  of  said  incorporators  may  open  books  of  subscription 
to  the  capital  stock  of  said  corporation,  and  as  soon  as  shall  have  been 

subscribed,  said  corporation  may  organize,  elect  directors,  and  commence  business. 

Witness  our  hands  and  seals  this         day  of 
State  of  > 

County  of  )  ss* 

Personally  appeared  before  me  the  within  named 

,  who  acknowledged  that  they  signed  and  delivered  the 
foregoing  instrument  on  the  day  and  year  therein  mentioned. 

Given  under  my  hand  and  official  seal  this  the  day  of  ,  190  , 

FORM  FOR  REPORT  OF  ORGANIZATION  IN  MISSISSIPPI. 

The  Company,  incorporated  the  day  of  ,  190  ,  was  organized 

on  the  day  of  in  the  County  of  ,  by  the  election  of  as 

directors  (or  trustees),  who  elected  the  following  officers  to  serve  for  year     . 

The  post-office  address  of  the  President  is  ;  of  the  Secretary  is 

I,  ,  elected  President  of  the  Company  on  the 

day  of  ,  190     ,  certify  that  the  foregoing  report  of  the  organization  of 

said  corporation  is  correct  and  true. 

,  President. 

Attest :  ,  Secretary. 

MISSOURI. 

FORM    FOR    INCORPORATING    MANUFACTURING   AND    BUSINESS 

CORPORATIONS. 

Know  all  Men  by  these  Presents  :  That  we,  the  undersigned,  desirous  of  forming 
a  corporation  under  the  laws  of  Missouri,  and  more  particularly  under  the  provis- 
ions of  Article  IX.  Chapter  12,  R.  S.  1899,  governing  the  formation  of  manufactur- 
ing and  business  companies,  do  hereby  enter  into  the  following  agreement : 

First.  That  the  name  of  the  corporation  shall  be  (name  designating  the  busi- 
ness contemplated;  but  not  the  name  of  any  corporation  existing  under  the  laws 
of  this  State  for  simdar  purposes.  When  the  name  of  a  person  or  firm  is  assumed, 
it  must  be  joined  with  some  word  designating  the  business  to  be  carried  on,  fol- 
lowed by  the  word  "  company"  or  "corporation  "). 

708 


FORMS   AND    PRECEDENTS. 

Second.    That  the  corporation  shall  be  located  in  the  of  the 

County,  Missouri. 

Third.    That  the  amonnt  of  the  capital  stock  of  this  Company  shall  be 
thousand  dollars,  of  which  dollars  shall  be  preferred  stock,  —  which  shall 

be  entitled  to  a  preferential  dividend  of  (not  exceeding  S  per  cent)  per 

annum,  —  divided  into  shares  of  the  par  value  of  dollars  each  ; 

that  the  same  has  bee:i  bona  fide  subscribed  and  (at  least  one-halt)  thereof 

actually  paid  up  in  lawful  money  of  the  United  States,  which  is  in  the  custody  of 
the  persons  hereinafter  named  as  the  first  Board  of  Directors. 

Fourth.  That  the  names,  places  of  residence  of  the  several  shareholders,  and 
the  number  of  shares  of  stock,  both  common  and  preferred,  subscribed  for  by  each, 
are  as  follows  : 

Common  Stock. 

Name.  Residence.  Number  of  Shares. 


Preferred  Stock. 
Name.  Residence.  Number  of  Shares. 


Fifth.    The  Board  of  Directors  shall  consist  of  (not  less  than  three  nor 

more  than  thirteen ;  at  least  three  of  whom  shall  be  citizens  and  residents  of 
Missouri)  shareholders,  and  the  names  of  those  agreed  on  for  the  first  year  are : 

Sixth.    That  the  corporation  shall  continue  for  a  term  of  (not  exceed- 

ing fifty)  years. 

v     nth.   That  the  corporation  is  formed  for  the  following  purposes  : 

In  Testimony  Whereof,  we  have  hereunto  set  our  hands  this  day  of 

190     . 

(Signatures.) 
State  of  Missouri,  ) 
County  of  > 

On  this  day  of  ,       190  ,  before  me  personally  appeared 

(names  of  all  the  stockholders),  to  me  known  to  be  the  persons  de- 
scribed in  and  who  executed  the  foregoing  instrument  and  acknowledged  that  they 
executed  the  same  as  their  free  act  and  deed. 

In  Testimony   Whereof  I  have  hereunto  set  my  hand  and  affixed  my  notarial 
seal  the  day  and  year  last  above  mentioned. 

,  Notary  Public. 
My  commission  expires  ,  190     . 

(seal.) 

MONTANA. 

State  of  Montana,    ) 
County  of  \ 

We,  ,  do  by  these  presents,  pursuant  to  and  in  conformity  with 

Article  I.  of  Chapter  I.,  Title  L,and  Part  IV.  of  the  Civil  Code  oi  the  Slate  of  Mon- 
tana, associate  ourselves  together,  and  do  hereby  adopt,  the  following  Articles  or 
Incorporation  : 

1.    The  corporate  name  of  said  company  is  hereby  declared  to  be: 
2-    The  objects  for  which  the  company  is  formed  are  as  follows: 

3.  The  names  of  the  city,  town,  or  locality,  and  county  in  which  the  operations  of 
the  said  company  are  to  he  carried  on  arc  : 

4.  The  said  company  shall  commence  on  the  day  of  in  the 

701) 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

year  one  thousand  nine  hundred  and  ,  and  shall  continue  in  existence  for 

the  term  of  years. 

5.  The  number  of  trustees  who  shall  manage  the  concerns  of  said  company  for  the 
first  three  months,  shall  be  ,  aud  their  names  and  addresses  are 

6.  The  capital  stock  of  the  said  company  shall  be  dollars,  which  shall 
be  divided  iuto                shares  of                dollars  each. 

7.  Amount  actually  subscribed  is  dollars,  subscribed  by  (here  insert 
names  aud  addresses  of  subscribers). 

8.  The  stock  is  assessable. 

Witness  Our  hands  and  seals,  this  day  of  ,  190    . 


a 


State  of  Montana,   } 
County  of  J 

On  this  day  ,  A.  D.  190     ,  before  me 

in  and  for  said  county  and  State,  personally  appeared  ,  whose  names 

are  subscribed  to  the  foregoing  instrument  as  the  parties  thereto,  known  to  me  to  be 
the  same  persons  described  in,  and  who  executed  the  said  foregoing  instrument,  and 
who  each  of  them  duly  acknowledged  to  me  that  they  each  of  them  respectively 
executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal 
the  day  and  year  in  this  certificate  first  above  written. 


NEBRASKA. 
ARTICLES  OF  INCORPORATION 

OF   THE 

Company. 

We,  the  undersigned,  incorporators,  do  hereby,  in  pursuance  of  the  Statutes  of 
the  State  of  Nebraska  in  such  cases  made  and  provided,  associate  ourselves  as  a  body 
politic  and  corporate  in  the  manner  and  for  the  purposes  hereinafter  mentioned. 

Art.  I. 

The  said  corporation  shall  be  named  and  known  as  Company. 

Art.   II. 

The  principal  place  of  transacting  the  business  of  the  corporation  shall  be  in  the 
City  of  ,  County,  Nebraska. 

Art.    Ill 

The  general  nature  of  the  business  to  be  transacted  by  the  corporation  is: 

Art.  IF. 

The  authorized  capital  stock  of  the  corporation  shall  be  dollars,  divided 

into  shares   of  dollars  each;   which   shall  be  fully  paid  up 

when  issued,  of  such  shares  shall  be  subscribed  for  and  fully  paid  up 

upon  the  organization  of  the  corporation,  the  remaining  shares,  or  any  part 

thereof,  may  be  issued  at  any  time  by  the  Board  of  Directors.  The  stockholders  of 
the  company  shall  be  entitled  to  a  pro  rata  distribution  of  all  subsequent  issues  of 
stock,  in  such  manner  and  under  such  rules  and  regulations  as  may  be  prescribed 
by  the  Board  of  Directors.  Said  stock  may  be  paid  for  in  cash,  or  its  equivalent 
in  property  necessary  and  useful  to  the  corporation  in  the  transaction  of  its  business. 

Art.  V. 

The  highest  amount  of  indebtedness  or  liability  to  which  the  corporation  may  at 
any  time  subject  itself  shall  not  exceed  an  amount  equal  to  per  cent  of 

the  capital  stock  issued. 

710 


FORMS    AXD    PRECEDENTS. 


Art.   VI. 


The  corporation  shall  date  from  and  commence  on  the  day  of  , 

190  ,  and  it  shall  terminate  on  the  day  of  ,  190  . 

Art.  VII. 

The  affairs  and  business  of  the  corporation  shall  be  conducted  by  a  Board  of 
Directors,  and  by  the  officers  by  them  to  be  elected,  as  hereinafter 
provided. 

Art.   Fill 

The  first  meeting  of  the  stockholders  shall  be  held  on  the  date  of  the  commence- 
ment of  the  corporation,  or  as  soon  thereafter  as  practicable,  and  thereafter  their 
regular  annual  meeting  shall  be  held  in  the  City  of  on  the 

day  of  .     At  said  first  meeting,  and  at  the  annual  meetings  thereafter, 

the  Board  of  Directors  shall  be  elected  by  the  stockholders  from  their  own  number, 
to  hold  office  until  the  annual  meeting  next  after  their  election  and  until  their  suc- 
cessors are  elected  and  qualified. 

Art.  IX. 

The  Directors  shall  in  each  instance,  as  soon  as  convenient  after  their  election, 
elect  from  their  own  number  a  President,  Vice-President,  Secretary,  and  Treasurer, 
who  shall  hold  office  until  the  annual  meeting  next  after  their  election  and  until 
their  successors  are  elected  and  qualified.  Any  two  of  said  offices  may  be  held  by 
one  and  the  same  person,  except  the  offices  of  President  and  Vice-President. 

Art.  X. 

The  Board  of  Directors  shall  have  full  power  and  authority  to  make  all  rules 
and  by-laws  for  the  proper  government  and  control  of  all  the  business  affairs  of  the 
corporation,  and  they  may  alter  and  amend  the  same  at  pleasure. 

Art.  XI 

Vacancies  occurring  in  the  Board  of  Directors  shall  be  filled  by  the  stockhold- 
ers, and  other  offices  vacant  from  whatever  cause  shall  be  filled  by  the  Board  of 
Directors. 

Art.  XII. 

These  articles  of  incorporation  may  be  amended  at  any  time.  Every  amend- 
ment shall  be  first  approved  by  a  two-thirds  vote  of  the  entire  Board  of  Directors, 
and  upon  being  so  approved,  it  shall  be  entered  at  large  upon  the  records  of  the 
Board.  A  draft  of  the  proposed  amendment  or  amendments,  as  the  case  may  be, 
shall  then  be  submitted  to  each  stockholder,  with  the  notice  of  the  meeting  called 
for  the  purpose  of  voting  upon  the  same,  which  notice  shall  be  given  ten  days  at 
least  prior  to  the  date  fixed  for  the  meeting.  If  such  amendment  or  amendments, 
or  either  of  them,  shall  then  be  approved  by  the  holder  or  holders  of  two-thirds  of 
the  capital  stock  of  the  corporation,  each  and  every  amendment  so  approved  shall 
be  considered  adopted  and  be  made  a  part  of  the  Articles  of  Incorporation,  and 
the  Board  of  Directors  shall  thereafter  subscribe,  acknowledge,  record,  and  publish 
the  same,  as  by  law  required. 

In  Testimony  Whereof,  we  have  hereunto  set  our  hands  this  day  of 

In  presence  of : 

State  of  Nebraska, 
County  of 

On  this  day  of  personally  before  me  (name  of  officer  and  title 

of  office   held)   in  and  for  County,  Nebraska,  duly  commissioned   and 

qualified  came  ,  to  me  well  known  to  be  the  identical  persons  whose 

names  are  affixed  to  the  foregoing  articles  of  incorporation,  and  they  severally  ac- 
knowledged the  execution  of  the  same  to  be  their  voluntary  act  and  deed  for  the 

711 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

purposes  in  said  articles  expressed.  la  testimony  whereof  I  have  hereunto  sub- 
scribed my  hand  and  affixed  my  official  seal  the  day  and  date  last  above  written. 

Notary  Public, 

County,  Nebraska. 
NEVADA. 

ARTICLES  OF  INCORPORATION  OF 

. Company. 

Know  all  Men  by  these  Presents:  That  we,  the  undersigned,  have  this  day 
voluntarily  associated  ourselves  together  for  the  purpose  of  forming  a  corpora- 
tion under  the  laws  of  the  State  of  Nevada ;  and  we  hereby  certify: 

First.   The  name  of  this  corporation  is 

Second.  The  location  of  the  principal  office  of  this  corporation  in  the  State  of 
Nevada  is  in  the  Building,  Number  Street,  in  the  City  of  , 

County  of  ,  and  State  of  Nevada. 

Third.   The  objects  for  which  this  corporation  is  formed  are : 

Fourth.   The  total  authorized  capital  stock  of  this  corporation  shall  be 
dollars  (not  less  than  $2,000),  divided  into  shares  of  the  par  value  of 

dollars  per  share.  The  amount  of  subscribed  capital  stock  with  which  it  will  com- 
mence business  is  dollars  (not  less  than  $1,000).  The  amount  actually 
subscribed  is  dollars,  and  the  amount  actually  paid  up  is  dollars. 
(At  this  point  should  be  stated  a  description  of  different  classes  of  stock,  terms  of 
their  creation,  and  amount  of  each  class  subscribed,  and  the  amount  paid  thereon  ; 
or  if  a  non-stock  corporation,  state  the  terms  and  condition  of  membership.) 

Fifth.  The  names  and  post-office  addresses  and  residences  of  each  of  the  origi- 
nal subscribers  to  the  capital  stock,  and  the  amount  subscribed  by  each  are  as 
follows  : 

Names  (not  less  than  three).  P.  O.  Address  and  Residence.  No.  of  Shares. 
Amount  subscribed. 

Sixth    The  period  of  existence  of  this  corporation  is  unlimited. 

Seventh.  The  members  of  the  Governing  Board  of  this  corporation  shall  be 
styled  directors,  and  shall  be  in  number. 

Eighth.  The  resident  agent  of  this  corporation  who  shall  be  in  charge  of  said 
company  in  the  State  of  Nevada  shall  be  ,  a  resident  of 

County,  Nevada,  whose  office  is  at  No.  Street,  in  said  City  of 

Ninth.  The  capital  stock  of  this  corporation  after  the  amount  of  the  subscribed 
price  or  par  value  has  been  paid  in,  or  it  has  been  issued  as  fully  paid  up,  shall  not 
be  subject  to  assessment  to  pay  debts  of  the  corporation. 

Tenth.  (Here  may  be  added  such  regulations  and  details  as  may  be  desired  for 
regulating  the  business,  officers,  etc.) 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  this  day  of 

A.  D.  19     .  (Signatures.) 

Witnesses : 

State  of  \  sg> 

County  of  > 

Be  it.  remembered  that  on  this  day  of  ,  A.  D.  190    ,  personally 

appeared  before  me,  a  in  and  for  said  County  and  State,  , 

known  to  me  to  be  the  persons  described  in,  and  who  executed  the  foregoing 
instrument,  who  acknowledged  to  me  that  they  executed  the  same  freely  and 
voluntarily,  and  for  the  uses  and  purposes  therein  mentioned. 

NEW    HAMPSHIRE. 

ARTICLES  OF  AGREEMENT. 

The  undersigned,  being  persons  of  lawful  age,  hereby  associate  under  the  pro- 
visions of  Chapter  147  of  the  Public  Statutes  of  New  Hampshire,  by  the  following 
articles  of  agreement: 
712 


FORMS   AND    PRECEDENTS. 

Article  1     The  name  of  this  corporation  shall  be : 

Article  2.    The  object  for  which  this  corporation  is  established  is  : 

Article  3.    The  place  in  which  the  business  of  this  corporation  is  to  be  carried 

on  is: 

Article  4.   The  amount  of  the  capital  stock  is  to  be  dollars,   and 

shall  be  divided  into  shares  of  the  par  value  of  $  each. 

Article  5.    The  first  meeting  of  the  corporation  shall  be  held  at  , 

on  the  day  of  at  the  hour  of  M.     Further  notice  of  the  time 

and  place  of  said  meeting  is  hereby  waived. 

Article  6.    If  desired,  a  statement  may  be  inserted  as  to  what  officers  of  the 

corporation  are  to  be  provided  for  in  the  by-laws. 

Names  (at  least  five).  Post-Office  Addresses. 


(Incorporators) 


CERTIFICATE   OF  INCORPORATION 

OF 

United  States  Steel  Corporation  (as  Amended)  (New  Jersey  Charter). 

We,  the  undersigned,  in  order  to  form  a  corporation  for  the  purposes  herein- 
after stated,  under  and  pursuant  to  the  provisions  of  the  Act  of  the  Legislature  of 
the  State  of  New  Jersey,  entitled  "An  Act  concerning  Corporations  (Revision  of 
3896),"  and  the  acts  amendatory  thereof  and  supplemental  thereto,  do  hereby 
certify  as  follows: 

I.  The  name  of  the  corporation  is  United  States  Steel  Corporation. 

II.  The  principal  and  registered  office  of  the  Company  is  in  the 

Building,  ,  New  Jersey,  and  the  name  of  the  agent  therein  and 

in  charge  thereof  and  upon  whom  process  against  this  corporation  may  be  served, 
is 

III.  The  objects  for  which  the  corporation  is  formed  are : 

To  manufacture  iron,  steel,  manganese,  coke,  copper,  lumber,  and  other  mate- 
rials, and  all  or  any  articles  consisting,  or  partly  consisting,  of  iron,  steel,  copper, 
wood,  or  other  materials,  and  all  or  any  products  thereof. 

To  acquire,  own,  lease,  occupy,  use,  or  develop  any  lands  containing  coal  or 
iron,  manganese,  stone,  or  other  ores,  or  oil,  and  any  wood  lauds,  or  other  lands 
fur  any  purpose  of  the  Company. 

To  mine,  or  otherwise  to  extract  or  remove,  coal,  ores,  stone  and  other  minerals 
and  timber  from  any  lauds  owned,  acquired,  leased,  or  occupied  by  the  Company , 
or  from  any  other  lands. 

To  buy'  and  sell,  or  otherwise  to  deal  or  to  traffic  in  iron,  steel,  manganese, 
copper,  stone,  ores,  coal,  coke,  wood,  lumber,  and  other  materials,  and  any  of  the 
products  thereof,  and  any  articles  consisting  or  partly  consisting  thereof. 

To  construct  bridges,  buildings,  machinery,  ships,  boats,  engines,  cars,  and  other 
equipment,  railroads,  docks,  slips,  elevators,  water  works,  gas  works,  and  electric 
works,  viaducts,  aqueducts,  canals,  and  other  water-ways,  and  any  other  means  of 
transportation,  and  to  sell  the  same,  or  otherwise  to  dispose  thereof,  or  to  maintain 
and  operate  the  same,  except  that  the  Company  shall  not  maintain  or  operate  any 
railroad  or  canal  in  the  State  of  New  Jersey. 

To  apply  for,  obtain,  register,  purchase,  lease,  or  otherwise  to  acquire,  and  to 
hold,  use,  own,  operate,  ana  introduce,  and  to  sell,  assign,  or  otherwise  to  dispose 
of,  any  trade  marks,  trade  names,  patents,  inventions,  improvements,  and  processes 
used  in  connection  with  or  secured  under  letters  patent  of  the  United  States,  or 
elsewhere  or  otherwise,  and  to  use,  exercise,  develop,  grant  licenses  in  respect  of, 
or  otherwise  to  turn  to  account  any  such  trade  marks,  patents,  licenses,  processes, 
and  the  like,  or  any  such   property  or  ri^rlit s. 

To  engage  in  any  other  manufacturing,  mining,  construction,  or  transportation 

business  of  any  kind  fir  character  whatsoever,  and  ro  that,  end  to  acquire,  hold,  own. 
and   dispose  of  anv   and   all    property,  assets,  stocks,  bonds,  and    rights  of  any  and 

71:; 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

every  kind,  but  not  to  engage  in  any  business  hereunder  which  shall  require  the  ex- 
ercise of  the  right  of  eminent  domain  within  the  State  of  New  Jersey. 

To  acquire  by  purchase,  subscription,  or  otherwise,  and  to  hold  or  to  dispose  of, 
stocks,  bonds,  or  any  other  obligations  of  any  corporation  formed  for,  or  then  or 
heretofore  engaged  in  or  pursuing,  any  one  or  more  of  the  kinds  of  business,  pur- 
poses, objects  or  operations  above  indicated,  or  owning  or  holding  any  property  of 
any  kind  herein  mentioned,  or  of  any  corporation  owning  or  holding  the  stocks 
or  the  obligations  of  any  such  corporation. 

To  hold  for  investment,  or  otherwise  to  use,  sell,  or  dispose  of,  any  stock,  bonds, 
or  other  obligations  of  any  such  other  corporation ;  to  aid  in  any  manner  any  cor- 
:  poration  whose  stock,  bonds,  or  other  obligations  are  held  or  in  any  manner  guaran- 
teed by  the  Company,  and  to  do  any  other  acts  or  things  for  the  preservation, 
protection,  improvement,  or  enhancement  of  the  value  of  any  such  stock,  bonds,  or 
other  obligations,  or  to  do  any  acts  or  things  designed  for  any  such  purpose ;  and, 
while  owner  of  any  such  stock",  bouds,  or  other  obligations,  to  exercise  all  the  rights, 
powers,  and  privileges  of  ownership  thereof,  and  to  exercise  any  and  all  voting 
power  thereon. 

The  business  or  purpose  of  the  Company  is  from  time  to  time  to  do  any  one  or 
more  of  the  acts  and  things  herein  set  forth ;  and  it  may  conduct  its  business  in 
other  States,  and  in  the  Territories,  and  iu  foreign  countries,  and  may  have  one 
office,  or  more  than  one  office,  and  keep  the  books  of  the  Company  outside  of  the 
State  of  New  Jersey,  except  as  otherwise  may  be  provided  by  law ;  and  may  hold, 
purchase,  mortgage,  and  convey  real  and  personal  property,  either  in  or  out  of  the 
State  of  New  Jersey. 

Without  in  any  particular  limiting  any  of  the  objects  and  powers  of  the  cor- 
poration, it  is  hereby  expressly  declared  and  provided  that  the  corporation  shall 
have  power  to  issue  bonds  and  other  obligations  iu  payment  for  property  purchased 
or  acquired  by  it,  or  for  any  other  object  in  or  about  its  business ;  to  mortgage  or 
pledge  any  stocks,  bonds,  or  other  obligations,  or  any  property  which  may  be  ac- 
quired by  it,  to  secure  any  bonds  or  other  obligations  by  it  issued  or  incurred;  to 
guarantee  any  dividends,  or  bonds,  or  contracts,  or  other  obligations ;  to  make  and 
perform  contracts  of  any  kind  and  description  and  in  carrying  on  its  business,  or 
for  the  purpose  of  attaining  or  furthering  any  of  its  objects,  to  do  any  and  all  other 
acts  and  things,  and  to  exercise  any  and  all  other  powers  which  a  copartnership 
or  natural  person  could  do  and  exercise,  and  which  now  or  hereafter  may  be 
authorized  by  law. 

IV.  The  'total  authorized  capital  stock  of  the  corporation  is  eleven  hundred 
million  dollars  ($1,100,000,000),  divided  into  eleven  million  shares  of  the  par  value  of 
one  hundred  dollars  each.  Of  such  total  authorized  capital  stock,  five  million  five 
hundred  thousand  shares,  amounting  to  five  hundred  and  fifty  million  dollars,  shall 
be  preferred  stock,  and  five  million  five  hundred  thousand  shares,  amounting  to  five 
hundred  and  fifty  million  dollars,  shall  be  common  stock. 

From  time  to  time,  the  preferred  stock  and  the  common  stock  may  be  increased 
according  to  law,  and  may  be  issued  in  such  amounts  and  proportions  as  shall  be 
determined  by  the  Board  of  Directors,  and  as  may  be  permitted  by  law. 

The  holders  of  the  preferred  stock  shall  be  entitled  to  receive  when  and  as  de- 
clared, from  the  surplus  or  net  profits  of  the  corporation,  yearly  dividends  at  the 
rate  of  seven  oer  centum  per  annum,  and  no  more,  payable  quarterly  on  dates  to  be 
fixed  by  the  by-laws.  The  dividends  on  the  preferred  stock  shall  be  cumulative,  and 
shall  be  payable  before  any  dividend  on  the  common  stock  shall  be  paid  or  set 
apart ;  so  that,  if  in  any  year  dividends  amounting  to  seven  per  cent  shall  not  have 
been  paid  thereon,  the  deficiency  shall  be  payable  before  any  dividends  shall  be 
paid  upon  or  set  apart  for  the  common  stock. 

Whenever  all  cumulative  dividends  on  the  preferred  stock  for  all  previous  years 
shall  have  been  declared  and  shall  have  become  payable,  and  the  accrued  quarterly 
instalments  for  the  current  year  shall  have  been  declared,  and  the  Company  shall 
have  paid  such  cumulative  dividends  for  previous  years,  and  such  accrued  quarterly 
instalments,  or  shall  have  set  aside  from  its  surplus  or  net  profits  a  sum  sufficient 
for  the  payment  thereof,  the  Board  of  Directors  may  declare  dividends  on  the  com- 
mon stock,  payable  then  or  thereafter,  out  of  any  remaining  surplus  or  net  profits. 

714 


FORMS    AXD    PRECEDENTS. 

In  the  event  of  any  liquidation  or  dissolution  or  winding  up  (whether  voluntary 
or  involuntary)  of  the  corporation,  the  holders  of  the  preferred  stock  shall  be  en- 
titled to  be  paid  in  full  both  the  paramount  of  their  shares,  and  the  unpaid  dividends 
accrued  thereon,  before  any  amount  shall  be  paid  to  the  holders  of  t lie  common 
stock  ;  and  after  the  payment  to  the  holders  of  the  preferred  stock  of  its  par  value, 
and  the  unpaid  accrued  dividends  thereon,  the  remaining  assets  and  funds  shall  be 
divided  aud  paid  to  the  holders  of  the  common  stock  according  to  their  respective 
shares. 

V.  The  names  and  post-office  addresses  of  the  incorporators,  and  the  number  of 
shares  of  stock  for  which  severally  and  respectively  we  do  hereby  subscribe  (the 
aggregate  of  our  said  subscriptions  being  thousand  dollars,  is  the  amount  of 
capital  stock  with  which  the  corporation  will  commence  business),  are  as  follows  : 

(Here  follow  the  names  and  post-office  addresses  of  each  of  the  incorporators, 
and  the  number  of  shares  of  stock  subscribed  for  by  each.) 

VI.  The  duration  of  the  corporation  shall  be  perpetual. 

VII.  The  number  of  Directors  of  the  Company  shall  be  fixed  from  time  to  time 
by  the  by-laws;  but  the  number,  if  fixed  at  more  than  three,  shall  be  some  multiple 
of  three/  The  Directors  shall  be  classified  with  respect  to  the  time  for  which  they 
shall  severally  hold  office  by  dividing  them  into  three  classes,  each  consisting  of  one- 
third  of  the  whole  number  of  the  Board  of  Directors.  The  Directors  of  the  first 
class  shall  be  elected  for  a  term  of  one  year  ;  the  Directors  of  the  second  class  for  a 
term  of  two  years  ;  and  the  Directors  of  the  third  class  for  a  term  of  three  years  ; 
and  at  each  annual  election  the  successors  to  the  class  of  Directors  whose  terms  shall 
expire  in  that  year  shall  be  elected  to  hold  office  for  the  term  of  three  years,  so  that 
the  term  of  office  of  one  class  of  Directors  shall  expire  in  each  year. 

The  number  of  the  Directors  may  be  increased  as  may  be  provided  in  the  by-laws. 
In  case  of  any  increase  of  the  number  of  the  Directors  the  additional  Directors 
shall  be  elected  as  may  be  provided  in  the  by-laws  by  the  Directors  or  by  the 
stockholders  at  an  annual  or  special  meeting  ;  and  one-third  of  their  number  shall 
be  elected  for  the  then  unexpired  portion  of  the  term  of  the  Directors  of  the  first 
class,  one-third  of  their  number  for  the  unexpired  portion  of  the  term  of  the  Direc- 
tors of  the  second  class,  and  one-third  of  their  number  for  the  unexpired  portion  of 
i  he  term  of  the  Directors  of  the  third  class,  so  that  each  class  of  Directors  shall  be 
increased  equally. 

In  case  of  any  vacancy  in  any  class  of  Directors  through  death,  resignation,  dis- 
qualification or  other  cause,  the  remaining  Directors,  by  affirmative  vote  of  a 
majority  of  the  Board  of  Directors,  may  elect  a  successor  to  hold  office  for  the 
unexpired  portion  of  the  term  of  the  Director  whose  place  shall  be  vacant,  and  until 
the  election  of  a  successor. 

The  Board  of  Directors  shall  have  power  to  hold  their  meetings  outside  of  the 
State  of  New  Jersey  at  such  places  as  from  tune  to  time  may  be  designated  by  the 
by-laws  or  by  resolution  of  the  Board.  The  by-laws  may  prescribe  the  number  of 
Directors  necessary  to  constitute  a  quorum  of  the  Hoard  of  Directors,  which  number 
may  be  less  than  a  majority  of  the  whole  number  ofth<-  Directors. 

'  Unless  authorized  by  votes  given  in  person  or  by  proxy  by  stockholders  holding 
at  least  two-thirds  of  the  capital  Stock  Ot  the  corporation,  which  is  represented  and 
voted  upon  in  person  or  by  proxy  at  a  meeting  specially  called  for  that  purpose,  or 
at  an  annual  meeting,  the  Board  of  Directors  shall  not  moil -age  or  pledge  any  of  its 
real  property,  or  any  shares  of  the  capital  stock  of  any  other  corporation  ;  but  this 
prohibition  shall  not  be  construed  to  apply  to  the  execution  of  any  purchase-money 
mortgage  or  any  other  purchase-money  lien. 

As  authorized  by  the  Act  of  the  Legislature  of  the  State  of  New  Jersey,  passed 
March  22,  1901,  amending  the  seventeenth  section  of  the  Act.  concerning  Corpora- 
tions (Revision  of  L896),  anj  action  which  theretofore  required  the  consent  of  the 

holders  of  two-thirds  of  the  stock  at  any  meeting,  after  notice  to  them  given,  or 
required  their  consent  in  writing  to  be  filed,  may  be  taken  upon  the  consent  of,  and 
the  consent  given  aud   filed  by,  the  holders  of  two-thirds  of    the  stock  of  each  class 

represented  at  Buch  meeting  in  person  or  by  proxy. 

Any  officer  elected  or  appointed  by  Hie  Board  of  Directors  may  be  removed  at 
any  time  by  the  affirmative  vote  of  a  majority  of  the  whole  Board  of  Directors. 


INCORPORATION   AND    ORGANIZATION   OF   CORPORATIONS. 

Any  other  officer  or  employee  of  the  Company  may  be  removed  at  any  time  by 
rote  of  the  Board  of  Directors,  or  by  any  committee  or  superior  officer  upon  whom 
such  power  of  removal  may  be  conferred  by  the  by-laws  or  by  a  vote  of  the  Board 
of  Directors. 

The  Board  of  Directors,  by  the  affirmative  vote  of  a  majority  of  the  whole 
board,  may  appoint  from  the  Directors  an  executive  committee,  of  which  a  majority 
shall  constitute  a  quorum ;  and,  to  such  extent  as  shall  be  provided  in  the  by-laws,, 
such  committee  shall  have  and  may  exercise  all  or  any  of  the  powers  of  the  Board 
of  Directors,  including  power  to  cause  the  seal  of  the  corporation  to  be  affixed  to 
all  papers  that  may  require  it. 

The  Board  of  Directors,  by  the  affirmative  vote  of  a  majority  of  the  whole 
board,  may  appoint  any  other  Standing  Committees,  and  such  Standing  Committees 
shall  have  and  may  exercise  such  powers  as  shall  be  conferred  or  authorized  by  the 
by-laws. 

The  Board  of  Directors  may  appoint  not  only  other  officers  of  the  Company,, 
but  also  one  or  more  vice-presidents,  one  or  more  assistant  treasurers,  aud  one  or 
more  assistant  secretaries ;  and,  to  the  extent  provided  iu  the  by-laws,  the  persons 
so  appointed  respectively  shall  have  and  may  exercise  all  the  powers  of  the  presi- 
dent, of  the  treasurer,  and  of  the  secretary  respectively. 

The  Board  of  Directors  shall  have  power  from  time  to  time  to  fix  and  to  deter- 
mine and  to  vary  the  amount  of  the  working  capital  of  the  Company ;  and  to  direct 
and  determine  the  use  and  disposition  of  any  surplus  or  net  profits  over  and  above 
the  capital  stock  paid  in ;  and  in  its  discretion  the  Board  of  Directors  may  use  aud 
apply  any  sucli  surplus  or  accumulated  profits  in  purchasing  or  acquiring  its  bonds, 
or  other  obligations,  or  shares  of  its  own  capital  stock,  to  such  extent  and  in  such 
manner  and  upon  such  terms  as  the  Board  of  Directors  shall  deem  expedient ;  but 
shares  of  such  capital  stock  so  purchased  or  acquired  may  be  resold,  unless  such 
shares  shall  have  been  retired  for  the  purpose  of  decreasing  the  Company's  capital 
stock  as  provided  by  law. 

The  Board  of  Directors  from  time  to  time  shall  determine  whether  and  to  what 
extent,  and  at  what  times  and  places,  and  under  what  conditions  and  regulations, 
the  aceounts  and  books  of  the  corporation,  or  any  of  them,  shall  be  open  to  the  in- 
spection of  the  stockholders,  and  no  stockholder  shall  have  any  right  to  inspect  any 
account  or  book  or  document  of  the  corporation,  except  as  conferred  by  Statute  or 
authorized  by  the  Board  of  Directors  or  by  a  resolution  of  the  stockholders. 

Subject  always  to  by-laws  made  by  the  stockholders,  the  Board  of  Directors 
may  make  by-laws,  and,  from  time  to  time,  may  alter,  amend,  or  repeal  any  by-laws  ; 
but  anv  by-laws  made  by  the  Board  of  Directors  may  be  altered  or  repealed  by  the- 
stockholders  at  any  annual  meeting,  or  at  any  special  meeting,  provided  notice  of 
such  proposed  alteration  or  repeal  be  included  in  the  notice  of  the  meeting. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals  the  23d  day  of 
February,  1901. 

(Signatures  of  Incorporators.) 
State  of  ) 

County  of  )     ' 

Be  It  Remembered,  that  on  this  day  of  ,  190  ,  before  me,  a  Notary 

Public  in  and  for  said  County,  personally  appeared  ,  who  I  am  satisfied 

are  the  persons  named  in,  and  who  executed  the  foregoing  certificate,  aud  I  having 
first  made  known  to  them  the  contents  thereof,  they  did  each  acknowledge  that 
they  signed,  sealed,  and  delivered  the  same  as  their  voluntary  act  and  deed. 

,  Notary  Public. 

(For  use  when  acknowledgment  is  taken  out  of  the  State.) 

State  of  ) 

County  of  $ 

I,  Clerk  of  the  County  of  and  also  Clerk  of  the  Supreme 

Court  for  the  said  County,  the  same  being  a  Court  of  record,  Do  Hereby  Certify  that 
,  whose  name  is  subscribed  to  the  Certificate  of  the  proof  or  acknowledg- 
ment of  the  annexed  instrument  and  thereon  written,  was  at  the  time  of  the  taking 
of  such  proof  of  acknowledgment  a  Notary  Public,  in  and  for  said  County,  duly  com- 

716 


FORMS    AND    PRECEDENTS. 

•missioned  and  sworn  aud  authorized  by  the  laws  of  said  State  to  take  the  acknowl- 
edgments and  proofs  of  deeds  or  conveyances  for  lands,  tenements,  or  hereditaments, 
in  said  State  of  .     And  further,  that  I  am  well  acquainted  with  the 

handwriting  of  such  Notary  Public,  and  verily  believe  that  the  signature  to  said 
-certificate  of  proof  of  acknowledgment  is  genuine. 

In  testimony  whereof,  I  have  hereunto  set  my  hand  and  affixed  the  seal  of  the 
:said  Court  and  County  the  day  of  ,    190     . 

,  Clerk. 

NEW    MEXICO. 
CERTIFICATE  OF  INCORPORATION 

OF   THE 

Company. 


We,  the  undersigned,  for  ourselves,  our  associates  and  successors,  have  asso- 
ciated ourselves  together  for  the  purpose  of  forming  a  corporation  under  the  laws 
of  the  Territory  of  New  Mexico,  United  States  of  America,  and  we  hereby  certify 
^nd  declare  as  follows,  to  wit : 

I.  The  name  of  the  corporation  is  : 

II.  The  principal  and  registered  office  of  the  Company  is  at  No. 

Street,  in  the  city  (or  town)  of  in  the  Territory  of  New  Mexico,  and  the 

name  of  the  agent  therein  and  in  charge  thereof,  aud  upon  whom  process  against 
this  corporation  may  be  served,  is : 

III.  Che  objects  for  which  and  for  each  of  which  the  corporation  is  formed  are  : 

V.  The  following  provisions  for  the  regulation  of  the  business  and  the  couduct 
of  the  affairs  of  the  company  are  hereby  established  : 

VI.  The  company  shall  be  authorized  to  issue  capital  stock  to  the  amount  of 
dollars  (not  less  than  $3,000).     The  number  of  shares  of  which  the  capital 

stock  shall  consist  is  shares,  of  the  par  value  of  each.     The 

amount  of  capital  stock  with  which  the  company  shall  commence  business  shall  be 
dollars  (not  less  than  $2000).     (If  preferred  stock  is  desired, 
■insert  the  provisions  therefor  in  this  article.) 

VII.  The  number  of  directors  who  shall  manage  the  concerns  of  the  company 
for  the  first  three  mouths  are  ,  all  of  whom  are  citizens  of  the  United 
States,  and  one  of  whom  is  a  resident  of  New  Mexico.  The  names  and  addresses 
of  said  first  Board  of  Directors  are  as  follows : 

Names.  Addresses. 

VIII.  The  duration  of  the  corporation  shall  be  fifty  years. 

IX.  The  names  and  post-office  addresses  of  the  incorporators  and  the  number 
of  shares  of  stock  for  which  severally  and  respectively  we  do  hereby  .subscribe,  the 
•aggregate  of  our  said  subscriptions  being  dollars,  and  is  the  amount  of 
capital  stock  with  which  the  Company  will  begin  business,  are  as  follows  : 

Names.  Post  Office  Addresses.  No.  of  Shares. 

In   Witness   Whereof,  we  have  hereunto  set  our  hands  and  seals  this 
day  of  ,  190  . 

(l.  s.) 
(l.  s.) 
(l.  s.) 
State  of  >  ss> 

County  of  y 

I  certify  that  on  this  day  of  ,  190  ,  before  me  personally 

came  ,  to  me  personally  known,  and  known  to  me  to  be  the  same 

persons  described  in  and  who  executed  the  foregoing  instrument,  and  severally 
duly  acknowledged  to  me  that  they  had  signed  and  executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  .set  my  hand  and  affixed  my  official  seal 
at  said  county  the  day  and  year  last  above  written. 

,  Notary  Public, 

County. 

717 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS 

Territory  op  New  Mexico. 

Office  of  the  Secretary. 

Certificate. 

I  ,  Secretary  of  the  Territory  of  this  office,  do  hereby  certify  there 

was  filed  for  record  in  this  office,  at  o'clock,  M.,  on  the  day  of  , 

A.D.  190  , 

Article  op  Incorporation 

of  the 
Company, 

and  also,  that  I  have  compared  the  foregoing  copy  of  the  same  with  the  original 
thereof  now  on  file,  and  declare  it  to  be  a  correct  transcript  therefrom  and  of  the 
whole  thereof.  _  . 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal 
this  day  of  ,  190  . 

,  Secretary  of  New  Mexico. 

CERTIFICATE  OF  INCORPORATION 

OF 

Brokerage  Company  (New  York  Charter). 

We,  the  undersigned,  being  all  persons  of  full  age,  all  being  citizens  of  the 
United  States  and  all  residents  of  the  State  of  New  York,  desiring  to  form  a  Stock 
Corporation  pursuant  to  the  provisions  of  the  Business  Corporations  Law  of  the 
State  of  New  York,  do  hereby  make,  sign,  acknowledge,  and  file  this  certificate  for 
that  purpose  as  follows. 

Name. 

First.   The  name  of  the  proposed  corporation  is : 

Objects. 

Second.  The  purposes  for  which  it  is  formed  are  to  buy,  sell,  negotiate,  exchange 
pledge,  trade,  and  deal  in  and  with  shares,  stocks,  debentures,  scrip,  bonds,  and  se- 
curities of  any  government,  State,  or  public  or  private  corporation,  or  any  corporate 
body  ;  to  trade  and  deal  in  and  with  real  estate,  mines,  metals,  minerals,  and  oil, 
cotton,  grain,  produce,  or  other  commodities ;  to  invest  in  any  or  either  of  the  fore- 
going, and  from  time  to  time  to  change  the  investments  of  the  Company ;  to  mort- 
gage, pledge,  or  otherwise  charge  all  or  any  part  of  the  investments  of  the  Company 
or  its  property  and  rights  ;  to  make  advances  on,  sell,  or  dispose  of  any  property  or 
investments ;  or  to  act  as  agent,  factor,  or  broker  for  any  or  either  of  the  corporate 
purposes ;  to  purchase  or  otherwise  acquire  the  capital  stock,  shares,  debentures, 
scrip,  bonds,  or  other  evidences  of  indebtedness  of  any  other  corporation,  and  to  issue 
and  exchange  its  own  stock,  shares,  bonds,  debentures,  scrip,  or  other  evidences 
of  indebtedness  in  payment  therefor,  and  while  the  owner  thereof  to  exercise  all  the 
rights  of  ownership,  including  the  power  to  vote  upon  such  stock  or  shares  ;  to  pur- 
chase, receive,  hold,  and  own  mortgages,  debentures,  shares,  and  other  securities  or 
obligations  of  any  public,  private,  or  municipal  corporation,  or  bonds  or  other  securi- 
ties or  obligations  of  the  Government  of  the  United  States,  or  of  any  State,  district, 
territory,  colony,  or  dependency  of  the  United  States  or  of  any  foreign  country,  State, 
or  colony  ;  to  collect  and  receive,  disburse  and  dispose,  of  all  interest,  dividends,  ac- 
cumulations, earnings,  and  income  from,  upon,  or  on  account  of  any  bonds,  deben- 
tures, stocks,  shares,  securities,  contracts,  evidences  of  debt,  obligations,  or  other 
property  held  or  owned  by  the  corporation  thereto ;  to  do  any  and  all  lawful  acts 
tending  to  increase  or  enhance  the  value  of  the  property  of  the  Company  ;  to  issue 
stock,  shares,  bonds,  debentures,  certificates,  scrip,  or  other  corporate  obbgations,  and 
to  secure  the  payment  thereof  by  mortgage,  pledge,  or  deed  of  trust  of  or  upon  the 
whole  or  any  portion  of  the  corporate  property  or  funds  ;  to  sell,  pledge,  or  otherwise 

718 


FORMS   AND    PRECEDENTS. 

dispose  of  bonds,  debentures,  or  other  corporate  obligations  for  proper  and  lawful  cor- 
porate purposes,  as  and  when  the  Board  of  Directors  shall  deem  necessary,  advisable, 
or  expedient  ;  to  promote  the  corporate  business  of  investment  and  dealing  in  secur- 
ities in  all  lawful  ways  ;  and  to  receive,  collect,  transmit,  pay  out,  and  disburse  funds 
in  the  course  of  its  'business ;  and  to  the  extent  authorized  by  law  to  lease,  pur- 
chase, or  otherwise  acquire,  bold,  use,  sell,  trade,  and  deal  in  and  with,  assign,  pledge, 
mortAiije,  transfer,  and  convey  real  and  personal  property  of  any  name  or  nature,  ex- 
cepting^bi'lls  of  exchange,  gold  or  silver  bullion  ;  to  deal  in  foreign  exchange,  to  issue 
and  accept  drafts  and  bills  of  exchange;  to  issue  promissory  notes,  scrip,  drafts, 
acceptances,  or  other  corporate  obligations,  and  negotiate  the  same. 

Generally  to  purchase,  take  on  lease  or  in  exchange,  hire,  or  otherwise  acquire 
any  real  or  personal  property,  and  any  rights  or  privileges  which  the  Company  may 
deem  useful,  necessary,  desirable,  proper,  or  convenient  for  the  purposes  of  its 
business  or  in  the  development  or  extension  thereof. 

Amount  of  Capital  Stock. 

Third.  The  amount  of  capital  stock   is  dollars  ($  ).    The  amount 

of  capital  with  which  the  Company  will  begin  business  is  dollars. 

Number  of  Shares. 

Fourth.  The  number  of  shares  of  which  the  aforesaid  capital  shall  consist 
is  shares  of  the  par  value  of  %  each.  shares  thereof  shall  be 

preferred  stock,  and  shares  thereof  shall  be  common  stock.    The  preferred 

stock  shall  be  entitled,  in  preference  to  the  common  stock,  to  cumulative  dividends 
at  the  rate  of  per  cent  payable  yearly,  half  yearly,  or  quarterly.    Dividends  on 

the  common  stock  shall  not  be  paid  except  when  all  dividends  to  which  the  preferred 
stock  is  entitled  at  full  rate  to  date  are  paid  or  set  apart  for  payment,  and  both 
classes  of  stock  shall  share  equally  in  auy  addition  to  the  profits  of  any  fiscal  year 
of  the  Company  in  excess  of  the  dividend  required  to  be  paid  on  the  preferred  stock 
and  per  cent  upon  the  common  stock.     Such  excess  dividend  shall  not  be 

offset  against  any  subsequent  dividend  upon  the  preferred  stock  thereafter,  as  all 
dividends  shall  be  the  same  as  if  such  excess  dividends  had  not  been  made.  _  Any 
distribution  of  assets  other  than  profits  shall  be  paid,  as  far  as  the  same  will  go, 
first  upon  the  preferred  stock  to  the  amount  thereof,  and  its  per  cent  cu- 

mulative dividends  that  are  unpaid  if  any,  less  the  amount  paid  thereon,  in  any  previ- 
ous distribution  of  such  assets  ;  next  upon  the  common  stock  to  the  amount  of  the 
par  thereon,  less  the  amount,  if  auy,  paid  thereon  in  any  previous  distribution  of 
such  assets,  and  then  upon  the  two  classes  of  stock  equally  per  share. 

Principal  Office. 

Fifth.   The  principal  office  of  this  Corporation  is  to  be  located  in  the  Borough 

of  Manhattan,  in  the  City,  County,  and  State  of  New  York. 

Duration. 

Sixth.   Its  duration  is  to  be  perpetual. 

Number  of  Directors. 

Seventh.    The  number  of  its  Directors  is  to  be 

Directors  for  the  First  Year. 

Eighth.    The  names  and  post-office  addresses  of  its  Directors  for  the  first  year 
are  as  follows : 

Names.  l'ost-Office  Addresses. 

Tl!» 


INCORPORATION   AND    ORGANIZATION    OF    CORPORATIONS. 


Subscribers  to  Capital  Stock. 

Ninth.  The  names  and  post-office  addresses  of  the  subscribers,  and  the  number 
-of  sbares  which  each  agrees  to  take  in  the  corporation  are  as  follows  : 

Tenth.  The  Directors  need  not  be  stockholders  of  the  corporation.  A  majority 
of  the  stockholders  shall  be  necessary  to  constitute  a  quorum  for  the  transaction  of 
business  at  any  meeting  of  the  Board,  but  a  less  number  may  adjourn  such  meeting. 
All  Directors  shall  hold  office  until  the  election  of  their  successors,  and  Directors 
shall  not  be  subject  to  removal  during  their  respective  terms. 

Vacancies  in  the  Board  of  Directors  may  be  filled  by  the  remaining  Directors, 
provided  there  is  present  at  the  meeting  at  which  such  vacancy  is  filled  a  majority 
of  the  full  Board  of  Directors  as  authorized  by  the  certificate  of  incorporation. 

The  Directors  may  hold  their  meetings,  have  an  office,  and  keep  the  books  of  the 
corporation,  except  the  stock  book,  outside  the  State  of  New  York. 

The  Board  of  Directors  by  the  affirmative  vote  of  a  majority  of  the  whole  Board 
may  appoint  an  Executive  Committee  of  three  members  of  the  Board,  of  whom  a 
majority  shall  constitute  a  quorum.  Sucli  Executive  Committee  shall  have  any  and 
all  powers  of  the  full  Board  of  Directors  which  may  be  lawfully  delegated.  The 
term  of  office  of  each  member  of  such  Committee  shall  continue  until  the  expiration 
of  his  term  as  Director  and  until  his  successor  shall  be  elected :  vacancies  in  this 
committee  shall  be  filled  by  the  Board  of  Directors. 

By-laws  may  be  made  by  the  Board  of  Directors  except  as  otherwise  provided 
by  law,  and  may  be  altered  in  such  manner  as  may  be  therein  provided. 

Stockholders  shall  have  no  right  except  as  conferred  by  statute  or  by  the  by-laws 
of  the  corporation  to  inspect  any  books,  papers,  or  accounts  of  the  corporation.  The 
transfer  books  of  the  corporation  may  be  closed  by  order  of  the  Board  of  Directors 
or  the  Executive  Committee  for  thirty  days  or  any  shorter  time,  before  any  meeting 
■of  the  stockholders  and  until  the  day  after  the  final  adjournment  of  such  meeting. 

In  Witness  Whereof,  we  have  made,  signed,  acknowledged,-aud  filed  this  certificate 
Dated,  February    ,  190  . 

State  of  1  gs 

County  of  \ 

I  hereby  certify  that  on  this  day  of  ,  190  ,  before  me  person- 

ally came  ,  to  me  personally  known,  and  known  to  me  to  be  the 

persons  described  in  and  who  executed  the  foregoing  instrument,  and  severally 
duly  acknowledged  to  me  that  they  executed  the  same. 

,  Notary  Public. 

(For  use  out  of  the  State.) 
State  of  )  os 

County  of  $  " 

I,  ,  Clerk  of  the  County  of  ,  and  also  Clerk  of  the 

Court  for  the  said  County,  the  'same  being  a  Court  of  Record,  Do  Hereby 
Certify,  that  ,  whose  name  is  subscribed  to  the  Certificate  of  the  proof 

or  acknowledgment  of  the  annexed  instrument,  and  thereon  written,  was,  at  the 
time  of  the  taking  of  such  proof  of  acknowledgment,  a  Notary  Public  in  and  for 
the  County  of  ,  dwelling  in  the  said  county,  commissioned  and  sworn,  and 

duly  authorized  to  take  the  same.  And  further,  that  I  am  well  acquainted  with  the 
handwriting  of  such  Notary,  and  verily  believe  that  the  signature  to  the  said  certifi- 
cate of  proof  of  acknowledgment  is  genuine. 

In  Testimony  Whereof,  I  have  hereunto  set  my  hand  and  affixed  the  seal  of  the 
said  Court  and  County,  the  day  of  ,  190  . 

,  Clerk. 


720 


FORMS   AND   PRECEDENTS. 


NORTH    CAROLINA. 
CERTIFICATE   OF   INCORPORATION 

OF   THE 

Company. 

This  is  to  certify  that  we  do  hereby  associate  ourselves  into  a 

corporation,  under  and  by  virtue  of  an  act  of  the  Legislature  of  the  State  of  North 
Carolina  (session  1901)  entitled  "  An  Act  to  Revise  the  Corporation  Laws  of  North 
Carolina,"  and  the  several  supplements  thereto  and  acts  amendatory  thereof,  and 
do  severally  agree  to  take  the  number  of  shares  of  capital  stock  set  opposite  our 
respective  names. 

First.     The  name  of  the  corporation  is  Company. 

Second.     The  location  of  the  principal  office  in  this  State  is  at  No. 
Street,  in  the  of  ,  County  of 

Third.     The  objects  for  which  this  corporation  is  formed  are  to : 

Fourth.     The  total  authorized  capital  stock  of  this  corporation  is 

dollars,  divided  into  shares  of  par  value  of  dollars  each. 

Fifth.     The  names  and  post-office  addresses  of  the  incorporators  and  the  number 
of  shares  subscribed  for  by  each,  the  aggregate  of  which,  $  ,  is  the  amount 

of  capital  stock  with  which  this  company  will  commence  business,  are  as  follows: 
Name.  Post-Office  Address.  No.  of  Shares. 

Sixth.     The  period  of  existence  of  this  corporation  is  limited  to  years. 

Seventh.     (Here  insert  any  provisions  for  the  regulation  of  internal  affairs  of  the 
corporation  that  may  be  desired.) 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals  the  day 

of  ,  190  . 

(seal.) 
(seal.) 
Signed,  sealed,  and  delivered  in  the  presence  of 

State  of 
County  of 

This  is  to  certify  that  this  day  before  me,  a  ,  personally  appeared 

,  who  I  am  satisfied  are  the  persons  named  in  and  who  executed  the  fore- 
going certificate  of  incorporation,  and  I  having  first  made  known  to  them  the  con- 
tents thereof,  they  did  each  acknowledge  that  they  did  sign,  seal,  and  deliver  the 
same  as  their  voluntary  act  and  deed,  for  the  uses  and  purposes  therein  expressed. 

In  Testimony  Whereof,  I  have  hereunto  set  mv  hand  and  affixed  my  official  seal, 
this  day  of  ,  A.  D.  190  . 


NORTH    DAKOTA. 

ARTICLES   OF  INCORPORATION 

OF  Tin: 
Company. 

Know  all  Men  by  these  Presents:  That  we,  the  undersigned,  have  this  day  volun- 
tarily associated  ourselves  together  for  the  pur[>ose  of  forming  a  corporation  under 
the  laws  of  the  State  of  North  Dakota.      And  we  hereby  certify  : 

First.     The  name  of  the  said  corporation  is  the 

Second.     The  purpose  for  which  it  is  formed  ifl  to  carry  on  the  business  of 
in  the  County  of  and  State  of  North  Dakota. 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

Third.     That  the  place  where  its  principal  business  is  to  be  transacted  shall  be  the 
of  ,  County  of  ,  and  State  of  North  Dakota.     But  it  may  have  a 

business  office  without  this  State  at  the  City  of  ,  State  of  ,  and  any  meet- 

ings of  incorporators,  stockholders,  or  directors  may  be  held  at  either  of  said  offices. 

Fourth.     That  the  term  for  which  it  is  to  exist  is  years  from  and  after 

the  date  of  its  incorporation. 

Fifth.     That  the  number  of  its  directors  shall  be  ,  and  that  the  names 

and  residences  of  those  who  are  appointed  to  serve  until  their  successors  are  elected 
and  qualified  are : 

Names.  Residences. 


Sixth.     That  the  amount  of  the  capital  stock  of  this  corporation  shall  be 
dollars,  divided  into  shares  of  the  par  value  of  dollars  each. 

Seventh.  That  the  amount  of  said  capital  stock  which  has  been  actually  sub- 
scribed is  dollars,  and  the  following  are  the  names  of  the  persons  by  whom 
the  same  has  been  subscribed  and  number  of  shares  held  by  each  : 

Names  of  Subscribers.  No.  of  Shares.  Amount. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals  this  day 

of  ,  one  thousand  nine  hundred  and 

(Signatures  and  seals.) 

Signed  and  sealed  in  the  presence  of 

State  of  North  Dakota,    > 
County  of  ) 

On  this  day  of  ,  in  the  year  one  thousand  nine  hundred  and 

,  before  me,  a  Notary  Public  in  and  for  said  county,  personally  appeared, 

known  to  me  to  be  the  persons  who  are  described  in,  and  who 

executed  the  within  instrument,  and  they  each  duly  acknowledged  to  me  that  they 

executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal 
the  day  and  year  last  above  written. 
(seal.) 

,  Notary  Public, 
Co. 

OHIO. 
ARTICLES  OF  COMPANY  FOR  PROFIT. 

These  articles  of  incorporation  of  the  Company  witnesseth  :  That 

we,  the  undersigned,  all  (or  a  majority)  of  whom  are  citizens  of  the  State  of  Ohio, 
desiring  to  form  a  corporation  for  profit,  under  the  general  corporation  laws  of  said 
State,  do  hereby  certify : 

First.    The  name  of  said  corporation  shall  be  : 

Second.    Said  corporation  is  to  be  located  at  in  County,  Ohio, 

and  its  principal  business  there  transacted. 

Third.    Said  corporation  is  formed  for  the  purpose  of : 

Fourth.   The  capital  stock  of  said  corporation  shall  be  dollars,  divided 

into  shares  of  dollars  each.     (If  preferred  stock  is  to  be  issued, 

provision  therefor  should  be  inserted  at  this  point.) 

In  Witness  Whereof  we  have  hereunto  set  our  hands  this  day  of 

,  A.  D.  190  . 

(Signatures.) 
State  of  Ohio,    > 
County  of  £  ss< 

Personally  appeared  before  me  the  undersigned,  a  in  and  for  said 

county,  this  day  of  ,  A.  D.  190  ,  the  above  named  , 

722 


FORMS   AND   PRECEDENTS. 

and  each  severally  acknowledged  the  signing  of  the  foregoing  articles  of  incorpora- 
tion to  be  his  free  act  and  deed  for  the  uses  and  purposes  therein  mentioned. 

Wit /less,  my  hand  and  official  seal  on  the  day  and  year  last  aforesaid. 
(seal.)  (Signatures  aud  title.) 

State  of  Ohio,    }   gg 
County  of  > 

I,  ,  Clerk  of  the  Court  of  Common  Pleas  within  and  for  the  county 

aforesaid,  do  hereby  certify  that  ,  whose  name  is  subscribed  to  the  fore- 

going acknowledgment  as  a  ,  was  at  the  date  thereof  a  in  and  for 

said  county,  duly  commissioned  and  qualified,  and  authorized  as  such  to  take  said 
acknowledgment ;  and  further,  that  I  am  well  acquainted  with  his  handwriting,  and 
believe  that  the  signature  to  said  acknowledgment  is  genuine. 

In   Witness  Whereof,  I  have  hereunto  set  my  baud  and  affixed  the  seal  of  said 
Court  at  this  day  of  ,  A.  D.  190     . 

(seal.) 


OKLAHOMA. 
ARTICLES  OF  INCORPORATION. 

Be  It  Known,  That  the  undersigned,  citizens  of  the  Territory  of  Oklahoma,  do 
hereby  voluntarily  associate  ourselves  together  for  the  purpose  of  forming  a  pri- 
vate corporation,  under  the  laws  of  the  Territory  of  Oklahoma,  and  do  hereby 
certify : 

First. 

That  the  name  of  this  corporation  shall  be 

Second. 
That  the  purpose  for  which  this  corporation  is  (are)  formed  is  (are)  to  : 

Third. 
That  the  place(s)  where  its  principal  business  is  to  be  transacted  is  (are)  at : 

Fourth. 
That  the  term  for  which  this  corporation  is  to  exist  is  : 

Fifth. 

The  number  of  directors  or  trustees  of  this  corporation,  and  the  names  and 
residences  of  such  of  them  who  are  to  serve  until  the  election  of  such  officers  and 
their  qualification  : 

Names.  Post-Office  Addresses. 


Sixth. 

That  the  estimated  value  of  the  goods,  chattels,  lands,  rights,  and  credits  owned 

723 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

by  the  corporation  is  dollars. 

That  the  amount  of  the  capital  stock  of  this  corporation  shall  be  dollars, 

and  shall  be  divided  into  shares  of  dollars  each. 

In  Testimony  Whereof,  we  have  hereunto  subscribed  our  names  this  day 

of  ,  A.  D.  190     . 

Territory  of  Oklahoma,    \ 
County  \ 

Personally  appeared  before  me,  a  Notary  Public  in  and  for  said  County,  Territory 
above  named,  .  ,  who  are  personally  known  to  me  to  be  the  same 

persons  who  executed  the  foregoing  instrument  of  writing,  and  duly  acknowledged 
the  execution  of  the  same. 

In  Testimony  Whereof,  I  have  hereunto  subscribed  my  name,  and  affixed  my 
Notarial  Seal  this  day  of  ,  190  . 

,  Notary  Public. 


OREGON. 
ARTICLES  OF  INCORPORATION. 

We,  and  and  ,  whose  names  are  hereunto 

subscribed,  do  hereby  associate  ourselves  together  for  the  purpose  of  forming  a  cor- 
poration under  and  by  virtue  of  the  laws  of  the  State  of  Oregon  for  the  formation 
of  a  private  corporation. 

Article  I.    The  name  of  this  corporation  shall  be  ,  and  its  duration 

shall  be  perpetual. 

Article  II.  The  enterprise,  business,  pursuit,  or  occupation  in  which  this  cor- 
poration proposes  to  engage  is  : 

Article  III  The  principal  office  and  place  of  business  of  this  corporation  shall 
be  at : 

Article  IF.    The  capital  stock  of  this  corporation  shall  be  dollars. 

Article  V.     The  capital  stock  of  this  corporation  shall  be  divided  into 
shares,  of  the  par  value  of  dollars  each. 

(If  the  corporation  is  formed  for  the  purpose  of  navigation  or  making  or  con- 
structing any  railroads,  roads,  canal  or  bridge,  the  termini  of  the  same  or  the  site  of 
such  bridge  must  be  set  forth.) 

In  Witness  Whereof,  we,  the  undersigned,  have  hereunto  set  our  hands  and  seals 
this  day  of  ,  19  . 

In  the  presence  of 

(seal.) 

(seal.) 

(seal.) 


State  of  Oregon, 
County  of 

Be  It  Remembered,  that  on  this  day  of  ,  190  ,  before  me,  the 

undersigned,  a  Notary  Public  in  and  for  said  County  and  State,  personally  appeared 
,  all  to  me  personally  known,  and  known  to  me  to  be  the  indivi- 
duals named  in,  and   who  executed  the  foregoing  articles   of  incorporation,  and 
severally  acknowledged  to  me  that  they  executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  notarial  seal  the  day 
and  year  last  above  written. 

,  Notary  Public  for  Oregon. 

724 


FORMS   AND   PRECEDENTS. 

PENNSYLVANIA. 
FORM   FOR   APPLICATION   FOR   CHARTER. 

Notice  is  hereby  given  that  an  application  will  be  made  to  the  Governor  of  the 
State    of  Pennsylvania   on   the  day  of  ,  190  ,    by    (here   insert 

names  of  proposed  incorporators)  under  an  Act  of  Assembly  of  the  Common- 
wealth of  Pennsylvania,  entitled  "An  Act  to  provide  for  the  incorporation  and 
regulation  of  certain  corporations,"  approved  April  29th,  1874,  and  the  supple- 
ments thereto,  for  a  charter  of  an  intended  corporation,  to  be  called  (here  insert 
name  of  proposed  company),  the  character  and  object  of  which  arc  the  (here  insert 
generally  the  purposes  of  the  proposed  corporation),  and  for  these  purposes,  to 
have,  possess,  and  enjoy  all  the  rights,  benefits,  and  privileges  of  said  Act  of 
Assembly  and  its  supplements. 

,  Solicitor. 


PENNSYLVANIA. 

TO   THE    GOVERNOR   OP   THE    COMMONWEALTH    OF   PENNSYLVANIA: 

Sir,  —  In  compliance  with  the  requirements  of  an  Act  of  the  General  Assem- 
bly of  the  Commonwealth  of  Pennsylvania,  entitled  "An  Act  to  provide  for  the 
incorporation  and  regulation  of  certain  corporations,"  approved  the  29th  day  of  April, 
A.  D.  1874,  and  the  several  supplements  thereto,  the  undersigned, 
of  whom  are  citizens  of  Pennsylvania,  having  associated  themselves  together  for 
the  purpose  hereinafter  specified,  and  desiring  that  they  may  be  incorporated,  and 
that  letters  patent  may  issue  to  them  and  their  successors  according  to  law,  do 
hereby  certify  : 

1.  The  name  of  the  proposed  corporation  is  : 

2.  Said  corporation  is  formed  for  the  purpose  of: 

3.  The  business  of  said  corporation  is  to  be  transacted  in : 

4.  Said  corporation  is  to  exist  for  the  term  of  years. 

5.  The  names  and  residences  of  the  subscribers  and  the  number  of  shares 
subscribed  by  each  are  as  follows  : 

Names.  Residence.  No.  of  Shares. 

0.    The  number  of  directors  of  said  corporation  is  fixed  at  ,  and  the 

names  and  residences  of  the  directors  who  are  chosen  directors  for  the  first  year 
are  as  follows  : 

Name.  Residence. 

7.   The  amount  of  the  capital  stock  of  said  corporation  is    ,  dollars, 

divided  into  shares  of  the  par  value  of  dollars,  and  dollars, 

being  ten  per  centum  of  the  capital  stock,  lias  been  paid  in  cash  to  the  Treasurer 
of  said  corporation,  whose  name  and  residence  is  : 

(Signatures  of  Incorporators.) 

State  of  Pennsylvania,     ) 
County  of  ) 

Before  me  ,  in  and  for  the  county  aforesaid,  personally  came  the 

above  named  ,  who,  in  due  form  of  law,  acknowledged  the  fore- 

going instrument  to  be  their  act  and  deed  for  the  purposes  therein  specified. 

Witness  my  hand  and  seal  of  office,  the  day  of  ,  A.  D.  190  . 

(seal) 


721 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 


State  of  Pennsylvania,    ? 

i 


County  of 

Personally   appeared   before   me,    this  day   of  ,  A.  D.  190  , 

who  being  duly  sworn,  according  to  law,  depose  and  say  that    the   statements 
contained  in  the  foregoing  instrument  are  true. 


Sworn  and  subscribed  before  me,  the  day  and  year  aforesaid 


PHILIPPINES. 
ARTICLES   OF  INCORPORATION 

OF   THE 

(Here  insert  full  name  of  the  corporation.) 

Know  all  Men  by  these  Presents :  That  we,  a  majority  of  whom  are  residents  of 
the  Philippine  Islands,  have  this  day  voluntarily  associated  ourselves  together  for 
the  purpose  of  forming  a  corporation  under  the  laws  of  the  Philippines. 

And  we  hereby  certify  — 

First.  That  the  name  of  said  corporation  shall  be  the  (Here  in- 

sert full  name  of  corporation.) 

Second.    That  the  purposes  for  which  such  corporation  is  formed  are  : 
(Here  insert  full  purposes  of  corporation.) 

Third.  That  the  place  where  the  principal  office  of  the  corporation  is  to  be 
established  or  located  is  .     (Here  insert  where  principal  office  of  the 

corporation  is  to  be  established  or  located.) 

Fourth.  That  the  term  for  which  said  corporation  is  to  exist  is  fifty  years  from 
and  after  the  date  of  incorporation. 

Fifth.  That  the  names  and  residences  of  the  incorporators  of  said  corporation 
are  as  follows : 

Sixth.    That  the  number  of  directors  of  said  corporation  shall  be 
(here  insert  number  of  Directors,  not  less  than  five  nor  more  than  fifteen),  and 
that  the  names  and  residences  of  the  Directors  of  the  corporation  who  are  to  serve 
until  their  successors  are  elected  and  qualified  as  provided  by  the  by-laws,  are  as 
follows,  to  wit: 

Name.  Whose  residence  is  at 


Seventh.   That  the  capital  stock  of  said  corporation  is  pesos 

(here  insert  amount  of  capital  stock),  and  said  capital  stock  is  divided  into 
shares  (here  insert  number  of  shares),  of  the  par  value  each  of  pesos  (here 

insert  par  value  of  each  share). 

Eighth.  That  the  amount  of  said  capital  stock  which  has  been  actually  sub- 
scribed is  (here  insert  full  amount  of  capital  subscribed)  pesos,  and 
the  following  persons  have  subscribed  for  the  number  of  shares  and  amount  of 
capital  stock  set  out  after  their  respective  names  : 

726 


FORMS    AXD    PRECEDENTS. 

Number  of  Amount  of  Capital 

Name.  Residence.  Shares.  Stock  subscribed. 


Total     .     .     . 

Ninth.   That  the  following  persons  have  paid  on  the  shares  of  capital  stock  for 
-which  they  have  subscribed  the  amounts  set  out  after  their  respective  uames : 

Amount  paid  on 
Name.  Residence.  Subscription. 


Total     .     .     . 

Tenth.   That  (here  insert  treasurer's  name  elected  by  subscribers)  has 

been  elected  by  the  subscribers  as  treasurer  of  the  corporation  to  act  as  such  until 
his  successor  is  duly  elected  and  qualified  iu  accordance  with  the  by-laws,  and  that 
as  such  treasurer  he  has  been  authorized  to  receive  for  the  corporation  and  to 
receipt  in  its  name  for  all  subscriptions  paid  in  by  said  subscribers 

Eleventh.  (If  the  corporation  be  a  railroad,  tramway,  wagon-road,  telegraph  or 
telephone  corporation,  here  insert  estimated  length  of  railroad,  tramway,  wagon- 
road,  telegraph  or  telephone  hue,  provinces  through  which  such  line  will  pass,  and 
all  of  its  intermediate  branches  and  connections.) 

Twelfth.  (If  the  corporation  be  a  railroad  or  tramway  corporation,  here  insert 
gauge  of  road,  motive  power  to  be  used,  means  of  applying  such  power,  and 
materials  to  be  used  in  construction.) 

Thirteenth.  (If  the  corporation  be  a  wagon-road  corporation,  here  insert  width 
of  the  road,  method  of  construction,  and  the  construction  material  to  be  used.) 

Fourteenth.  (If  the  corporation  be  a  telegraph  or  telephone  corporation,  here 
insert  construction  material,  appliances,  methods  of  construction,  and  system  to  be 
used.) 

In  Witness  Whereof,  We  have  hereunto  set  our  hands  and  seals  this 
day  of  ,  A.  D.  190     . 

Signed  and  sealed  in  presence  of  (seal.) 


City  or  Municipality  of 
Province  of 

Philippine  Islands. 

On  this  day  of  ,  in  the  year  A.  J),  one  thousand  nine  hundred  and 

,  before  me,  ,  a  notary  public  in  and  for  the  , 

personally  came  (here  insert  names  of  incorporators) 

known  to  me  to  be  the  persons  whose  names  are  subscribed  and  who  executed  the 
within  instrument,  and  each  of  them  acknowledged  to  me  that  he  freely  and 
voluntarily  executed  the  same. 

In  Witness  Whereof  I  have  hereunto  set  my  hand  and  affixed  my  official  seal 
the  day  and  year  last  above  written. 

,  Notary  Public. 
City  or  Municipality  of 
Province  of 

Philippine  Islands. 

(Here  insert  name  of  treasurer  elected  by  subscribers),  being  duly 
sworn,  deposes  and  says  that  on  the  day  of  ,  A.  D.  190     ,  he  was 

duly  elected  by  the  subscribers  named  in  the  foregoing  articles  of  incorporation  as 
treasurer  of  the  corporation,  to  act  as  such  until  his  successor  has  been  duly  elected 
and  qualified  in  accordance  with  the  by-laws  of  the  corporation,  and  that  as  such 

727 


>  ss. 


INCORPORATION  AND   ORGANIZATION   OF  CORPORATIONS. 

treasurer  he  has  been  authorized  by  the  subscribers  to  receive  for  the  corporation 
all  subscriptions  paid  in  by  subscribers  for  the  capital  stock ;  that  pesos 

has  been  actually  subscribed,  and  that  pesos  has  been  paid  to  him  for  the 

benefit  and  to  the  credit  of  the  corporation,  and  that  at  least  twenty  per  centum  of 
the  subscriptions  have  been  actually  paid  to  him  for  the  benefit  and  to  the  credit  of 
the  corporation. 

Subscribed  and  sworn  to  before  me  this  day  of  ,  A.  D.  190     . 


PORTO    RICO. 
ARTICLES  OF  INCORPORATION. 

Know  all  Men  by  these  Presents:  That  we  the  undersigned  (naming 
themselves)  have  this  day  associated  ourselves  together  for  the  purpose  of  forming 
a  corporation  under  Title  II.  of  the  Civil  Code  of  Porto  Rico.     We  hereby  certify 

1.  That  the  name  of  the  corporation  shall  be  the 

2.  That  the  principal  place  of  business  of  the  corporation  shall  be  at  number 

city  ,  Porto  Rico. 

3.  That  the  duration  of  the  corporate  existence  shall  be  perpetual. 

4.  That  the  objects  for  which  the  corporation  is  formed  are  as  follows : 

5.  That  the  amount  of  the  capital  stock  of  said  corporation  hereby  authorized 
is  dollars  (not  less  than  $2,000),  divided  into  shares  of  the  par 
value  of                       each. 

6.  That  said  corpoi-ation  will  commence  business  with  a  capital  stock  of 
dollars  (not  less  than  $1,000). 

7.  The  names  and  addresses  of  the  incorporators,  and  the  number  of  shares  of 
stock  which  each  agrees  to  take  in  the  corporation,  and  the  amount  paid  in  thereon 
by  each  are  as  follows  : 

Names.  P.  O.  Address.  No.  of  Shares  Amount 

subscribed.  paid  in. 


8.  (Here  insert  any  provisions  for  the  regulation  of  the  internal  affairs  of  said 
corporation  which  may  be  desired.) 

In  Witness  Whereof,  We  hereunto  set  our  hands  and  seals  this  day 

of  ,  190     . 


(seal.) 
(seal.) 
(seal.) 


City  or  Municipality  of  ) 

Province  of  ;-  ss. 

Porto  Rico.  ) 

On  this  day  of  ,  in  the  year  A.  D.  one  thousand  nine  hundred  and 

,  before  me,  ,  a  notary  public  in  and  for  the  , 

personally  came  (here  insert  names  of  incorporators) 

known  to  me  to  be  the  persons  whose  names  are  subscribed  and  who  executed  the 
within  instrument,  and  each  of  them  acknowledged  to  me  that  he  freely  and  volun- 
tarily executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal 
the  day  and  year  last  above  written. 

,  Notary  Public. 

728 


FORMS   AND    PRECEDENTS. 


RHODE    ISLAND. 
ARTICLES  OF  ASSOCIATION. 

Know  all  Men  by  these  Presents  :  That  we,  all  of  lawful 

nge,  hereby  agree  to  and  with  each  other  : 

1.  To  associate  ourselves  together  for  the  purpose  of  constituting  a  corporation 
under  aud  by  virtue  of  the  powers  conferred  by  Chapter  176  of  the  General  Laws 
of  the  State  of  Rhode  Island. 

2.  Said  corporation  shall  be  known  by  the  name  of : 

3.  Said  corporation  is  constituted  for  the  purpose  of  engaging  in  business  of: 

4.  Said  corporation  shall  be  located  in  : 

5.  The  capital  stock  of  said  corporation  shall  be  common  stock  in  the  amount 
of  dollars,  to  be  divided  into  shares  of  the  par  value  of  dollars, 
and  preferred  stock  in  the  amount  of  thousand  dollars,  to  be  divided  into 
shares  of  the  par  value  of  dollars  each.  (The  advantages  of  the  preferred 
stock  over  the  common,  if  any,  must  be  set  forth.) 

Li  Testimony  Whereof,  we  have  hereunto  set  our  hands  and  stated  our  resi- 
dences this  day  of  ,  A.  D.  190  . 

(Signatures  and  addresses.) 

State  of  Rhode  Island,  County  of  ,  ss. 

In  the  of  in  said  County  this  day  of  , 

A.  D.  190  ,  then  personally  appeared  before  me  ,  each  and  all 

known  to  me  and  known  by  me  to  be  the  parties  executing  the  foregoing  instrument, 
and  that  they  acknowledged  the  said  instrument  to  be  their  free  act  aud  deed. 

,  Notary  Public 


SOUTH    CAROLINA. 

DECLARATION  AND   PETITION  FOR  CHARTER. 

State  of  South  Carolina, 
County  of 

To  the  Secretary  of  State  of  South  Carolina : 

The  undersigned  petitioners  (insert  names  and  residences),  by  this  their  declara- 
tion would  respectfully  show  : 

1st.    That  their  names  and  residences  are  as  above  given. 

2nd.   The  name  of  the  proposed  corporation  which  they  desire  In  form  is; 

3rd.   The  place  at  which  it  proposes  to  have  its  principal  place  of  business,  or 

to  he  located,  is: 

4th.    The  general  nature  of  the  business  which  it  proposes  to  do  is : 
5th.    The  amount  of  the  capital  stock  to  be  dollars  payable  : 

t'.lli.    The  number  of  shares  into  which  the  capital  stock  is  to  be  divided  is 

of  the  par  value  of  dollars  each. 

7th.    (Any  other  matters  which  m;iy  be  advisable  to  set  forth.) 

Wherefore -join  petitioners  pray  that  the  Secretary  of  State  do  issue  to  them 
a  commission  authorizing  them  to  open  books  of  subscription  to  the  capital  stuck 

729 


INCORPORATION  AND   ORGANIZATION   OF  CORPORATIONS. 

of  the  proposed  corporation,  after  days'  public  notice  in  the  ,  a 

newspaper  published  in  the  county  of 

And  your  petitioners  will  ever  pray,  etc. 

(Signatures.) 
Date. 

Return  of  Corporators.     (South  Carolina.) 

State  of  South  Carolina,    ) 
County  of  ) 

To  the  Secretary  of  State  of  South  Carolina : 

Whereas,  did  on  file  in  the  office  of  Secretary 

of  State  of  South  Carolina  a  written  declaration,  signed  by  themselves,  setting 
forth : 

1st.    The  names  and  residences  of  the  petitioners  to  be,  as  above  given, 

2nd.    The  name  of  the  proposed  corporation  to  be  with  principal 

place  of  business  at  ,  and  the  nature  of  the  business  it  proposes 

to  do. 

3rd.    The  amount  of  the  capital  stock  to  be  dollars  and  the  number 

of  shares  iuto  which  the  same  is  to  be  divided  to  be  ,  of  the  par  value 

of  dollars  each ;  and 

Whereas,  the  above  named  petitioners  were  appointed  by  you  a  Board  of  Corpo- 
rators, the  undersigned,  being  a  majority  thereof,  respectfully  certify  : 

1st.  That  all  the  requirements  of  an  Act  entitled  "  An  Act  to  provide  for  the 
formation  of  certain  corporations  and  to  define  the  powers  thereof"  approved  the 
9th  day  of  March,  A.  D.  1896,  and  all  amendments  thereto,  have  been  duly  and 
fully  complied  with,  fifty  per  cent  of  the  aggregate  amount  of  the  capital  stock 
having  been  subscribed  by  bona  fide  subscribers. 

2nd.    That,  pursuant  to  notice  published  as  required,  a  meeting  was  held  on 
,  at  which  a  majority  of  all  stock  in  value,  being  present,  in  person  or 
by  proxy,  the  following  were  elected  Directors  : 

3rd.   That  subsequently  there  was  elected  as  President,  ;  as  Vice- 

President,  ;  as  Secretary  and  Treasurer 

4th.  That  over  twenty  per  cent  of  the  aggregate  capital  stock  has  been  paid  to 
said  Treasurer. 

Wherefore,  your  petitioners  pray  that  a  charter  be  issued  in  the  name  and  for  the 
purposes  indicated  in  their  written  declaration. 

(Signatures.) 


SOUTH    DAKOTA. 
ARTICLES  OF  INCORPORATION 


Know  all  Men  by  these  Presents:   That  we,  the  undersigned,  , 

for  ourselves,  our  associates  and  successors,  have  associated  ourselves  together  for 
the  purpose  of  forming  a  corporation  under  and  by  virtue  of  the  statutes  and  laws 
of  the  State  of  South  Dakota,  and  we  do  hereby  certify  and  declare  as  follows,  viz. : 

First. 
The  name  of  the  corporation  shall  be 
730 


FORMS   AND   PRECEDENTS. 

Second. 
The  purposes  for  which  this  corporation  is  formed 

Third. 

The  place  where  the  principal  business  of  this  corporation  shall  be  transacted 
is  in  the  City  of  ,  South  Dakota ;  but  it  may  have  business  offices  without 

this  State,  one  at  the  City  of  ,  State  of  ,  and  another  at  the 

City  of  ,  in  the  of  ;  and  any  meetings  of  the  Incor- 

porators, Stockholders,  or  Directors  of  this  Company  may  be  held  at  either  or  any 
of  said  offices  or  places  of  business ;  and  the  books  of  this  corporation  may  be 
kept  at  either  or  any  of  said  offices  or  places  of  business ;  and  any  Incorporator  or 
Stockholder  of  this  Company  entitled  to  be  present  and  vote  at  any  such  meeting 
may  be  represented  by  proxy. 

The  Domiciliary  Office  of  this  corporation  shall  be  at  the  office  of  The 
Company  in  said  city  of  ,  South  Dakota. 

This  Corporation  hereby  appoints  as  its  Resident  Agent  in  South  Dakota,  and 
upon  whom  legal  process  against  this  corporation  may  be  served, 
of  the  City  of  ,  South  Dakota. 

Fourth. 

The  term  for  which  this  corporation  shall  exist  shall  be  twenty-five  (25)  years, 
with  such  right  of  renewal  for  other  and  similar  periods  as  may  now  or  hereafter 
be  permitted  under  the  laws  of  South  Dakota. 

Fifth. 

The  number  of  Directors  of  this  corporation  shall  be  ,  and 

each  Director  shall  hold  at  least  one  share  of  stock.  The  names  and  residences  of 
the  Directors  who  are  to  serve  until  their  successors  are  elected  are  as  follows : 

Names.  Residences. 


An  Executive  Committee  composed  of  two  Directors  may  be 

appointed  by  the  Board  of  Directors  of  this  corporation,  in  which  event  such  Com- 
mittee shall  be  provided  for  in  its  By-Laws  ;  and  said  Executive  Committee  shall 
have  the  same  power  as  the  Board  of  Directors ;  but  this  provision  shall  not  apply 
to  the  election  of  the  Company's  officers. 

Sixth. 

The  amount  of  the  Capital  Stock  of  this  corporation  shall  be  and  is 
Dollars  ($  ),  divided  into  shares  of  the  par  value  of 

Dollars  each ;  of  which  total  number  of  shares  shares  shall  be  Common 

Stock,  and  shares  shall  be  Preferred  Stock. 

When  and  in  the  event  that  Property  is  taken  by  this  corporation  in  considera- 
tion for  Capital  Stock  of  the  corporation,  the  judgment  of  the  Board  of  Directors 
of  the  Company,  made  in  good  faith  and  entered  in  the  minutes  of  the  corporation, 
shall  be  conclusive  as  to  the  value  of  such  property. 

In  Testimony  Whereof,  We  have  hereunto  set  our  hands  this       day  of  , 

190     . 

(Signatures.) 

State  of  > 

County  of  J  SS' 

Be  It  Remembered,  That  on  this  day  of  ,  A.  D.  190     ,  before 

tin'  undersigned,  personally  appeared  the  above  named 

well  and  personally  known  to  me  to  be  the  same  persons  described  in,  and  who  exe- 

731 


INCORPORATION   AND    ORGANIZATION   OF   CORPORATIONS. 

cuted  the  foregoing  instrument,  and  severally  duly  acknowledged  to  me  that  they 
executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal  at 
said  county,  the  day  and  year  last  above  written. 

,  Notary  Public. 
State  of  7  ss 

County  of  \ 

and  ,  being  duly  sworn,  each  for  himself  deposes  and  says  : 

That  he  is  one  of  the  persons  described  in,  and  who  signed  the  foregoing  Articles  of 
Incorporation  as  an  incorporator  therein  ;  that  he  has  read  the  said  articles  and 
knows  the  contents  thereof ;  that  the  incorporators  intended  in  good  faith  to  form  a 
corporation  for  the  purpose  of  a  lawful  business  as  set  forth  in  said  articles,  and 
not  for  the  purpose  of  enabling  any  corporations  to  avoid  the  provisions  of  sections 
770  to  781  inclusive  of  the  Revised  Penal  Code  of  1903  of  the  State  of  South 
Dakota  relating  to  unlawful  trusts  and  combinations,  and  laws  ameudatory  thereto . 


Subscribed  and  sworn  to  before  me  this  day  of  ,  A.  D.  190 

,  Notary  Public. 


STATE    OF   TENNESSEE    (ORDINARY   FORM 
PRESCRIBED    BY    STATUTE). 

CHARTER   OF   INCORPORATION. 

Be  It  Known,  That  by  virtue  of  the  general  laws  of  the  land  (here  insert  names 
of  incorporators)  are  hereby  constituted  a  body  politic  and  corporate,  by  the  name 
and  style  of  for  the  purpose  of 

The  capital  stock  of  said  corporation  shall  be  dollars. 

The  general  powers  of  said  corporation  are :  To  sue  and  be  sued  by  the  cor- 
porate name ;  to  have  and  use  a  common  seal,  which  it  may  alter  at  pleasure ;  if 
no  common  seal,  then  the  signature  of  the  name  of  the  corporation  by  any  duly  au- 
thorized officer  shall  be  legal  and  binding;  to  purchase  and  hold  or  receive  by  gift, 
in  addition  to  the  personal  property  owned  by  said  corporation,  any  real  estate 
necessary  for  the  transaction  of  the  corporate  business,  and  also  to  purchase  or 
accept,  any  real  estate  in  payment  or  part  payment  of  any  debt  due  to  the  corpora- 
tion, and  sell  realty  for  corporation  purposes ;  to  establish  by-laws  and  make  all  rules 
and  regulations,  not  inconsistent  writh  the  laws  and  Constitution,  deemed  expedient 
for  the  management  of  corporate  affairs,  and  to  appoint  such  subordinate  officers 
and  agents  in  addition  to  a  President,  Secretary,  or  Treasurer,  as  the  business  of 
the  corporation  may  require,  designate  the  name  of  the  office,  and  fix  the  compensa- 
tion of  the  officer. 

The  following  provisions  and  restrictions  are  coupled  with  said  grant  of  powers  : 
A  failure  to  elect  officers  at  the  proper  time  does  not  dissolve  the  corporation,  but 
those  in  office  hold  until  the  election  or  appointment  and  qualification  of  their  suc- 
cessors. The  term  of  all  officers  may  be  fixed  by  the  by-laws  of  the  corporation ; 
the  same  not,  however,  to  exceed  two  years.  The  corporation  may,  by  by-laws, 
make  regulations  concerning  the  subscriptions  for,  or  transfer  of  stock ;  fix  upon 
the  amount  of  capital  to  be  invested  in  the  enterprise ;  the  division  of  the  same  into 
shares ;  the  time  required  for  payment  thereof  by  the  subscribers  for  stock ;  the 
amount  to  be  called  for  at  any  one  time,  and  in  case  of  failure  of  any  stockholder 
to  pay  the  amount  thus  subscribed  by  him  at  the  time  and  in  the  amounts  thus 
called,  a  right  of  action  shall  exist  in  the  corporation  to  sue  said  defaulting  stock- 
holder for  the  same.  The  Board  of  Directors  —  which  may  consist  of  five  or  more 
members,  at  the  option  of  the  corporation,  to  be  elected  either  in  person  or  by 
proxy,  by  a  majority  of  the  votes  cast,  each  share  representing  one  vote  —  shall 
keep  a  full  and  true  record  of  all  their  proceedings,  and  an  annual  statement  of 

732 


FORMS   AND    PRECEDENTS. 

receipts  and  disbursements  shall  be  copied  on  the  minutes,  subject  at  all  times  to 
the  inspection  of  any  stockholder.  The  books  of  the  corporation  shall  show  the 
original  or  subsequent  stockholders,  their  respective  interests,  the  amount  which 
has  been  paid  on  the  shares  subscribed,  the  transfer  of  stock,  by  and  to  whom 
made  ;  also  other  transactions  in  which  it  is  presumed  a  stockholder  or  creditor 
may  have  an  interest. 

The  amount  of  any  unpaid  stock  due  from  a  subscriber  to  the  corporation  shall 
be  a  fund  for  the  payment  of  any  debts  due  from  the  corporation,  nor  shall  the 
transfer  of  stock  by  any  subscriber  relieve  him  from  payment  unless  his  transferee 
has  paid  up  all  or  any  of  the  balance  due  on  said  original  subscription. 

By  no  implication  or  construction  shall  the  corporation  be  deemed  to  possess 
any  powers  except  those  hereby  expressly  given  or  necessarily  implied  from  the 
nature  of  the  business  for  which  the  charter  is  granted,  and  by  no  inference  what- 
ever shall  said  corporation  possess  the  power  to  discount  notes  or  bills,  deal  in  gold 
or  silver  coin,  issue  any  evidence  of  debts  as  currency,  or  engage  in  any  business 
outside  the  purpose  of  the  charter. 

The  right  is  reserved  to  repeal,  annul,  or  modify  this  charter.  If  it  is  repealed, 
or  if  the  amendments  proposed,  being  not  merely  auxiliary  but  fundamental,  are  re- 
jected by  a  vote  representing  more  than  half  of  the  stock,  the  corporation  shall 
continue  to  exist  for  the  purpose  of  winding  up  its  affairs,  but  not  to  enter  upon  any 
new  business.  If  the  amendments  or  modifications  being  fundamental  are  accepted 
by  the  corporation  as  aforesaid,  in  a  general  meeting  to  be  called  for  that  purpose, 
any  minor,  married  woman,  or  other  person  under  disability,  or  any  stockholder  not 
agreeing  to  the  acceptance  of  the  modification,  shall  cease  to  be  a  stockholder,  and 
the  corporation  shall  be  liable  to  pay  said  withdrawing  stockholders  the  par  value  of 
their  stock,  if  it  is  worth  so  much;  if  not,  then  so  much  as  may  be  its  real  value  in 
the  market  on  the  day  of  the  withdrawal  of  said  stockholders  as  aforesaid  ;  Provided, 
That  the  claims  of  all  creditors  are  to  be  paid  in  preference  to  said  withdrawing 
•stockholders. 

A  majority  of  the  Board  of  Directors  shall  constitute  a  quorum  and  shall  fill  all 
vacancies  until  the  next  election.  The  first  Board  of  Directors  shall  consist  of  the 
five  or  more  corporators  who  shall  apply  for  and  obtain  the  charter. 

The  said  corporation  may  have  the  right  to  borrow  money  and  issue  notes  or 
bonds  upon  the  faith  of  the  corporate  property,  and  also  to  execute  a  mortgage  or 
mortgages  as  further  security  for  repayment  of  money  thus  borrowed. 

Said  corporation  shall  have  the  power  to  raise,  buy,  sell,  and  deal  in  agricultural 
products,  operate  flouring  and  other  mills,  and  deal  in  merchandise. 

Annually,  during  the  month  of  January,  the  President  shall  make  and  publish 
in  a  newspaper  printed  in  the  county  where  the  principal  office  of  business  is  located, 
or  if  no  newspaper  is  printed  in  that  county,  then  in  an  adjoining,  or  the  nearest 
county  where  a  newspaper  is  printed,  a  sworn  statement,  showing  the  amount  of  the 
capital  stock  and  existing  liabilities,  and  a  list  of  the  names  of  the  stockholders. 

Nothing  but  cash  shall  be  taken  in  payment  of  any  part  of  the  capital  stock,  or 
land  at,  a  fair  cash  valuation,  or  patents  to  the  amount  of  their  value,  as  agreed  on  by 
the  subscriber  and  the  corporation,  and  no  loan  of  money  shall  at  anytime  be  made 
to  any  stockholder  thereof,  and  any  such  loan  shall  render  the  Directors  consenting 
thereto  individually  liable  for  the  amount  thereof ;  this  liability  to  extend  in  favor 
of  innocent  stockholders  as  well  as  creditors. 

The  making  of  a  false  statement,  to  be  printed  as  aforesaid,  shall  render  all  per- 
sons assenting  thereto  individually  liable  to  all  persons  dealing  or  trading  with  said 
Company  upon  the  faith  of  said  fraudulent  statement. 

If  the  indebtedness  of  said  Company  shall  at  any  time  exceed  the  capital  Btock 
paid  in,  the  Directors  assenting  thereto  shall  be  individually  liable  to  the  creditors 
for  said  excess.  The  stockholders  arc  jointh  and  severally  liable  individually  at  all 
times,  for  all  moneys  due  and  owing  to  the  laborers,  servants,  clerks,  and  operatives 
of  the  Company  in  case  the  corporation  becomes  insolvent. 

If  the  Directors  declare  and  pay  any  dividend  when  the  Company  is  insolvent, 
on  which  declaration  of  a  dividend  would  diminish  the  amount  of  the  capital  stook, 
they  shall  be  jointly  and  severally  liable  to  creditors  for  the  amount  of  dividends 

7:;:> 


INCORPORATION   AND   ORGANIZATION   OF  CORPORATIONS. 

thus  declared.  Any  Director  may  avoid  liability  by  voting  against  the  dividend,  or 
by  filing  his  objections  in  writing  as  soon  as  he  ascertains  a  dividend  has  been 
made. 

We,  the  undersigned,  apply  to  the  State  of  Tennessee,  by  virtue  of  the  laws  of 
the  land,  for  a  Charter  of  Incorporation  for  the  purposes  and  with  the  powers,  etc., 
declared  in  the  foregoing  instrument. 

Witness  our  hands,  this  day  of  ,  190  . 

TEXAS. 

FORM  OF  CHARTER. 
State  of  Texas     ) 
County  of  $ 

Know  all  Men  by  these  Presents,  That  we,  ,  and  ,  all 

citizens  of  ,  County,  Texas,  under  and  by  virtue  of  the  laws 

of  this  state,  do  hereby  form  and  incorporate  ourselves  into  a  voluntary  association 
under  the  terms  and  conditions  hereinafter  set  out,  as  follows  : 

1.  The  name  of  the  corporation  is 

2.  The  purpose  for  which  it  is  formed  (here  quote  statutory  purpose). 

3.  The  place  where  the  business  of  the  corporation  is  to  be  transacted  is  at 

,  County,  Texas. 

4.  The  term  for  which  it  is  to  exist  is  years. 

5.  The  number  of  directors,  their  names  and  postoffice  addresses  are  as  follows : 


6.    The  amount  of  the  capital  stock  is  %  divided  into  shares 

of  %  each,  at  least  fifty  per  cent  of  which  capital  stock  has  been  subscribed 

and  ten  per  cent  paid  in. 

In    Testimony   Whereof,   we   hereto  sign  our  names  this   the  day  of 

,  A.  D.  190  . 

State  of  Texas     ) 
County  of  $ 

Before  me,  the  undersigned  authority  on  this  day  personally  appeared 

and  known  to  me  to  be  the  persons  whose  names  are  sub- 

scribed to  the   foregoing  instrument,  and  severally  acknowledged  to  me  that  he 
executed  the  same  for  the  purposes  and  consideration  herein  expressed. 

In  Testimony  Whereof,  I  hereto  subscribe  my  name  and  affix  the  seal  of  my 
office,  this  the  day  of  ,  A.  D.  190  . 

State  of  Texas,  ? 
County  of  > 

I,  ,  of  County,  Texas,  upon  oath  do  hereby  state  that 

fifty  per  cent  of  the  authorized  capital  stock  of  said  ,  amounting  to 

dollars,  has  been  subscribed,  and  ten  per  cent  of  such  authorized  capital  stock, 
amounting  to  dollars,  has  been  paid  in. 

Sworn  to  and  subscribed  before  me  by  ,  this  the        day  of      ,  A.  D.  19  . 

,  Notary  Public, 
County,  Texas. 


734 


FORMS  AND   PRECEDENTS. 

UTAH. 
ARTICLES  OF  INCORPORATION 


This  Agreement  made  and  entered  into  by  and  between  ,  all  of 

,  State  of  Utah,   Witnesseth  : 
That  the  parties  are  desirous  of  forming  a  corporation  under  the  laws  of  the 
State  of  Utah  for  the  purposes  and  on  the  terms  hereinafter  stated : 

Article  One. 

Said  corporation  shall  be  called  and  known  by  the  name  of  ,  and  is 

organized  at 

Article  Two. 

Said  corporation  shall  exist  and  continue  for  a  term  of  fifty  years  unless  sooner 
dissolved  or  disincorporated  according  to  law. 

Article  Three. 
The  object,  business,  and  pursuit  of  said  corporation  shall  be  to  : 

Article  Four. 

The  place  of  the  general  office  and  business  of  said  corporation  shall  be  at 
,  State  of  Utah. 

Article  Five. 

The  amount  of  the  capital  stock  of  said  corporation  shall  be  shares  of 

the  face  or  par  value  of  dollars  each. 

Article  Six. 

The  amount  of  the  capital  stock  subscribed  by  each  of  the  incorporators  above 
named,  parties  to  this  agreement,  is  as  follows,  that  is  to  say  : 

Article  Seven. 

The  officers  of  said  corporation  shall  be : 

Article  Eight. 

To  be  eligible  to  an  office  in  this  corporal  ion  the  person  must  be  the  owner,  as 
shown  by  the  books  of  the  corporation,  of  at  least  one  share  of  the  capital  stock 
thereof,  and  the  President  and  Treasurer  must  be  directors  of  said  corporation; 
the  Secretary  may  or  may  not  be  a  director  of  said  corporation,  and  if  a  director 
may  be  joined  with  the  office  of  Treasurer. 

Article  Nine. 

The  following  named  persons,  parties  hereto,  shall  be  directors  of  said  corpora- 
tion  until  the  next  annual  meeting  of  the  stockholders  thereof,  as  hereinafter  pro- 
vided, namely:  .  And  the  said  shall  be  President,  said 
shall  be  Secretary  and  Treasurer,  and  until  their  successors  shall  lie  duly 
elected  and  qualified.  Any  vacancy  caused  by  the  resignation,  death,  or  removal  of 
either  or  any  of  the  said  directors  or  officers,  may  he  Idled  by  the  Board  of  Directors. 

7:;:. 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

Article  Ten. 

The  term  of  office  of  the  officers  of  said  corporation  after  the  first  annual  meet- 
ing, shall  be  ,  and  until  their  successors  shall  be  duly  elected  and  shall 
have  duly  qualified. 

Article  Eleven. 

The  annual  stockholders'  meeting  of  said  corporation  for  the  election  of  officers 
and  for  the  transaction  of  any  such  other  business  as  shall  lawfully  come  before  it, 
shall  be  held  on  the  in  each  year,  at  ,  Utah,  and  representation 

of  a  majority  of  the  capital  stock  of  said  corporation  shall  be  necessary  to  legally 
hold  said  meeting,  and  all  stockholders'  meetings  of  said  corporation  shall  be 
either  general  or  special.  The  officers  of  said  corporation,  at  such  meetings,  shall 
be  elected  and  declared  to  be  elected  to  said  offices  respectively.  Each  stock- 
holder shall  be  entitled  to  as  many  votes  as  he  holds  of  said  capital  stock. 
Stock  representation,  by  proxy,  duly  appointed,  shall  be  allowed  at  all  meetings  of 
said  corporation,  either  general  or  special.  No  public  notice  shall  be  required  of 
the  holding  of  the  annual  stockholders'  meetings.  Special  meetings  of  the  stock- 
holders may  be  called  by  the  President  or  by  any  directors,  and  notice 
thereof  shall  be  sufficient  if  personally  served  on  each  stockholder,  or  by  letter  post- 
paid, addressed  to  him  at  his  place  of  residence. 

Article  Ticelve. 
members  of  the  Board  of  Directors  shall  constitute  a  quorum  to 


transact  business  of  the  corporation. 

Article  Thirteen. 

The  private  property  of  the  stockholders  of  the  corporation  shall  not  be  liable 
for  the  debts  of  the  corporation. 

Article  Fourteen. 

Any  director  or  officer  of  said  corporation  maybe  removed  at  a  stockholders' 
meeting,  general  or  special,  by  vote  of  two-thirds  of  the  capital  stock  of  this  cor- 
poration, and  any  officer  or  director  may  resign  by  filing  a  written  resignation  with 
the  Secretary  of  the  corporation. 

Article  Fifteen. 

The  capital  stock  of  said  corporation  subscribed  by  is  fully  paid  by 

the  conveyance  to  said  corporation  by  of  the  _        .     (For  all  cor- 

porations but  mining  and  irrigation  companies  there  must  be  inserted  here  a  full 
description  of  the  property  conveyed  having  a  fair  cash  value  equal  to  the  par  value 
of  the  stock  for  which  it  is  transferred.) 

Article  Sixteen. 

It  shall  be  the  duty  of  the  Board  of  Directors  to  elect  a  manager  who  shall  have 
the  general  supervision  and  management  of  the  business  of  said  corporation. 

In  Witness  Whereof,  said  parties  have  hereunto  set  their  hands  and  seals  the  day 
and  year  first  above  written. 

State  of  Utah,  )  gg 
County  of  $ 

,  being  each  severally  duly  sworn,  on  oath  do  depose  and 
say  that  they  have  commenced  to  carry  on,'  and  it  is  their  bona  fide  intention  to 
carry  on,  the  business  mentioned  in  the  foregoing  agreement  and  Articles  of 
Incorporation,  and  affiants  verily  believe  that  each  party  to  said  agreement  has 
paid  and  is  able  to  and  will  pay'  the  amount  of  stock  subscribed  for  by  him,  and 
736 


FORMS  AND   PRECEDENTS. 

that  ten  per  cent  of  the  capital  stock  and  ten  per  cent  of  the  stock  subscribed  by  each 
stockholder  has  been  paid  in. 


Subscribed  in  my  presence  and  sworn  to  before  me  this  day  of  , 

190  . 

(In  the  case  of  all  but  mining  and  irrigation  companies  the  following  affidavit 
must  be  made.) 

State  of  Utah,  J  gs 
County  of  ) 

,  ,   and  ,  being  each   severally  sworn,  on   oath 

deposes  and  says  that  he  has  examined  and  appraised  the  conveyed  by 

to  the  corporation  by  these  articles  formed,  in  full  payment  of  their 
capital  stock,  and  they  do  each  hereby  on  their  oath  say  that  the  said  property  so 
conveyed  to  said  corporation  is  reasonably  worth  the  sum  of  dollars,  and 

that  said  sum  of  dollars  is  a  fair  cash  market  value  of  said  property. 

Subscribed  iu  mv  presence  and  sworn  to  before  me  this 

day  of  ,  190  . 

VERMONT. 

ARTICLES  OF  ASSOCIATION 

OF   THE 


We,  the  subscribers,  hereby  associate  ourselves  together  as  a  corporation  under 
the  laws  of  the  State  of  Vermont,  to  be  known  by  the  name  of  ,  for 

the  purpose  of  at  ,  in  the  County  of  ,  in  the 

State  of  Vermont,  with  a  capital  stock  of  dollars,  divided  into 

shares  of  dollars  each. 

Dated  at  ,  in  the  County  of  ,  this  day  of  ,  A.  D. 

190  . 

Subscribers.  Post-Office  Address. 


VIRGINIA. 
CERTIFICATE   OF  INCORPORATION 

OF 

(Corporation  or  Incorporated). 


This  is  to  certify  that  we  do  hereby  associate  ourselves  to  establish  a  corpora- 
tion under  and  by  virtue  of  the  provisions  of  an  Act  of  the  General  Assembly  of 
the  State  of  Virginia,  entitled  "  An  Act  Concerning  Corporations,"  which  became 
a  law  on  the  21st  day  of  May,  1903,  for  the  purposes  and  under  the  corporate 
name  hereinafter  mentioned,  and  to  that  end  we  do,  by  this  our  certificate,  set  forth 
as  follows : 

First.    The   name   of  the   corporation  is   to   be  Company   (or 

Incorporated). 

Second.  The  name  of  the  county  (city,  or  town)  wherein  the  principal  oflice  iu 
this  State  is  to  be  located  is : 

737 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

Third.    The  purposes  for  which  it  is  formed  are  as  follows  : 

Fourth.    The  maximum  amount  of  the  capital  stock  of  the  corporation  is  to  be 
dollars;  the  minimum  amount  of  the  capital  stock  of  the  corporation  is  to 
be  dollars,  and  the  capital  stock  of  the  corporation  is  to  be  divided  into 

shares  of  dollars  each. 

(If  preferred  stock  is  to  be  issued,  a  statement  of  the  amount,  together  with 
the  terms  on  which  it  is  created,  must  be  here  set  forth.) 

Fifth.    The  period  for  the  duration  of  the  corporation  is  unlimited. 

Sixth.  The  names  and  residences  of  the  officers  and  directors  who,  unless 
sooner  changed  by  the  stockholders,  are  for  the  first  year  to  manage  the  affairs 
of  the  corporation  are  as  follows  : 

Officers.  Offices.  Residences. 


Directors.  Residences. 


Seventh.    The  amount  of  real  estate  to  which  its  holdings  at  any  time  are  to  be 
limited  is  acres. 

Eighth.    The  following  provisions  for  the  regulation  of  the  business  and  the 
conduct  of  the  affairs  of  the  corporation  are  hereby  established. 

Given  under  our  hands  this  day  of  ,  190     . 

(Signatures.) 
State  of  Virginia, 
County  of  ,  to  wit: 

I,  ,   a  Notary  Public,  for    the   county   aforesaid  in   the 

State  of  Virginia,  do  certify  that  ,  and  ,  whose 

names  are  signed  to  the  writing  above,  bearing  date  on  the  day  of  , 

190     ,  have  acknowledged  the  same  before  me  in  my  county  aforesaid.     My  term 
of  office  expires  on  the  day  of  ,  190     . 

Given  under  my  hand  this  day  of  ,  190     . 

,  Notary  Public. 
Virginia. 

In  the  Circuit  Court  of  County. 

The  foregoing  certificate  of  incorporation  of  the  Company,  incor- 

porated, was  presented  to  me  ,  Judge  of  the  Court  of 

in  term  time  (or  in  vacation),  ^d  having  been  examined  by  me,  I  there- 
upon certify  hereon  that  the  said  certificate  of  incorporation  is,  in  my  opinion,  signed 
and  acknowledged  in  accordance  with  the  requirements  of  the  Act  of  the  General 
Assembly  of  Virginia,  entitled  "  An  Act  Concerning  Corporations,"  which  became 
a  law  on  the  21st  day  of  May,  1903,  for  such  cases  made  and  provided. 

Given  under  my  hand  this  day  of  ,  190     . 

,  Judge. 


WASHINGTON. 
ARTICLES  OF   INCORPORATION 

OF   THE 


We,  the  undersigned  persons,  one  of  whom  is  a  resident  of  the  State  of  Wash- 
ington and  a  majority  of  whom  are  citizens  of  the  United  States,  hereby  associate 

738 


FORMS    AND    PRECEDENTS. 

ourselves  for  the  purpose  of  forming  a  corporatiou,  and  for  that  purpose  execute 
these  Articles  of  Incorporation  iu  triplicate. 

Article  First.    The  name  of  this  corporation  shall  be  : 

Article  Second.  The  objects  for  which  this  corporation  is  formed  are:  To  have 
offices,  conduct  its  business,  and  promote  its  objects  both  within  and  without  the 
State  of  Washington,  and  in  all  parts  and  places  elsewhere,  wherever  may  be  de- 
sired, without  any  restriction  whatsoever  as  to  place,  upon  compliance  with  the 
laws  of  such  place. 

Article  Third.   The  capital  stock  of  this  corporation  shall  be  dollars, 

divided  into  shares  of  the  par  value  of  dollars  a  share.     (If 

preferred  stock  is  issued,  add  :)  Of  such  capital  stock  shares,  amounting  to 

dollars,   shall   be   preferred   stock,   and  shares,   amounting   to 

dollars,  shall  be  common  stock.  The  preferred  stock  shall  be  entitled 
out  of  any  and  all  surplus  net  profits,  whenever  declared  by  the  trustees,  to  non- 
cumulative  dividends  at  the  rate  of,  but  uot  to  exceed  per  cent  (not  to 
exceed  twelve  per  cent)  per  annum  for  the  fiscal  year  beginning  on  the 
day  of  19  ,  and  to  priority  of  payment  of  any  dividend  on  the  common  stock  for 
such  fiscal  year.  The  common  stock  shall  be  subjeei  to  the  prior  rights  of  the 
holders  of  the  preferred  stock  as  herein  above  set  forth.  If,  after  providing  for 
the  payment  in  full  of  the  dividends  for  any  fiscal  year  on  the  preferred  stock, 
there  shall  remain  any  surplus  net  profits  of  such  year,  and  of  any  other 
fiscal  year  for  which  full  dividends  shall  have  been  paid  on  the  preferred  stock, 
then  and  from  time  to  time  the  same  shall  be  declared  by  the  trustees:  and  out  of 
such  surplus  net  profits,  after  the  close  of  any  said  fiscal  year,  the  trustees  may 
declare  a  dividend  upon  the  common  stock  of  this  corporation  for  such  fiscal  year. 
No  dividend,  however,  shall  be  paid  upon  any  common  stock  until  after  the  divi- 
de nils  upon  the  preferred  stock  have  been  set  aside  to  the  owners  of  the  said 
preferred  stock. 

In  case  of  the  liquidation  or  dissolution  of  this  corporation,  the  holders  of  pre- 
ferred stock  shall  receive  the  par  value  of  their  preferred  shares  out  of  the  surplus 
funds  of  the  corporation  before  anything  shall  be  paid  therefrom  to  the  holders  of 
the  common  stock.  (If  non-assessable  stock  is  desired,  as  :)  The  capital  stock 
of  this  corporation  (is  issued  fully  paid  up  and)  shall  be  and  is  hereby  made  abso- 
lutely and  forever  non-assessable  by  this  corporation  for  any  purpose. 

Article  Fourth.    The  time  of  existence  of  this  corporation  shall  be  fifty  years. 

Article  Fifth.  The  number  of  trustees  of  this  corporation  shall  not  be  less  than 
two  nor  more  than  ,  and  the  names  of  the  first  trustees  who  shall  manage 

the  affairs  of  this  Company  until  the  day  of  ,  19       (not  less  than 

two  nor  more  than  six  months)     are  (two  or  more). 

Article  Sixth.  The  Board  of  Trustees  shall  have  power  to  make  the  By-Laws  of 
this  corporation. 

Article  Seventh.  The  stockholders  and  trustees  shall  have  power  to  hold  their 
meetings  and  to  keep  the  books,  documents,  and  papers  of  this  corporation  without 
the  State  of  Washington,  at  sucli  place  or  places  as  the  Board  of  Trustees  may 
determine,  except  such  books  and  meetings  as  are  required  by  the  law  of  the  Stati 
of  Washington  to  be  kept  aud  to  be  held  within  the  State.  (Note:  The  annual 
election  of  trustees  must  be  held  within  the  State.  Their  election  may  be  held 
by  instructed  proxies  sent  to  the  resident  trustee.  The  law  further  requires  thai 
the  trustees  cause  a  book  to  be  kept-  at  the  principal  place  of  business,  which  book 
shall  contain  the  "names  of  all  persons,  alphabetically  arranged,  who  are  or  shall 
be  stockholders  of  the  corporation,  and  showing  the  Dumber  of  shares  of  stock  held 
by  them  respectively,  and  the  time  when  they  became  the  owners  of  such  shares.") 

Article  Eighth.  The  principal  place  of  business  of  ibis  corporation  shall  be  in 
the  City  "'"  >  County.  State  of  Wasliington,  with  such 

branch  office  or  offices,  either  within  or  without  the  State  of  Washington,  as 
the  trustees  may  desire,  at  any  of  which  branch  offices,  as  may  be  selected  by  the 
trustees,  all  stockholders9  and  trustees'  meetings  not  required  to  be  held  in  the 
State  of  Washington  may  be  held  :    Provided,  Thai  this  corporation  shall  at  all 

times  keep  at  its  principal  place  of  business  within  this  State  a  resident  trustee 

739 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

In  Witness  Whereof,  we  have  this  day  of  ,  A.  D. 

hereunto  set  our  hands  and  seals  in  triplicate. 

(seal.) 
(seal.) 

Witness : 

State  of  > 

County  of  | 

I>  ,  a  Notary  Public  in  and  for  the  State  of  ,  duly 

commissioned,   sworn,   and  qualified,   do  hereby  certify  that  on  this  day 

of  ,19     ,  before  me  personally  appeared  ,  to  me  known 

to  be  the  individuals  described  in,  and  who  executed  the  within  instrument,  and 
acknowledged  that  they  signed  and  sealed  the  same  as  their  free  and  voluntary 
act  and  deed  for  the  uses  and  purposes  therein  mentioned. 

Given  under  my  hand  and  official  seal  this  day  of  ,  A.  D.  19     . 

,  Notary  Public. 

TRUSTEE'S   OATH   OF  OFFICE. 

State  of  I 

County  of  j 

each  being  duly  sworn,  on  oath  deposes  and  says : 
That  on  the  day  of  ,  19     ,  I  was  duly  and  regularly  elected 

a  trustee  of  ,  a  corporation  with  its  principal  place  of  business  in 

the  City  of  ,  in  the  County  of  ,  and  State  of  Washington,  to 

serve   as  such   trustee   until  the  day   of  ,  19     .     That  I  will 

faithfully  and  conscientiously  perforin  all  duties  of  my  said  office  as  such  trustee. 


Subscribed  and  sworn  to  before  me 

this  day  of  ,  19     . 

,  Notary  Public. 


WEST  VIRGINIA. 

CERTIFICATE   OF   INCORPORATION. 

I.  We,  the  undersigned,  agree  to  become  a  corporation  by  the  name  of 

II.  The  principal  place  of  business  of  said  corporation  shall  be  located  at  No. 
,  Street,  in  the  City  (2)  town,  village  of  ,  in  the  county  of 

and  State  of  .     Its  chief  works  will  be  located  in  (3) 

(Insert  number  and  name  of  street  if  in  a  city  having  street  numbers:  if  not,  strike  out. 
2.  Erase  the  word  city,  town,  or  village  as  the  case  may  be.  3.  Give  location  of  chief  works 
of,  at  same  place  as  principal  place  of  business;  say,  '"  The  Chief  Works  will  be  located  at 
the  same  place."  If  the  chief  works  are  not  in  West  Virginia,  it  is  only  necessary  to  state 
the  name  of  the  State  or  Territory  in  which  they  are  located;  if  the  chief  works  and  prin- 
cipal place  of  business  are  both  in  West  Virginia,  then  it  is  necessary  to  state  the  magisterial 
District  and  County  in  which  the  chief  works  are  located,  thus,  "  in  the  District  of  , 

in  the  County  of  ,  in  the  State  of  West  Virginia,"  or,  if  the  nature  of  the  case 

may  require  it,  say  "  in  the  district  of  and  County  of,  and  else- 

where in  the  State  of  West  Virginia."     If  there  be  no  chief  works,  say,  '*  Said  Corporation 
will  have  no  chief  works.") 

III.  The  objects  aud  purposes  for  which  this  corporation  is  formed  are  as 
follows : 

IV.  The  amount  of  the  total  authorized  capital  stock  of  said  corporation  shall 
be  dollars,  which  shall  be  divided  into  shares  of  the  par 
value  of                        dollars  each ;  of  which  authorized  capital  stock  the  amount 

740 


FORMS    AXD    PRECEDENTS. 

of  dollars  has  been  subscribed,  and  the  amount  of  dollars 

has  been  paid. 

V.    The  names  and  post-office  addresses  of  all  the  incorporators,  and  the  number 
of  shares  of  stock  subscribed  for  by  each  are  as  follows  : 

Post-Office         No.  of  Shares         No.  of  Shares         Total  No.  of 
Names.  (7)     Addresses.  (8)    Common  Stock.     Preferred  Stock.      Shares.  (9) 


VI.  This  corporation  is  to  expire  (1) 

VII.  (Here  insert  any  special  provisions  desired  ;  and  also  number  of  acres  of 
laud  desired  to  hold  in  West  Virginia,  if  such  number  be  above  ten  thousand 
acres.) 

Given  under  our  hands  this  day  of  ,  190  . 

(All  the  incorporators  must  sign  here.) 
State  of 


I 


County  of 

I,  ,  a  Notary  Public  in  and  for  the  County  and  State  aforesaid, 

hereby  certify  that  ,  whose  names  are  subscribed  to  the  fore- 

going agreement  bearing  date  the  day  of  ,  190  ,  this  day 

personally  appeared  before  me  in  my  said  county,  and  severally  acknowledged  their 
signatures  to  the  same. 

And  I  further  certify  that  and  ,  two  of  the  incorpora- 

tors named  in  said  agreement,  made  oatli  before  me  that  the  amount  therein  stated 
to  have  been  paid  on  the  capital  has  been  in  good  faith  paid  in,  for  the  purpose  and 
business  of  the  intended  corporation,  without  any  intention  or  understanding  that 
the  same  shall  be  withdrawn  therefrom  before  the  expiration  or  dissolution  of  this 
Corporation. 

Given  under  my  hand  and  official  seal  this  day  of  ,  190  . 

,  Notary  Public. 

(The  following  affidavit  must  be  made  by  at  least  two  of  the  incorporators  named  in 
the  agreement  wherein  it  is  stated  that  the  "principal  place  of  business"  is  located  in  West 
Virginia,  and  for  which  it  is  proposed  to  pay  the  rate  of  annual  license  tax  prescribed  for 
resident  corporations.) 

State  of  ") 

County  of  >  ss' 

I,  ,  a  Notary  Public  in  and  for  the  County  and  State  aforesaid, 

do  hereby  certify  that  and  ,  two  of  the  persons  who 

have  executed  the   foregoing  agreement,  bearing   date  of  the  day  of 

,  190  ,  this  day  personally  appeared  before  me  in  my  said  county,  and 
made  oath  that  the  statement  in  said  agreement,  to  wit,  "  that  the  principal  place 
of  business  of  said  corporation  shall  be  located  at  in  the   County 

of  and  State  of  West  Virginia"  is  true,  and  that  said    principal 

place  of  business  and  chief  works  have  been  located  as  therein  stated  in  good 
faith,  and  not  for  the  pnrpose  of  evading  any  law  of  the  State  of  West  Virginia,  and 
especially  not  for  the  purpose  of  avoiding  the  payment  of  the  difference  bel  ween  the 
amount  of  the  annual  license  tax  on  the  charters  of  corporations  having  their 
principal  place  of  business  within  the  State  of  West  Virginia,  and  those  corpora- 
tions having  their  principal  place  of  business  or  chief  works  without  said  State  ;  and 
that  said  corporation  named  in  said  agreement  proposes  in  good  faith  to  carry  on  its 
business  and  to  have  its  principal  place  of  business  and  its  chief  works  (if  it  have 
such)  within  the  State  of  Wesl  Virginia. 

Given  under  my  hand  and  official  seal  this  day  of  ,  1 90  . 

,  Notary  Public. 

(seal.) 


Til 


INCORPORATION   AND   ORGANIZATION    OF   CORPORATIONS. 


WISCONSIN. 

Know  all  Men  by  these  Presents  :  That  the  undersigned,  adult  residents  of 
the  State  of  Wisconsin,  do  hereby  make,  sign,  and  agree  to  the  following 

ARTICLES   OF  ORGANIZATION. 

Article  I.  The  undersigned  have  associated,  and  do  hereby  associate  themselves 
together  for  the  purpose  of  forming  a  corporation  under  Chapter  86  of  the  Wiscon- 
sin Statutes  of  1898,  and  the  acts  amendatory  thereof  and  supplementary  thereto, 
the  business  and  purposes  of  which  corporation  shall  be  ,  which  said 

business  is  to  be  carried  on  within  the  State  of  ,  and  especially  within 

the  County  of  in  said  State. 

Article  II.   The  name  of  said  corporation  shall  be  ,  and  its  location 

shall  be  in  the  ,  Wisconsin. 

Article  III.   The  capital  stock  of  said  corporation  shall  be  ,  and  the 

same  shall  consist  of  shares,  each  of  which  said  shares  shall  be  of  the 

face  or  par  value  of  dollars. 

Article  IF.  The  general  officers  of  said  corporation  shall  be  a  President,  Vice- 
President,  Secretary,  and  Treasurer,  and  the  Board  of  Directors  shall 
consist  of  stockholders.  (Provision  may  be  here  made  for  dividing  the 
directors  into  three  classes  if  desired.) 

Article  V.  The  principal  duties  of  the  President  shall  be  to  preside  at  all  meet- 
ings of  the  Board  of  Directors,  and  to  have  a  general  supervision  of  the 
affairs  of  the  corporation. 

The  principal  duties  of  the  Vice-President  shall  be  to  discharge  the  duties  of  the 
President  in  the  event  of  the  absence  or  disability,  for  any  cause  whatever,  of  the 
latter. 

The  principal  duties  of  the  Secretary  shall  be  to  countersign  all  deeds,  leases, 
and  conveyances  executed  by  the  corporation,  affix  the  seal  of  the  corporation 
thereto,  and  to  such  other  papers  as  shall  be  required  or  directed  to  be  sealed,  and 
to  keep  a  record  of  the  proceedings  of  the  Board  of  Directors,  and  to  safely  and 
systematically  keep  all  books,  papers,  records,  and  documents  belonging  to  the 
corporation,  or  in  any  wise  pertaining  to  the  business  thereof. 

The  principal  duties  of  the  Treasurer  shall  be  to  keep  and  account  for  all  mon- 
eys, credits,  and  property,  of  any  and  every  nature,  of  the  corporation,  which  shall 
come  in  his  hands,  and  keep  an  accurate  account  of  all  moneys  received  and  dis- 
bursed, and  proper  vouchers  for  moneys  disbursed,  and  to  render  such  accounts, 
statements,  and  inventories  of  moneys  received  and  disbursed,  and  of  money  and 
property  on  hand,  and  generally  of  all  matters  pertaining  to  this  office,  as  shall  be 
required  by  the  Board  of  Directors. 

The  Board  of  Directors  may  provide  for  the  appointment  of  such  additional 
officers  as  they  may  deem  for  the  best  interests  of  the  corporation. 

Whenever  the  Board  of  Directors  may  so  order,  the  offices  of  Secretary  and 
Treasurer  may  be  held  by  the  same  person. 

The  said  officers  shall  perform  such  additional  or  different  duties  as  shall  from 
time  to  time  be  imposed  or  required  by  the  Board  of  Directors,  or  as  may  be  pre- 
scribed from  time  to  time  by  the  By-Laws. 

Article  VI.  Only  persons  holding  stock  according  to  the  regulations  of  the 
corporation  shall  be  members  of  it. 

Article  VII.  These  articles  may  be  amended  by  resolution  setting  forth  such 
amendment  or  amendments,  adopted  at  any  meeting  of  the  stockholders  by  a  vote 
of  at  least  two-thirds  of  all  the  stock  of  said  corporation  then  outstanding. 

Article  VIII.    The  existence  of  this  corporation  shall  be  years  (or 

perpetual). 

742 


FORMS    AND    PRECEDENTS. 

Article  IX.    (Any  other  provisions  for  the  regulation  of  the  internal  affairs  of 
the  corporation  not  inconsistent  with  law  may  be  inserted.) 

In  Witness  Whereof,  we  have  hereunto  set  our  hands,  this  day  of 

,  A.  D.  190  . 


Signed  in  presence  of 


State  of  Wisconsin,     ") 
County  of  ) 

Personally  came  before  me  this  day  of  ,  A.  D.  190  ,  the 

above  named  ,  to  me  known  to  be  the  persons  who  executed  the 

foregoing  instrument,  and  acknowledged  the  same. 

,  Notary  Public,  Wisconsin. 
State  of  Wisconsin,     ? 
County  of  \ 

and  ,  being  each  duly  sworn,  doth  each  for  himself  de- 

pose and  say  that  he  is  one  of  the  original  signers  of  the  above  declaration  and  arti- 
cles ;  that  the  above  and  foregoing  is  a  true,  correct,  and  complete  copy  of  such 
original  declaration  and  articles,  and  of  the  whole  thereof.  Subscribed  and  sworn 
to  before  me,  this  day  of  ,  A.  D.  190  . 

Notary  Public. 


WYOMING-. 
CERTIFICATE  OF  INCORPORATION 

OF   THE 

Company. 

Know  all  Men  by  these  Presents  :  That  we,  the  undersigned,  citizens  of 
the  United  States,  over  the  age  of  twenty-one  years,  desiring  to  aid  in  the  indus- 
trial (or  productive)  interests  of  the  country,  do  by  these  presents  voluntarily  asso- 
ciate ourselves  together  for  the  purpose  of  forming  a  corporation,  under  the  laws  of 
the  State  of  Wyoming. 

And  we  hereby  certify : 

First.  That  the  corporate  name  of  our  said  corporation  is  and  shall  be  the 
Company. 

Second-  That  the  object  for  which  our  said  corporation  or  Company  is  formed 
is  (here  state  object,  confining  same  to  one  general  line  or  department). 

Third.    The  capital  stock  of  our  said  Company  shall  be  dollars,  to  be 

divided  into  shares  of  the  par  value  of  dollars  each  and  non- 

assessable. (If  preferred  stock  is  to  be  issued,  provision  therefor  must  be  inserted 
at  this  point.) 

Fourth.  The  term  of  existence  of  our  said  Company  shall  be  (not  exceeding 
fifty  years),  from  and  alter  the  date  of  this  certificate. 

Fifth.  The  affairs  and  management  of  our  said  Company  shall  be  under  the 
control  of  trustees  (not  less  than  three,  nor  more  than  nine),  and 

are  hereby  selected  and  appointed  to  act  as  such  trustees,  and  to 
manage  the  affairs  and  concerns  of  our  said  Company  for  the  first  year  of  its  exist- 
ence, and  until  their  successors  are  elected  and  qualified  according  to  law  and  the 
by-laws  of  our  said  Company. 

Sixth.    The  name  of  the  town  in  which  the  operations  of  our  said  Company 

shall  be  carried  on  is  the  City  of  ,  County  of  ,  and  State  of 

(if  the  Company  is  formed  for  the  purpose  of  carrying  on  any  part 

of  its  business  in  any  place  outside  of  the  State,  add:   "  and  the  said  business  IS  also 

formed  for  the  purpose  of  carrying  on  part  of  its  business  outside  of  the  State  of 

743 


INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS. 

Wyoming,  to  wit,  in  the  City  of  ,  County  of  ,  and  State  of  , 

and  elsewhere  in  the  United  States  as  the  trustees  of  our  said  Company  may  by 
resolution  or  otherwise  direct  "),  but  the  name  of  the  town  and  county  in  which 
the  principal  part  of  the  business  within  the  State  of  Wyoming  is  to  be  transacted 
is  the  City  of  ,  in  the  said  County  of  ,  at  which  place  its  principal 

office  and  place  of  business  shall  be  located. 

Seventh.  All  suits  against  our  6aid  Company  shall  be  commenced  in  the  said 
County  of 

In  Witness  Whereof,  we  have  executed  this  certificate  in  duplicate  this 
day  of  ,  A.  D.  19     . 

If  the  adoption  of  by-laws  is  to  be  delegated  to  the  trustees,  the  following  clause 
should  be  inserted:  The  trustees  of  our  said  Company  shall  have  the  exclusive 
power  to  make  such  prudential  by-laws  as  they  may  deem  proper  for  the  manage- 
ment and  disposition  of  the  stock  and  business  affairs  of  our  said  Company,  not  in- 
consistent with  the  laws  of  the  State,  prescribing  the  duties  of  officers,  artificers,  and 
servants  that  may  be  employed,  for  the  appointment  of  all  officers,  and  for  carrying 
on  all  kinds  of  business  within  the  objects  and  purposes  of  our  said  Company. 

(l.  s.) 

(L.  S.) 
(L.  S.) 

Witnesses : 

State  of  Wyoming,      ?  sg> 
County  of  J 

I,  ,  a  Notary  Public  in  and  for  the  said  County  and  State,  do 

hereby  certify  that  ,  who  are  personally  known  to  me  to  be  the  same 

persons  whose  names  are  subscribed  to  the  foregoing  instrument,  appeared  before 
me  this  day  in  person,  and  each  separately  acknowledged  that  he  signed,  sealed, 
and  delivered  the  said  instrument  as  his  free  and  voluntary  act,  for  the  uses  and 
purposes  therein  set  forth. 

My  commission  expires 

Given  under  my  hand  and  notarial  seal  this  day  of  ,  A.  D.  190  . 

,  Notary  Public. 


744 


FORMS   AND    PRECEDENTS. 


FOREIGN   CORPORATIONS. 


FORMS  FOR  SECURING  PERMITS  TO  TRANSACT  BUSI- 
NESS AS  A  FOREIGN  CORPORATION  IN  THE  SEVERAL 
STATES   AND   TERRITORIES. 

(A)    GENERAL   FORMS. 

FORM  1.  —  FORM  FOR  CERTIFIED  COPY  OF  INCORPORATION  ACT. 

United  States  of  America. 

State  of 
Office  of  the  Secretary  of  State. 

I,  ,  Secretary  of  State  of  the  State  of  ,  do  hereby  certify 

that  the  foregoing  printed  pamphlet,  pages  to  _      inclusive,  con- 

tains the  existing  laws  of  the  State  of  relative  to  incorporation  and 

powers  of  industrial  corporations  in  force  in  the  State  of  on  the 

day  of  190  ,  and  now  in  force  and  effect  in  said  State  of 

Li  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused  the  great  seal  of 
the  State  of  to  be  affixed  at  ,  the  capital,  this  day 

of  ,  190     . 


(great  seal.) 

FORM  2.  -  FORM  FOR  CERTIFIED  COPY  OF  CERTIFICATES  OF 
INCORPORATION. 

State  of 
Office  of  Secretary  of  State. 
I,  ,  Secretary  of  State  of  the  State  of  ,  do  hereby  certify 

that  the  above  and  foregoing  is  a  true  and  correct  copy  of  the  certificate  of  incor- 
poration of  the  Company,  as  received  and  filed  in  this  office  the 
day  of                          ,  190     . 

"  In  Testimony  Whereof,  I  have  hereunto  set  my  hand  and  official  seal  at 
this  day  of  ,  190     . 

,  Secretary  of  State. 

(seal  of  state.) 

FORM  3  —CERTIFICATE   TO   BE   ATTACHED   TO   CERTIFIED   COPY 

OF  BY-LAWS. 

T,  ,  Secretary  of  the  Company,  hereby  certify  thai   tin- 

copy   of  the  by-laws  above  set   forth  is  a  full  ami    true,  copy   of  the   lis  laws  of 

said"  Company  aa  adopted  by  the  stockholders  of  said  (' panj  at  a 

meeting  thereof  duly  held  oil  the  day  of  ,  190  ,  and  that  the 

746 


INCORPORATION    AND    ORGANIZATION    OP    CORPORATIONS. 

same  has  been  taken  from  and  compared  by  me  with  the  original   by-laws   as 
recorded  in  the  minute  book  of  the  said  Company. 

Witness  my  hand  and  the  seal  of  the  Company  this  day  of  , 

190     . 

,  Secretary. 

FORM  4.  — RESOLUTION  RELATIVE  TO  SECURING  PERMIT  TO 
TRANSACT  BUSINESS  IN  A  FOREIGN  STATE. 

At  a  special  meeting  of  the  Board  of  Directors  of  the  Company, 

held  at  on  the  day  of  ,  190     ,  the  following 

resolution  was  adopted : 

Be  it  Resolved,  that  a  certified  copy  of  the  certificate  of  incorporation  of  the 
above  named  Corporation  be  filed  with  the   Secretary  of  State  of  the  State   of 
,  with  the  request  that  a  certificate  be  forthwith  issued  permitting 
said  Company  to  transact  business  within  the  State  of 

and  be  it  further 

Resolved,  that  the  proper  officers  of  this  Corporation  be  and  they  hereby  are 
authorized  and  instructed  to  do  any  and  all  things  necessary  to  carry  out  the 
provisions  of  this  resolution  and  to  secure  the  necessary  permit  for  said  Company 
to  transact  business  as  a  foreign  corporation  within  the  State  of 

FORM  5.  — POWER  OF  ATTORNEY  APPOINTING  A  RESIDENT 

AGENT. 

Know  all   Men  by  these   Presents  :   That   the  Company,  a 

corporation   duly   organized   under   aud   by  virtue  of  the   laws   of  the   State  of 
,    has   made,  constituted,    and   appointed,  and   does   hereby  make, 
constitute,  and  appoint  ,  a  citizen  of  the  United  States  and  a  citi- 

zen and   resident   of  the    State  of  ,    residing  at  No.  Street 

in   the   City   of  in   said   State   of  ,   whose   place   of 

business  is  No.  Street  in  said  city,  its  true  and  lawful  attorney  in  fact 

and  authorized  agent  for  it  and  in  its  name,  place,  aud  stead  to  make  and  accept 
service  of  all  process  and  summons  in  any  action,  suit,  or  proceeding  in  any  of  the 
courts  of  the  State  of  ,  or  in  the  United  States  courts  therein,  and 

upon  whom  process  and  summons  may  be  served  with  the  same  effect  as  though 
the  Company  existed  in  the  State  of  ,  requisite  and  necessary  to  give 

competent  and  complete  jurisdiction  of  the  said  Company  to  any  oi 

the  said  courts ; 

Giving  and  Granting  unto  the  said  full  power  and  authority  to 

do  and  perform  every  act  and  thing  necessary  and  requisite  to  be  dona  in  and  about 
the  premises  as  fully  to  all  intents  and  purposes  as  said  Company 

might  or  could  do  if  personally  present,  hereby  revoking  and  confirming  all  that 
the  said  shall  lawfully  do  or  cause  to  be  done  by  this  power  granted 

to  him. 

This  power  is  irrevocable  except  by  substitution  of  another  qualified  person 
for  the  one  hereby  appointed  attorney  in  fact. 

In  Witness  Whereof,  said  Corporation,  in  pursuance  of  resolution  duly  adopted 
by  its  Board  of  Directors,  has  caused  this  instrument  to  be  executed  in  its  name 
by  its  President  and  Secretary  and  its  corporate  seal  to  be  hereunto  affixed  at  the 
city  of  ,  State  of  ,  this  day  of  ,  190     . 

Company. 
By  ,  President. 

Attest:  ,  Secretary. 

State  of  ) 

County  of  \ 

This  certifies  that  on  the  day  of  ,  before  the  under- 

signed, a  Notary  Public  in  and  for  said  county  and  State,  personally  appeared  the 
746 


FORMS   AND    PRECEDENTS. 

above  named  ,  the  President,  and  ,  the  Secretary,  of  the 

Company,  the  Corporation  mentioned  in  and  which  executed  the  fore- 
going power  of  attorney,  and  acknowledged  that  they  executed  the  same  by  the 
authority  and  on  behalf  of  said  Company,  pursuant  to  a  resolution 

of  the  Board  of  Directors  of  said  Corporation  duly  adopted  on  the  day 

of  ,  190     ,  and  ,  the  Secretary  of  said  Company,  further 

acknowledged   that   the   corporate   seal    hereuntobefore"  attached    and   impressed 
herein  is  the  corporate  seal  of  said  corporation  and  was  affixed  thereto  by  him. 

In    Testimony  Whereof,  I  have   hereunto  set   mv  hand   and   notarial   seal  this 
day  of  ,  190     . 

FORM  6— .GENERAL    FORM    FOR    APPLICATION  BY  FOREIGN 

CORPORATION  TO  TRANSACT  BUSINESS  IN  A 

FOREIGN  STATE. 

To  the  Secretary  of  State  of  the  State  of 
State  of 
County  of 

,  President,  and  ,  Secretary,  each  of  lawful  age,  being 

duly  sworn,  upon  their  oaths  state  that  they  make  this  affidavit  for  the  purpose  of 
complying  with  (here  insert  reference  to  the  statute  governing  the 

admission  of  foreign  corporations  to  transact  business  in  the  foreign  State). 

That  they  are  respectively  President  and  Secretary  of  ,  a  Corporation 

duly  incorporated  under  the  laws  of  the  State  of  on  the 

day  of  ,  190     ,  for  a  term  of  years. 

That  the  business  said  Corporation  proposes  to  pursue  under  its  charter  in  the 
State  of  is  as  follows  : 

That  the  amount  of  capital  stock  of  said  Corporation  is  dollars, 

and  the  proportion  of  the  capital  stock  of  said  Corporation  which  is  represented 
by  the  property  located  and  business  transacted  in  the  State  of  is 

(express  in  fraction,  one-half,  etc.,  as  the  case  may  be)  thereof,  and  the 
amount  of  the  said  capital  stock  so  represented  in  the  State  of  is 

dollars. 

(That  said  Corporation  is  transacting,  or  intends  to  transact,  business  in  the 
following  counties  in  said  State  of  :  .) 

That  the  amount  paid  in  upon  its  capital  stock  is  as  follows  : 

That  the  property  and  assets  and  the  estimated  value  thereof  that  will  be  em- 
ployed in  the  business  of  said  Corporation  in  the  State  of  is  as 
follows  -. 

That  the  disposition  made  of  capital  stock  subscribed  for,  and  not  paid  in,  is 
as  follows : 

That  the  officers  and  directors  of  said  Corporation  are  as  follows  : 

Name.  Residence,  Town,  Street,  and  Number. 

President, 
Secretary, 
Treasurer, 
Directors, 

That  the  names  and  residences  of  all  of  the  stockholders  as  shown  by  the 
records  are  as  follows: 

Names.  Residences. 

That  the  principal  office  in  is  at                        Street  in  the  city 

of                       ,  State  of  .    That  the  name  of  the  attorney  in  tact 

upon  whom  service   can   be   had  in  all  suits  commenced   in   the   said    State   ia 

,  and  his  address  is  Street  in  the  city  of 

,  President. 
,  Secretary, 

747 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

INDIVIDUAL  ACKNOWLEDGMENT. 

State  of  >  ss 

County,  f 
On  this  day  of  ,  A.  D.  190     ,  personally  appeared  before  me,, 

a  Notary  Public  in  and  for  said  county  in  said  State,  and  , 

■who  are  respectively  President  and  Secretary  of  the  above  described  Corporation, 
and  made  oath  that  the  foregoing  statement  by  them  subscribed  is  true  in  substance 
and  in  fact. 

,  Notary  Public. 

CORPORATION  ACKNOWLEEGMENT. 

State  of  >  ss 

County  of  £ 

I  (here  give  name  of  officer  and  his  official  title)  do  hereby  certify  that  , 

the  President,  and  ,  the  Secretary,  of  the  Company,  above 

named,  who  are  personally  known  to  me  to  be  the  same  persons  whose  names  are 
subscribed  to  the  foregoing  instrument  as  such  President  and  Secretary,  as  having 
executed   the  said   instrument  on  behalf  of  the  said  Company, 

appeared  before  me  this  day  in  person,  and  acknowledged  that  they  signed  and 
affixed  the  corporate  seal  of  said  Corporation  to  said  instrument,  and  delivered  the 
same  freely  and  voluntarily  as  the  act  and  deed  of  the  said  Company  for 

the  uses  and  purposes  therein  set  forth. 

Given  under  my  hand  and  official  seal  this  day  of  ,  A.  D.  190     . 

ATTORNEY'S   CERTIFICATE  AS  TO   DUE   ORGANIZATION. 

State  of  7  sg> 

County  of  \ 

,  having  first  been  duly  sworn,  on  oath  says  :  that  he  resides  in 
the  city  of  ,  State  of  ;  that  he  is  a  duly  qualified  and 

practising  attorney  of  the  State  of  ,  and  has  an  office  for  the  trans- 

action of  his  law  business  at  No.  Street  in  said  City  of  , 

State  of 

Affiant  further  says  that  the  certificate  of  incorporation,  minutes,  and  by-laws  of 
the  Company  hereto  attached,  constitute  the  legal  organization  of 

the  said  Company  under  the  laws  of  the  State  of  , 

U.  S.  A. 

Affiant  further  declares  and  certifies  that  said  Company  has  been 

duly  and  legally  organized  under  and  according  to  the  laws  of  the  said  State  of 
in  such  case  made  and  provided. 

Subscribed  and  sworn  to  before  me  this  18th  day  of  December,  1907= 


CERTIFICATE  OF  CORPORATE   OFFICERS  AS  TO  ORGANIZATION 
MINUTES  AND  BY-LAWS. 

State  of  )  gs 

County  of  J 

and  ,  having  first  been  duly  sworn,  on  oath  say 

that  they  are.  respectively  the  President  and  Secretary  of  the  Com- 

pany, a  corporation  organized  and  existing  under  the  laws  of  the  State  of  _        , 

U.  S.  A.,  and  that  they  are  fully  cognizant  of  all  matters  connected  with  the  incor- 
poration and  organization  of  said  Company. 

748 


FORMS    AND    PRECEDENTS. 

Affiants  further  say  that  the  copy  of  the  minutes  hereto  attached,  marked  "  Ex- 
hibit A,"  is  a  true  and  correct  copy  of  the  minutes  of  the  organization  meeting  of 
said  Company  duly  held  and  convened  according  to  the  laws  of  the  said  ;State  of 

,  on  the  day  of  December,  190     ,  at    Room  No.       , 

Street,  in  the  city  of  ,  State  of  ,  U.  S.  A. 

Affiants  further  say  that  the  by-laws  hereto  attached  marked  "  Exhibit  B"  are  a 
true  and  correct  copy  of  the  by-laws  of  said  Company  duly  adopted  at  the  organi- 
sation meeting  of  said  Company  held  at  Room      ,  Street,  in  the  city  of 
,  State  of                    ,  U.  S.  A.,  on  the  day  of  December, 
190     . 

Affiants  further  say  that  the  copy  of  the  minutes  hereto  attached  marked  "  Ex- 
hibit C  "  is  a  true  and  correct  copy  of  the  minutes  of  the  first  meeting  of  the  Board 
of  Directors  of  said  Company  duly  held  and  convened  according  to  the  laws  of  the 
State  of  ,  on  the  day  of  December,  190     ,  at  Room      , 

Street,  in  the  city  of  ,  State  of  ,  U.  S.  A. 

Affiants  further  say  that  the  said  meeting  above  referred  to  (a  copy  of  the 
minutes  of  which  is  hereto  attached  marked  "  Exhibit  A  ")  was  the  first,  only,  and 
last  meeting  of  the  incorporators  and  stockholders  of  the  Company 

held  since  the  filing  of  its  articles  of  incorporation  in  the  office  of  the  Secretary 
of  State  in  and  for  the  State  of  on  the  day  of  ,  190     . 

,  President. 
,  Secretary. 

Subscribed  and  sworn  to  before  me  this  day  of  ,  190     . 


Notary  Public,  County, 


(B)   SPECIAL   FORMS   FOR  PARTICULAR  STATES. 

ALABAMA. 

CERTIFICATE  DESIGNATING  AGENT  AND  PLACE  OF  BUSINESS  IN 

ALABAMA,  FOR  FILING  IN  OFFICE  OF  SECRETARY  OF 

STATE  OF  ALABAMA. 

Office  of 
Located  at 

In  compliance  with  the  provisions  of  section  1316  of  the  Code  of  Alabama,  1896, 
and  section  232  of  the  Constitution  of  Alabama,  1901,  ,  a  corporation  or 

association  organized  under  the  laws  of  the  State  of  ,  and  having  its 

principal  place  of  business  at  ,  in  the  city  of  ,  State  of  , 

herewith  files  a  certified  copy  of  its  articles  of  incorporation  or  association  under  the 
laws  of  said  State  of  ,  and  designates  as  its  known  place  of  business  in 

the  State  of  Alabama,  ,  in  the  city  of  ,  County  of 

and  as  its  authorized  agent  thereat,  ,  on  whom,  as  such  agent,  service  of 

process  may  be  made  ami  all  legal  notices  served,  for  all  the  purposes  contemplated 
by  the  laws  of  the  State  of  Alabama. 

In  Witness  Whereof,  the  said  corporation  or  association  has  caused  these  presents 
to  be  signed  by  its  President  and  Secretary,  and  attested  by  its  corporate  seal,  at  its 
office  in  ,  this  day  of  ,  190     . 

,  President. 

,  Sec ret 'dry . 

CERTIFICATE  TO  BE  FILED  WITH  THE  STATE   AUDITOR. 

To  the  Statk  Auditor  of  Axa3a.ua:  The  ,  a  Corporation  organized 

under  the  laws  of  ,  being  desirous  of  entering  the  State  of  Alabama  for  the 

transaction  of  business  therein,  files  the  following  statement  under  an  Act  approved 

7  1'.' 


INCORPORATION    AND    ORGANIZATION   OF   CORPORATIONS. 

March  7,  1907,  entitled  An  Act  to  amend  sections  1321  and  1322  of  the  Code  of 
1896. 

That  the  name  of  the  Corporation  is  ,  that  it  was  incorporated  under 

the  laws  of  ,  that  its  principal  place  of  business  is  ,  that  its 

principal  place  of  business  in  Alabama  is  ,  that  the  name  of  its  authorized 

agent  thereat  is  ,  whose  post-office  address  is  ,  that  the  amount 

of  the  total  authorized  capital  is  $  ,  that  the  amount  of  the  actual  paid 

in  capital  is  f>  ,  and  that  the  actual  amount  of  capital  employed  or  to  be 

employed  in  the  State  of  Alabama  is  S 

The  foregoing  statement  is  rendered  by  the  President  and  Secretary  of  said 
Corporation  and  signed  by  them  respectively  under  oath,  with  the  corporate  seal 
attached. 

,  President. 
,  Secretary. 

Sworn  to  and  subscribed  before  me  this  day  of  ,  190     ,  as 

witness  my  seal  of  office. 


CORPORATION  ACKNOWLEDGMENT. 

State  of  >  gs 

County  of  \ 

I  (name  and  title  of  officer),  for  said  county,  in  said  State,  hereby  certify  that 
A.  B.,  as  President,  and  C.  D.,  as  Secretary,  of  (name  of  Corporation),  whose  names 
are  signed  to  the  foregoing  conveyance,  and  who  are  known  to  me  to  be  the  Presi- 
dent and  Secretary  of  said  (name  of  Corporation),  acknowledged  before  me  on  this 
day  that,  being  informed  of  the  contents  of  the  conveyance,  they  executed  the  same 
voluntarily  as  the  act  and  deed  of  said  (name  of  Corporation),  on  the  day  the  same 
bears  date. 

Given  under  my  hand  this  day  of  ,  A.  D.  18 


ARIZONA. 
APPOINTMENT   OF  AGENT. 
The Company. 

Know  all  Men  by  these  Presents  :  That  the  Company,  a  cor- 

poration organized  under  the  laws  of  Arizona,  has,  at  a  regularly  held  meeting  of 
the  of  the  said  Corporation,  by  resolution  properly  carried  and  spread 

upon  the  minutes  of  said  meeting,  authorized  and  empowered  and  does  by  these 
presents  authorize  and  empower  of  Phoenix,  Arizona,  who  for  more  than 

three  years  last  past  has  been  a  bona  fide  resident  of  Arizona,  for  and  in  behalf  of 
said  Company,  to  accept  and  acknowledge  service  of,  and  upon  whom  may  be  served 
all  notices  or  processes  or  summons  in  any  action,  suit,  or  proceeding  that  may  be 
had  or  brought  against  the  said  Company  in  any  of  the  courts  of  Arizona,  such 
service  of  process  or  notice,  or  the  acceptance  thereof  by  said  agent  endorsed  thereon, 
to  have  the  same  force  as  if  served  personally  upon  the  Corporation  or  the  President 
and  Secretary  thereof,  the  said  Corporation  hereby  revoking  any  power  of  attorney 
or  appointment  of  agent  heretofore  made  by  it  for  the  purpose  designated  above. 

Witness  the  signature  of  the  President  and  Secretary  of  said  Company  this 
day  of  ,  190    . 

Company. 
By  ,  President. 

Attest :  Secretary. 

750 


FORMS    AND    PRECEDENTS. 


FORM  FOR  CORPORATION  ACKNOWLEDGMENT. 

State  of  I  ss 

County  of  y 

Before  me  (here  insert  name  and  character  of  officer)  the  Company, 

by  its  President,  ,  known  to  riie  to  be  the  person  whose  name  is  subscribed 

to  the  foregoing  instrument  as  President  of  said  Company,  and  who  acknowledged 
to  me  that  he  executed  the  same  as  such  President,  for  the  purposes  and  considera- 
tion therein  expressed. 

Given  under  my  hand  and  seal  ot  office  this  day  of  ,  A.  D. 

[seal.] 

ARKANSAS. 

CERTIFICATE  OF  FOREIGN  CORPORATION.     NAMING  AN   AGENT 
UPON  WHOM  SUMMONS  MAY  BE  SERVED. 

Know  all  Men  by  these  Presents:  That  the  ,  a  Corporation 

duly  organized,  created,  and  existing  under  and  by  virtue  of  the  laws  of  the  State 
of  ,  and  having  its  principal  office  or  place  of  business  in  the  City  of 

in  said  State,  does  hereby  designate  and  appoint  ,  residing  in  the 

Citv  of  in  the  State  of  Arkansas,  he  being  a  citizen  of  said  State,  as 

its  agent  for  the  said  State  of  Arkansas,  upon  whom  service  of  summons  and  all 
other  legal  process  may  be  had  and  made  in  all  actions  or  proceedings  against  said 
Corporation  in  any  of  the  courts  of  said  State  of  Arkansas,  accordiug  to  the  provi- 
sions of  an  act  of  the  General  Assembly  of  the  State  of  Arkansas,  entitled  "  An 
Act  to  prescribe  the  conditions  upon  which  Foreign  Corporations  may  do  business 
in  this  State,"  approved  on  the  sixteenth  day  of  February,  1S99. 

The  said  Corporation  hereby  designates  the  City  of  in  the  said  State 

of  Arkansas  as  its  principal  place  of  business  in  said  State. 

In  Testimony  Whereof,  The  said  Corporation  has,  by  its  President,  caused  these 
presents  to  be  signed  and  sealed  with  its  corporate  seal  at  the  City  of  in 

the  State  of  on  this  day  of  ,  190     . 

By  ,  President. 

ACKNOWLEDGMENT  BY  CORPORATION. 

State  of  ) 

County  of  \  ' 

Be  it  remembered,  that  on  this  day  of  ,  A.  D.  18     ,  before  the  un- 

dersigned (name  and  title  of  officer),  within  and  for  the  county  aforesaid,  duly 
commissioned  and  acting,  appeared  in  person  A.  B.,  as  President  (or  other  officer, 
as  the  case  may  be)  "f  (name  of  Corporation),  to  me  personally  well  known  as  the 
person  whose  name  appears  upon  the  foregoing  instrument  as  the  party  grantor,  and 
stated  that  he  had  exeeutcd  the  same  for  the  consideration  and  purposes  therein 
mentioned,  and  1  do  hereby  so  certify. 

///  Testimony  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal, 
on  this  day  of  ,  A.  D.  18     . 

FORM  FOR  USE  OF  FOREIGN  CORPORATION. 

We,  ,  as  President,  and  ,  as  Secretary,  of  the 

a  Corporation  organized  under  the  laws  of  ,  and  having  its  principal 

office  or  place  of  business  at  No.  Street,  in  the  City  of  ,  in 

the  State  of  ,  hereby  certify  that  the  Charter  and  Articles  of  incor- 

ion  of  said  ,  together  with  all  amendments  thereto  duly  authen- 

ticated and  certified  by  the  proper  authority,  is  herewith  filed  with  the  Secretary 
of   State    of   the    State    of   Arkansas;    and    further,    the  said  has    assets 

751 


INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS. 

of  $  ,  and  liabilities  of  $  ,  and  that  the  amount  of  its  capital 

employed  in  Arkansas  is  $  ,  and  its  general  office  or  place  of  business  in 

Arkansas  is  ;  and  of  is  hereby  appointed  as  agent,  upon 

whom  process  may  be  served. 

Each  of  us  further  certify  that  the  following  is  a  true  and  correct  copy  of  a 
resolution  adopted  by  the  Board  of  Directors  of  ,  on  the  day 

of  ,  190     : 

"  Be  it  Resolved,  that  service  of  process  upon  any  agent  of  in  the 

State  of  Arkansas,  or  upon  the  Secretary  of  State,  in  any  action  brought  or  pending 
in  said  State,  shall  be  valid  service  upon  this  Company." 

"Be  it  further  Resolved,  that  the  President  and  Secretary  certify  to  a  copy 
of  this  resolution  and  file  the  same  with  the  Secretary  of  State  of  the  State  of 
Arkansas." 

Witness  our  hands  this  day  of  ,190     . 

,  as  President  of 
,  as  Secretary  of 

Subscribed  and  sworn  to  before  me  by  each  of  the  persons  who  have  signed 
their  names  hereto,  this  day  of  ,  190     . 

,  Notary  Public. 


CALIFORNIA. 
DESIGNATION  OF  AGENT. 

Know  all  Men  by  these  Presents  :  That  pursuant  to  sections  405  and 
406  of  the  Civil  Code  of  the  State  of  California,  relating  to  Foreign  Corporations, 
the  ,  a  Corporation  formed  under  the  laws  of  ,  and  carrying 

on  the  business  of  in  the  State  of  California,  has  constituted,  appointed, 

and  designated,  and  by  these  presents  does  constitute,  appoint,  and  designate,  in 
accordance  with  a  resolution  duly  adopted  at  a  meeting  of  the  Board  of  Directors 
of  said  Corporation,  held  on  the  day  of  ,  A.  D.  19     ,  , 

residing  in  the  City  of  ,  State  oi  California,  its  General  Agent. 

That  said  ,  so  designated  as  aforesaid,  is  the  agent  of  the  said  Com- 

pany in  the  State  of  California,  upon  whom  process,  issued  by  authority  by  or 
under  any  law  of  said  State  of  California,  may  be  served. 

In  Witness  Whereof,  The  said  Company  has  to  these  presents  affixed  its  Corpo- 
rate Seal,  and  caused  the  same  to  be  subscribed  by  its  President  and  attested  by 
its  Secretary,  this  day  of  ,  A.  D.  19     . 

Attest : 

,  Secretary. 
,  President. 


FORM  FOR  CORPORATION   ACKNOWLEDGMENT. 


State  of  California, } 
County  of  ) 

On  this  day  of  in  the  year  one  thousand  nine  hundred  and  , 

before  me  (here  insert  name  and  quality  of  officer)  personally  appeared 
known  to  me  (or  proved  to  me  on  the  oath  of  )  to  be  the  President  (or  the 

Secretary)  of  the  corporation  that  executed  the  within  instrument,  and  acknowl- 
edged to  me  that  such  corporation  executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal 
the  day  and  year  in  this  certificate  first  above  written. 

(l."s-)  (Signature  and  quality  of  officer.) 

752 


FORMS    AND    PRECEDENTS. 

COLORADO. 

CERTIFICATE  OF  BUSINESS  AND  AGENT. 

Know  all  Men  by  these  Presents  :   That  we,  ,  President,  and 

,  Secretary,  of  the  ,  a  Corporation  duly  organized  under 

and  by  virtue  of  the  laws  of  the  State  of  ,  do  hereby  certify  that  the 

principal  place  where  the  business  of  said  Corporation  is  to  be  carried  on  in  the 
State  of  Colorado  is  the  County  of  ,  and  we  hereby  designate,    con- 

stitute, and  appoint  ,  residing  in  the   city  of  ,  County  of 

and  State  aforesaid,  the  duly  authorized  agent  of  said  Corporation, 
upon  whom  process  may  be  served,  pursuant  to  the  statute  in  such  case  made  and 
provided. 

Given  under  our  hands  and  the  seal  of  the  said  Corporation,  at  their  office  in 
and   State   of  on  this  day   of  , 

A.  D.  190     . 

,  President. 
,  Secretary. 
State  of  )  ss 

County  X)f  £ 

I  ,  a  Notary  Public  within  and  for  the  County  and  State  aforesaid, 

do  hereby  certify  that  President,  and  ,  Secretary,  of  the  , 

who  are  personally  known  to  me  to  be  the  persons  who  subscribed  the  above 
and  foregoing  instrument  in  writing,  and  acknowledged  that  they  signed,  sealed, 
and  delivered  the  same  as  their  free  and  voluntary  act  and  deed,  for  the  uses  and 
purposes  therein  set  forth. 

Given  under  my  hand   and   notarial   seal,    this  day   of  , 

A.  D.  190     . 

My  commission  expires  ,  A.  D.  190     . 

,  Notary  Public. 

FORM  FOR  CORPORATE  ACKNOWLEDGMENT. 

State  of  Colorado,  f 
County  of  \ 

I,  ,  a  Notary  Public,  in  and  for  said  county,  in  the  State  aforesaid,  do 

hereby  certify  that  ,  President,  and  ,  Secretary,  of  The 

Company,  who  are  personally  known  to  me  to  be  such  President  and  Secretary,  and 
who  are  personally  known  to  me  to  be  the  same  persons  who  executed  the  within 
instrument  in  writing  on  behalf  of  the  Company,  appeared  before  me  this 

day  in  person  and  acknowledged  that  they  signed,  sealed,  and  delivered  the  said 
instrument  as  their  free  and  voluntary  act  of  said  Company  for  the  uses  and 
purposes  therein  specified. 

Given  under  my  hand  and  notarial  seal  this  day  of  ,  A.  D. 

19     . 

(seal.)  (Signature)  Notary  Public. 

CONNECTICUT. 

Know   all  Men   by   these    Presents  :  That  ,  a  Corporation  duly 

organized  under  the  laws  of  the  State  of  ,  and  located  and  doing  business 

at  ,  acting  herein  by  its  ,  duly  authorized   thereunto,   bj   these 

presents  makes,  ordains,  constitutes,  and  appoints  the  Secretary  of  the  State  <>f 
Connecticut,  and  his  successor  in  office,  its  true  and  lawful  attorney,  upon  whom 
all  lawful  process  in  any  action  or  proceeding  against  the  said  Corporation,  in  the 
State  of  Connecticut,  including  the  process  of  foreign  attachment,  may  be  Berved. 

753 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS. 

And  said  Corporation  hereby  agrees  that  any  lawful  process  against  it  which  is 
served  on  said  attorney,  shall  be  of  the  same  legal  force  and  validity  as  if  served  on 
the  Corporation,  and  that  said  appointment  shall  continue  in  force  as  long  as  any 
liability  remains  outstanding  against  it  in  this  State. 

In  Witness  Whereof,  the  said  Corporation  has  caused  its  corporate  name  and  seal 
to  be  hereto  affixed  by  *  its  *  thereunto  duly  authorized  this 

day  of  ,  190     . 

State  of  >  190     . 

County  of  > 

Personally  appeared  *  of  said  Corporation,  signer  and  sealer  of  the 

above  instrument,  he  being  thereunto  duly  authorized  by  the  Corporation  above 
named,  and  acknowledged  the  same  to  be  his  free  act  and  deed,  and  the  free  act 
and  deed  of  said  Corporation,  before  me, 

,  Notary  Public. 

Fee  for  Recording  in  Secretary's  Office,  $1.00. 

*  Insert  name  and  title  of  office. 

STATEMENT  BY  THE 

In  accordance  with  the  provisions  of  an  act  of  the  General  Assembly  of  the 
State  of  Connecticut,  entitled  "An  Act  concerning  corporations,"  being  chapter 
194  of  the  Public  Acts  of  1903,  The  ,  a  Corporation  organized  under  the 

laws  of  the  State  of  ,  does  hereby  certify  and  set  forth : 

First.   That  the  paper  hereto  attached  is  a  true  and  correct  copy  of  its  charter 
or  certificate   of  organization  filed   with  the  Secretary   of  State  of  the  State  of 
,  and  properly  certified  by  the  said  Secretary. 

Second.  The  total  amount  of  capital  stock  said  Company  is  authorized  to  issue 
is  dollars,  and  the  amount  actually  paid  in  is  dollars,  of  which 

amount  dollars  has  been  paid  in  in  cash,  and  dollars  has  been 

paid  as  follows  : 

Third.  The  character  of  the  business  which  said  Corporation  is  to  transact  in 
this  State  is 

Dated  at  ,  this  day  of  ,  190     . 

,  President. 
,  Treasurer. 


A  Majority 

of 
Directors. 


State  of  }  gs>  190 

County  of  > 

Personally  appeared  ,  President,  ,  Treasurer,  and  t 

a  majority  of  the  Directors  of  The  ,  and  made  oath  to  the  truth  of  the 

foregoing"  statement  by  them  subscribed,  before  me, 

,  Notary  Public. 

CERTIFICATE  OF  ACKNOWLEDGMENT  BY  CORPORATION. 

State  of 
County  of 

,  A.  D.  18  .  Then  and  there  before  me  (name  and  title  of  officer), 
within  and  for  the  County  and  State  aforesaid,  duly  commissioned  and  acting  as 
such,  personally  appeared  ,  agent  of  the  Company,   signer 

and  sealer  of  the  foregoing  instrument,  and  acknowledged  the  same  to  be  his  free 
act  and  deed,  and  the  free  act  and  deed  of  said  Company,  before  me. 

Witness  my  hand  and  seal  of  office,  on  this  day  of  ,  A.  D. 

18     . 

754: 


FORMS   AND    PRECEDENTS. 

DISTRICT   OF    COLUMBIA. 
APPOINTMENT    OF   RESIDENT   AGENT. 

Know  all  Men  by  these  Presents:  That  the  ,  a  Corporation  organ- 

ized under  the  laws  of  the  District  of  Columbia,  does  hereby  appoint  the 
Company,  of  Washington,  D.  C,  its  lawful  agent  in  and  for  the  District  of  Co- 
lumbia, for  and  in  behalf  of  said  Company,  to  accept  and  acknowledge  service  of, 
and  upon  whom  may  be  served,  all  necessary  process  or  processes  in  any  action, 
suit,  or  proceeding  that  may  be  had  or  brought  against  the  said  Company  in  any  of 
the  courts  of  said  District  of  Columbia,  such  service,  process,  or  notice,  or  the 
acceptance  thereof  by  said  agent  endorsed  thereon,  to  have  the  same  force,  and  effect 
as  if  served  upon  the  President  and  Secretary  of  said  Company,  the  said  Corpora- 
tion hereby  revoking  any  power  of  attorney  or  appointment  of  agent  heretofore 
made  by  it  for  the  purposes  designated. 

Witness  the  signature  of  the  President  and  Secretary  of  said  Company,  this 
day  of  ,  190    . 

,  President. 

,  Secretary. 
United  States  of  America. 

State  of ,  to  wit  : 

I,  ,  a  Notary  Public  in  and  for  the  State  aforesaid,  do  hereby  certify 

that  and  ,  parties  to  the  annexed  Certificate  of  Appointment, 

bearing  date  on  the  day  of  ,  190     ,  personally  appeared  before 

me  in  the  State  aforesaid,  the  said  and  ,  being  personally  known 

to  me  to  be  the  persons  who  made  and  signed  the  said  Certificate  and  severally 
acknowledged  the  same  to  be  their  act  and  deed  for  the  purposes  therein  set 
forth. 

Witness  my  hand  and  seal  this  day  of  ,  190     . 

,  Notary  Public. 

CORPORATION  ACKNOWLEDGMENT. 

State  of  >  gs 

County  of  > 

I  (name  and  title  of  officer),  in  and  for  the  County  of  and  State 

aforesaid,  do  hereby  certify  that  G.  H.,  to  whom  the  power  of  attorney  is  given  by 
the  party  grantor  in  a  certain  deed  of  indenture,  bearing  date  the 

dav  of  ,  in  the  year  of  our  Lord   one  thousand  nine  hundred  and 

,  and  hereto  annexed,  personally  appeared  before  me  in  my  county  afore- 
said, the  said  G.  H.,  being  personally  well  known  to  me  as  the  person  named  as 
the  attorney  in  the  said  deed,  and  the  said  G.  H.  did  acknowledge  the  same  to  be 
the  act  and  deed  of  the  (name  of  Corporation  in  full). 

Given  under  my  hand  and  official  seal,  this  day  of  ,  A.  D. 

18     . 

DELAWARE. 

Note.  —  Use  general  forms  numbered  1  to  10,  ante. 

ACKNOWLEDGMENT  BY  CORPORATION. 

State  of  j  ss 

County  of  \ 

Be  it  Remembered,  that  on  the  day  of  ,  A.  D.  18     ,  person- 

ally came  before  me  (name  and  title  of  officer)  ,  President  of  the 

Company,  a  corporation  of  the  State  of  Delaware,  party  to  the  foregoing  inden- 


INCORPORATION   AND   ORGANIZATION    OF   CORPORATIONS. 

ture,  known  to  me  personally  (or  proved  on  the  oath  of  the  witness)  to  be  such, 
and  acknowledged  the  said  indenture  to  be  his  act  and  deed,  and  the  act  and  deed 
of  the  said  Company ;  that  the  signature  of  the  said  President  is  his  own  proper 
handwriting ;  that  the  seal  affixed  is  the  common  or  corporate  seal  of  the  said  Com- 
pany ;  and  that  his  act  of  sealing,  executing,  and  delivering  said  indenture  was  duly 
authorized  by  resolution  of  the  directors  (or  trustees  or  other  managers)  of  said 
Company. 

Given  under  my  hand  and  official  seal  the  day  and  year  aforesaid. 

FLORIDA. 

Note.  —  Use  general  forms  numbered  1  to  10,  ante. 

CORPORATION  ACKNOWLEDGMENT. 

State  of  \ 

County  of  > 

On  this  day  of  ,  A.  D.  18     ,  before  me  (name  and  title  of 

officer),  personally  appeared  A.  B.,  President  (or  other  officer)  of  (name  of  Corpo- 
ration), to  me  known  to  be  the  person  described  in  and  who  executed  the  foregoing 
instrument,  and  acknowledged  the  execution  thereof  to  be  the  free  act  and  deed  of 
the  (name  of  Corporation),  for  the  uses  and  purposes  therein  mentioned. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal  (if 
the  officer  have  a  seal)  the  day  and  year  first  above  written. 

GEORGIA. 
CERTIFIED  STATEMENT  FOR  REGISTRATION 

BY 

Name  of  Corporation, 
Principal  Office, 
Nature  of  Business, 

When  By  what  Authority 

Incorporated.  Where  Incorporated.  Incorporated.  Capital  Stock. 

I  hereby  certify  that  the  above  statement  is  correct. 


CORPORATION  ACKNOWLEDGMENT. 

State  of  ? 

County  of  £ 

I,  ,  a  (here  insert  official  position)  in  and  for  the 

in  the  State  of  ,  residing  at  ,  do  hereby  certify  that  the 

foregoing  instrument  in  writing  was  executed  by  the  above  named  A.  B.,  as  Presi- 
dent of  the  (name  of  Corporation),  and  the  seal  of  said  Corporation  attached  thereto 
by  him  in  my  presence  on  the  day  of  ,  A.  D.  18     ,  in  due  form  of 

law. 

Witness  my  hand  and  official  seal,  this  the  day  of  ,  A.  D.  18     . 

Note.  —  This  blank  must  be  filled  out  and  returned  to  the  Secretary  of  State  annually, 
before  November  1st,  with  a  fee  of  one  dollar  for  first  return  and  fifty  cents  annually  there- 
After. 


756 


HAWAII. 

Note.  —  Use  general  forms  1  to  10,  ante. 


FORMS    AND    PRECEDENTS. 


IDAHO. 

State  of  I  gs 

County  of  | 

,  being  first  duly  sworn,  deposes  and  says  : 
That  he  is  (title  of  office)  of  (name  of  corporation,  joint-stock 

company,  or  association) 

That  the  principal  office  of  said  Company  is  located  at  ,  County  of 

,  State  of 
That  the  names  and  post-office  addresses  of  its  officers  are  as  follows : 

Name.  Post-Office  Address. 

President, 

Secretary, 

Treasurer, 

That  the  date  of  the  annual  election  of  directors  and  officers  of  said  (name  of 
Company)  is  the  day  of  of  each  year. 

That  the  amount  of  authorized  capital  stock  of  the  said  Company  is 
($  )  dollars,  which  is  divided  into  shares  of  the  par  value  of 

($  )  dollars  each;  that  the  amount  of  capital  stock  subscribed 

is  shares  ;  the  amount  of  capital  stock  issued  and  the  amount  of  capi- 

tal stock  paid  up  is  shares,  aggregating  dollars. 

And  that  the  names  and  addresses  of  the  said  Company's  Managing  Agent  and 
Attorneys  in  Fact  in  the  State  of  Idaho  are  as  follows : 

Name.  Office.  Post-Office  Address. 


Office : 

Subscribed  and  sworn  to  before  me  this  day  of  ,  190     . 

,  Notary  Public. 

DESIGNATION  OF  AGENT,   AND   ACCEPTANCE   OF  THE  PROVI- 
SIONS  OF  THE   CONSTITUTION  OF  THE  STATE   OF   IDAHO. 

Know  ail  Men  by  these  Presents:  That  ,  a  Corporation  or- 

ganized and  existing  under  the  laws  of  the  State  of  ,  having  Sled  in  I  be 

office  of  the  Secretary  of  State  of  the  State  of  Idaho  a  duly  authenticated  copy  of  its 
Articles  of  Incorporation,  does  hereby,  in  pursuance  of  the  laws  of  the  State;  of  Idaho, 
make  this  certificate,  and  does  hereby  designate  County,  in  the  State  of 

Idaho,  as  the  county  in  which  the  principal  place  of  business  of  said  Corporation  in 
said  State  of  Idaho  is  and  shall  be  conducted,  aud  docs  hereby  designate  , 

residing  at  fo  said  County,  as  the  Authorized  Agent 

of  said  Corporation  in  said  State  of  Idaho,  upon  whom  process  issued  by  authority 
of,  or  under  any  law  of  the  State  of  Idaho,  may  be  served,  as  provided  by  the  Con- 
stitution aud  laws  of  said  State  of  Idaho. 

And  the  said  ,  desiring  and  intending  to  conform  in  all  respects  to 

the  Constitution  and  laws  of  said  State,  and  to  avail  itself  of  the  rights,  privileges, 
and  immunities  guaranteed  by  said  Constitution  and  laws,  does  hereby  accept  the 
provisions  of  the  Constitution  of  the  State  of  Idaho  for  all  the  intents  and  purpi 
contemplated  by  the  provisions  thereof,  relating  to  such  acceptance  by  other  than 
municipal  corporations.     (Article  XL  section  7,  Constitution  of  Idaho.) 

In   Witness  Whereof,  the  said  lias  caused  this  Certificate  and 

Acceptance  to  be  executed,  acknowledged,  and  delivered  in  its  name  on  its  In  I 

by  its  President,  and   to  be  attested  by  its  Secretary,  ami    hath  caused   its  corporate 

seal  tobe  hereunto  affixed  at  in  the  County  of  and 

State  of  this  day  of  ,  190     . 

By  ,  "President* 

Attest: 

,  Secretary. 

757 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 


State  of  Idaho,  \ 
County  of         y 

On  this  day  of  in  the  year  190     ,  before  me  a 

in  aud  for  said  county,  in  the  State  aforesaid,  personally  appeared  ,  known 

to  me  to  be  the  President  of  the  Corporation  that  executed  the  within  and  foregoing 
instrument,  and  acknowledged  to  me  that  such  Corporation  executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  seal 

this  day  of  ,190    . 

My  commission  expires  on  the  day  of  ,  190     . 

Note.  —  Original  to  be  filed  for  record  with  the  Secretary  of  State,  Boise,  Idaho,  and 
duplicate  with  the  Clerk  of  the  District  Court  in  the  county"  where  the  principal  place  of 
business  is  located. 

ILLINOIS. 

AFFIDAVIT  OF  PRESIDENT  AND  SECRETARY. 

State  of  > 

County,  \ 

,  President,  and  ,  Secretary,  each  of  lawful  age,  being  duly 

sworn,  upon  their  oaths,  state  that  they  make  this  affidavit  for  the  purpose  of  com- 
plying with  An  Act  entitled  "  An  Act  to  regulate  the  admission  of  foreign  corpo- 
rations for  profit,  to  do  business  in  the  State  of  Illinois."  Approved  May  18, 1905. 
In  force  July  1,  1905. 

That  they  are  respectively  President  and  Secretary  of  ,  a  Corporation 

duly  incorporated  under  the  laws  of  the  State  of  on  the  day 

of  ,  19     ,  for  a  term  of  years. 

That  the  business  said  Corporation  proposes  to  pursue  under  its  charter  in  the 
State  of  Illinois  is  as  follows  : 

That  the  amount  of  capital  stock  of  said  Corporation  is  dollars  and 

the  proportion  of  the  capital  stock  of  said  Corporation  which  is  represented  by  the 
property  located  and  business  transacted  in  the  State  of  Illinois  is  (express 

in  fraction,  as  one-half,  one-fourth,  etc.,  as  the  case  may  be),  and  the  amount  of  the 
said  capital  stock,  so  represented  in  the  State  of  Illinois,  is  dollars;  That 

said  Corporation  is  transacting,  or  intends  to  transact,  business  in  the  following 
States  or  countries : 

That  the  amount  paid  in  upon  its  capital  stock  is  as  follows  : 
That  the  property  and  assets  and  the  estimated  value  thereof  that  will  be  em- 
ployed in  the  business  of  said  Corporation  in  the  State  of  Illinois  is  as  follows  : 

That  the  disposition  made  of  capital  stock  subscribed  for  and  not  paid  in,  is  as 
follows  : 

That  the  officers  and  directors  of  said  Corporation  are  as  follows  : 

Residence,  Town,  Street, 
Name.  and  Number. 

President  

Secretary  

Director  . 


That  the  names  and  residences  of  all  of  the  stockholders  as  shown  by  the  records 
are  as  follows : 

Names.  Residences. 

That  the  principal  office  in  Illinois  is  at  Street,  in  the  city  of 

758 


FORMS    AND    PRECEDENTS. 

Illinois.  That  the  name  of  the  attorney  in  fact  upon  whom  service  can  be  had  in 
all  suits  commenced  in  the  State  is  ,  and  his  address  is  Street, 

in  the  city  of  ,  Illinois. 

,  President. 
(corporate  seal.)  ,  Secretary. 

State  of  >  ss 

County,  \ 

On  this  day  of  ,  A.  D.  19     ,  personally  appeared  before  me  a 

Notary  Public  in  and  for  said   County  in  said   State.  and  ,  who 

are  respectively  President  and  Secretary  of  the  above  described  Corporation,  and 
made  oath  that  the  foregoing  statement  by  them  subscribed  is  true  in  substance  and 
in  fact. 

,  Notary  Public. 

CORPORATION  ACKNOWLEDGMENT. 

State  of  \  ss_ 

County  of  J 

I  (here  give  name  of  officer  and  his  official  title),  do  hereby  certify  that  A.  B., 
the  President,  and  C  D.,  the  Secretary  of  the  (here  insert  the  name  of  Corpora' 
tiou),  above  named,  who  are  personally  known  to  me  to  be  the  same  persons  whose 
names  are  subscribed  to  the  foregoing  instrument  as  such  President  and  Secretary, 
as  haviug  executed  the  said  instrument  on  behalf  of  the  said  (here  insert  name  of 
Corporation),  appeared  before  me,  this  day,  in  person,  and  acknowledged  that  they 
signed  and  affixed  the  corporate  seal  of  said  (here  insert  name  of  Corporation)  to 
said  instrument,  and  delivered  the  same  freely  and  voluntarily  as  the  act  and  deed  of 
the  said  (here  insert  name  of  Corporation),  for  the  uses  aud  purposes  therein  set 
forth. 

Given  under  my  hand  and  (private  or  official,  as  the  case  may  be)  seal  this 
day  of  ,  A.  D.  18     . 

ANTI-TRUST  AFFIDAVIT. 
State  of  Illinois,  7 
County  of  > 

I.  ,  do  solemnly  swear  that  I  am  the  of  the  Corporation 

known  and  styled  ,  duly  incorporated  under  the  laws  of  on  t  lie 

dav  of  ,  and  now   transacting  and  conducting  business  in  the 

State  of  Illinois,  and  that  I  am  duly  authorized  to  represent  said  Corporation  in 
the  making  of  this  affidavit,  and  I  do' further  solemnly  swear  that  the  said 
known  and  styled  as  aforesaid,  has  not  since  the  first  day  of  July,  A.  D.  1893, 
created,  entered  into,  or  become  a  member  of,  or  a  party  to,  and  was  not  on  the 

day  of  nor  at  any  day  since  that  date  and  is  not  now,  a  member 

of,  or  a  party  to,  any  pool,  trust,  agreement,  combination,  confederation,  or  under- 
standing with  any  other  corporation,  partnership,  individual,  or  any  other  person  or 
association  of  persons,  to  regulate  or  fix  the  pnee  of  any  article  of  merchandise  or 
commodity;  aud  that  it  has  not  entered  into  or  become  a  member  of,  or  a  party  to, 
any  pool/trust,  agreement,  contract,  combination,  or  confederation,  to  fix  or  limit 
the  amount  or  quantity  of  any  article,  commodity,  or  merchandise  to  be  manufac- 
tured, mined,  produced,  or  sold  in  this  State,  and  that  it  has  not  issued  and  does 
not  own  any  trust  certificates  ;  and  for  any  corporation,  agent,  officer,  or  employee, 
or  for  the  directors  or  stockholders  of  any  corporation,  has  not  entered  into,  and  is 
not  now  in,  any  combination,  contract,  or  agreement  with  any  person  or  persons, 
corporation  or  corporations,  or  With  any  stockholder  or  director  thereof,  the  pur- 
pose and  effect  of  which  said  combination,  contract,  or  agreement  would  be  to  place 
the  management  or  control  of  such  combination  or  combinations,  or  the  manufac- 
tured product  thereof,  in  the.  hands  of  any  trustee  or  trustees,  with  the  intent  to 
limit  or  fix  the  price  or  lessen  the  production  and  sales  of  any  article  of  commerce, 

7;.'.) 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

use,  or  consumption,  or  to  prevent,  restrict,  or  diminish  the  manufacture  or  output 
of  any  such  article. 

Subscribed  and  sworn  to  before  me,  a                     within  and  for  the  County  of 
,  this                day  of                19     . 
(seal.)  

INDIANA. 

AFFIDAVIT  OF  PRESIDENT  AND   SECRETARY 

State  of  )  sg 

County,  J 

,  President,  and  ,  Secretary,  each  of  lawful  age,  being  duly 

sworn,  upon  their  oaths,  state  that  they  make  this  affidavit  for  the  purpose  of  com- 
plying with  An  Act  entitled  "  An  Act  to  regulate  the  admission  of  foreign  corpo- 
rations for  profit,  to  do  business  in  the  State  of  Indiana."  Approved  March  9,  1907. 
In  force  April  10,  1907- 

That  they  are  respectively  President  and  Secretary  of  ,  a  Corporation 

duly  incorporated  under  the  laws  of  the  State  of  on  the  day 

of  ,  19     ,  for  a  term  of  years. 

That  the  business  said  Corporation  proposes  to  pursue  under  its  charter  in  the 
State  of  Indiana  is  as  follows  : 

That  the  amount  of  capital  stock  of  said  Corporation  is  dollars  and  the 

proportion  of  the  capital  stock  of  said  Corporation  which  is  represented  by  the 
property  located  and  business  transacted  in  the  State  of  Indiana,  is  (express 

in  fraction,  as  one-half,  one-fourth,  etc.,  as  the  case  may  be),  and  the  amount  of  the 
said  capital  stock,  so  represented  in  the  State  of  Indiana,  is  dollars  ;    That 

said  Corporation  is  transacting,  or  intends  to  transact,  business  in  the  following 
States  or  countries : 

That  the  amount  paid  in  upon  its  capital  stock  is  as  follows : 
That  the  property  and  assets  and  the  estimated  value  thereof  that  will  be  em- 
ployed in  the  business  of  said  Corporation  in  the  State  of  Indiana  is  as  follows  : 

That  the  disposition  made  of  capital  stock  subscribed  for  and  not  paid  in  is  as 
follows  : 

That  the  officers  and  directors  of  said  Corporation  are  as  follows : 

Residence,  Town,  Street 
Name.  and  Number 

President     . 

Secretary     ■ 

Director      


That  the  principal  office  in  Indiana  is  at  Street  in  the  city  of 

Indiana.  That  the  name  of  the  agent  or  attorney  in  fact  upon  whom  service  can  be 
had  in  all  suits  commenced  in  the  State  is  ,  and  his  address  is 

Street,  in  the  city  of 

,  .  ,  President. 

(corporate  seal.)  >  Secretary. 

State  of  l 

County,  J  ss* 
On  this  day  of  ,  A.  D.  19     ,  personally  appeared  before  me, 

a  Notary  Public  in  and  for  said  county,  in  said  State,  and  ,  who 

are  respectively  President  and  Secretary  of  the  above  described  Corporation,  and 
made  oath  that  the  foregoing  statement  by  them  subscribed  is  true  in  substance 
and  in  fact. 

,  Notary  Public. 

760 


FORMS    AND    PRECEDENTS. 


CORPORATION  ACKNOWLEDGMENT. 

State  of  )  sg 

County  of  > 

Personally  appeared  before  me  (name  and  title  of  officer),  this  day  of 

,  A.  D.  19     ,  A.  B.,  President  of  the  (name  of  Corporation),  and  S.  P., 

Secretary  of  (name  of  Corporation),  and  A.  B.  as  such  President,  and  S.  P.  as  such 

Secretary,  and  on  behalf  of  said  (name  of  Corporation)  acknowledged  the  execution 

of  the  annexed  instrument. 

Witness  my  band  and  seal  of  office  (if  officer  have  a  seal),  this  day  of 

,  A.  D.  19     . 

IOWA. 
RESOLUTION   OF  BOARD   OF  DIRECTORS 


At  a  meeting   of  the  Board   of  Directors   of  the  held  at 

,  on  the  day  of  ,  A-  D.,  190     ,  the  following  resolution 

was  adopted : 

Be  it  Resolved,  That  a  certified  copy  of  the  articles  of  the  above  incorporation 
be  filed  with  the  Secretary  of  State,  of  the  State  of  Iowa,  with  a  request  thai  a  cer- 
tificate be  issued  permitting  said  Corporation  to  transact  business  within  the  State 
of  Iowa. 

Be  it  further  Resolved,  That  service  of  process  is  hereby  authorized  to  be  made 
upon  any  of  the  officers  or  agents  of  said  Corporation,  acting  for,  or  engaged  in  the 
transaction  of  its  business  within  the  said  State. 

Be  it  further  Resolved,  That  the  permit  so  issued  shall  be  subject  to  all  the 
provisions  of  the  statutes  of  Iowa  relating  to  corporations  for  pecuniary  profit. 

Be  it  further  Resolved,  That  the  Secretary  of  this  Corporation  be  and  is  hereby 
authorized  and  instructed  to  do  any  and  all  things  necessary  to  carry  out  the 
provisions  of  this  resolution. 

,  President. 
,  Secretary. 
CORPORATION  ACKNOWLEDGMENT. 


H 


State  of 
County  of 

On  this  day  of  ,  A.  D.  19     ,  before  me  (name  and  title  of 

officer),  in  and  for  said  county,  personally  came  A.  B.,  President  (or  other  officer) 
of  (name  of  Corporation),  to  me  personally  known  to  be  the  identical  person  whose 
name  is  subscribed  to  the  above  instrument  as  President  (or  other  officer)  of  (name 
of  Corporation),  grantor  therein  named,  and  acknowledged  the  execution  of  said 
instrument  to  be  the  voluntary  act  and  deed  of  the  said  Corporation  by  him,  as  such 
officer,  voluntarily  done  and  executed. 

In  Testimony  Whereof,  I  have  hereunto  set  my  hand  and  official  seal  (if  the  officer 
have  a  seal)  the  day  and  year  above  written. 

KANSAS. 

APPLICATION  FOR  AUTHORITY  TO   ENGAGE  IN  BUSINESS  IN 
THE  STATE  OF  KANSAS  AS  A  FOREIGN  CORPORATION. 

To  thk  Charter  Board  of  the  State  of  Kansas:  The  ,    a  cor- 

poration organized  under  the  laws  of  the  State  of  ,  applies  for  permission 

to  engage  in  business  in  the  State  of  Kansas,  and  for  that  purpose  submits  the 
following  statement,  to  wit : 

761 


INCORPORATION   AND   ORGANIZATION   OF    CORPORATIONS. 


First. 

A  certified  copy  of  its  Charter  or  Articles   of  Incorporation,    which  is   filed 
herewith. 

Second. 

The  place  where  the  principal  office  or  place  of  business  of  said  Corporation  is 
located  is 

Third. 

The  full  nature  and  character  of  the  business  in  which  said  Corporation  proposes 
to  engage  within  the  State  of  Kansas  is 

Fourth. 
The  names  and  addresses  of  the  officers  and  trustees  or  directors  are : 


Fifth. 

Resources.                Dollars.  Cts.            Liabilities.                   Dollars.     Cts. 

Bills  receivable,  Capital  paid  up, 

Keal  estate,  Surplus, 

Personal  property,  Undivided  profits, 

Stocks,  bonds,  and  other  Bills  payable. 

securities,  Accounts  payable, 

Merchandise,  Bonded  indebtedness, 

Cash  on  hand,  Encumbrance  on  real  estate 

Due  from  banks,  or  plant, 
Accounts,  receivable, 

Judgments,  ^ 

Total,  Total, 
Sixth. 

The   amount  of    the   capital   stock   of  said   Corporation   is  dollars 

divided  into  shares,  of  dollars  each. 

We  further  state  that  the  above  application  is  made  in  good  faith,  with  the  in- 
tention that  said  Corporation  shall  actually  engage  in  the  business  specified,  and 
none  other. 

State  of  > 

County,  \ 

I,  ,  President,  and  I,  ,  Secretary,  of  the  above-named  Cor- 

poration, do  solemnly  swear  that  the  above  is  a  full  and  complete  statement  of  the 
resources  and  liabilities  of  said  Corporation  as  shown  by  the  books  of  the  same,  and 
that  said  statement  and  the  several  matters  and  things  contained  in  this  application 
are  true  in  every  particular,  to  the  best  of  my  knowledge  and  belief.  So  help  me 
God. 

,  President. 
,  Secretary. 
Subscribed  and  sworn  to  before  me,  this  day  of  ,  A.  D.  190     . 

[seal.] 

,  Notary  Public. 
My  commission  expires  ,  19 

CONSENT  OF  CORPORATION. 

Know   all  Men    by   these    Presents  :    That  the  ,  a  Corporation 

organized  under  the  laws  of  the  State  of  ,  and  with  its  principal  office  at 

762 


FORMS    AND    PRECEDENTS. 

,  in  said  State,  hereby  consents,  without  power  of  revocation,  that  actions 
■may 'be  commenced  against  it,  the  said  ,  in  the  proper  court  of  any  county 

in  the  State  of  Kansas  in  which  a  cause  of  action  against  such  Corporation  may 
arise,  or  may  have  heretofore  arisen,  or  in  which  plaint  ill'  may  reside,  l> v  service  of 
process  on  the  Secretary  of  State  of  the  State  of  Kansas  ;  and  the  said  Corporation 
stipulates  and  agrees  that  such  service  shall  be  taken  and  held  in  all  courts  to  be  as 
valid  and  binding  as  if  due  service  had  been  made  upon  the  President  or  any  other 
chief  officer  of  said  Corporation. 

In  Witness  Whereof,  said  Corporation  has  caused  these  presents  to  be  executed 
by  its  President  and  its  Secretary,  and  authenticated  by  its  corporate  seal,  at 
in  said  State  of  this  day  of  ,  A.  D.  190     . 

,  President. 
Attest : 

,  Secretary. 

RESOLUTION 

BY 

The  of 

,190     . 

At  a  meeting  of  the  Directors  of  ,  duly  held  at  the  office  of  said 

Company,  on  the  day  of  ,  190     ,  Mr.  offered  the  fol- 

lowing resolution  and  moved  its  adoption  : 

Resolved,  That  the  President  ana  Secretary  of  this  be  and  they  are 

hereby  authorized  and  instructed  to  execute  the  written  consent  thereof  to  be  sued 
in  the  State  of  Kansas,  in  the  manner  provided  in  section  3  of  an  Act  of  the  Legis- 
lature of  the  State  of  Kansas  concerning  private  corporations,  approved  January  7, 
1899. 

The  resolution  was  adopted. 

State  of  } 

County  of  J 

,  being  duly  sworn,  says  he  is    Secretary  of  the  of 

,  and  that  the  foregoing  is  a  true  and  correct  copy  of  a  resolution 
adopted  by  the  Board  of  Directors   of  said  ,  on  the  day  of 

,  190     ,  together  with  the  minutes  concerning  said  resolution. 

,  Secretary. 
Sworn  to  and  subscribed  before  me,  this  day  of  ,  190     . 

,  Notary  Public. 
My  commission  expires  19     . 

CERTIFICATE  OF  FILING  OF  ANNUAL  STATEMENT. 

Office  of  the  Secretary  of  State, 

Topeka,  ,190     . 

I,  ,  Secretary  of  State,  do  hereby  certify  that  the  annual  state- 

ment of  the  of  for  the  year  ending  ,190     ,  has  been 

made  and  is  on  file  in  this  office. 

,  Secretary  of  State. 
By  ,  Charter  Clerk. 

CORPORATE  ACKNOWLEDGMENT. 
State  of  Kansas,  ) 
County  of  $ 

Be  it  Remembered,  That  on  this  day  of  ,  19     ,  before 

me,  the  undersigned,  a  within  and  fur  the  county  and  State  aforesaid, 

came  ,  President  of  ,  a  Corporation  duly  organized,  incorporated, 

and  existing  under  the  laws  of  the  State  of  ,  who  is  personally  known  to 

763 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS. 

me  to  be  such  officer,  and  who  is  personally  known  to  me  to  be  the  same  person 
who  executed  as  such  officer  the  within  instrument  of  writing,  and  such  person  duly 
acknowledged  the  execution  of  the  same  to  be  the  act  and  deed  of  said  Corporation. 
In  Witness  Whereof,  I  have  hereunto  subscribed  my  name  and  affixed  my  official 
seal  on  the  day  and  year  last  above  written. 

(Signature  and  title  of  officer.) 

KENTUCKY. 

STATEMENT  OF   CORPORATION 

[To  be  filed  in  the  office  of  the  Secretary  of  State  before  doing  business  in  this  State.] 

(Date)  ,  190     . 

To  the  Secretary  of  State,  Frankfort,  Ky.  : 

SIR)  —  I  hereby  give  natice  that  the  place         of  business  for  the   (name  of 
Corporation)  (a  Corporation  of  the  State  of  )  in  Kentucky 

[is]  [are]  ,  and  that  of  ,  Ky.,  of  , 

Ky.,  of  ,  Ky.,  [is]  [are]  our  agent         thereat,  upon  whom 

process  may  be  served  in  any  suit  "that  may  be  brought  against  our  Company  within 
the  State  of  Kentucky. 

Done  at  this  day  of  ,  190     . 

,  President. 
,  Secretary. 
[seal.] 

Note.  —  This  statement  may  be  signed  by  the  President  or  Secretary. 
(Fill  out  and  return,  with  fifty  cents  recording  fee.) 

CORPORATE  ACKNOWLEDGMENT. 

State  of  Kentucky, 
County  of 

Personally  appeared  before  me,  a  within  and  for  the  county  and  State 

aforesaid,  President  of  ,  a  Corporation  duly  organized,  incor- 

porated, and  existing  under  and  by  the  laws  of  the  State  of  ,  and  , 

Secretary  of  said  Corporation,  who  are  personally  known  to  me  to  be  such  officers, 
and  who  are  personally  known  to  me  to  be  the  same  persons  who  executed  as  such 
officers  the  within  instrument  of  writing,  and  such  persons  duly  acknowledged  the 
execution  of  the  same  to  be  the  act  and  deed  of  said  Corporation. 

Subscribed  to  in  my  presence  this  day  of  ,  190     . 

LOUISIANA. 

ACT  No.  54  OF   1904. 

Know  all  Men   by   these   Presents  :    That  the  Company  of 

in  the  State  of  ,  doing  business,  or  being  about  to  do  busi- 

ness in  the  State  of  Louisiana,  in  conformity  with  the  laws  thereof,  does,  pursuant 
to  the  laws  of  said  State,  hereby  make  this  its  written  declaration  that  the  place  or 
locality  of  its  domcile  is  ;  that  it  is  doing  business  at  the  following 

place     ,  in  the  State  of  Louisiana,  to  wit :  ,  and  that  it  does  hereby 

make,  constitute,  and  appoint  of  the  city  of  parish  of 

its  true  and  lawful  attorney,  in  and  for  the  State  of  Louisiana  on  whom  all  pro- 
cess of  law,  whether  mesne  or  final,  against  said  Company,  may  be  served  in  any 
action  or  special  proceedings  against  said  Company  in  the  State  of  Louisiana,  sub- 
ject to  and  in  accordance  with  all  the  provisions  and  statutes  and  laws  of  said  State 
of  Louisiana  now  in  force  and  such  other  acts  as  may  be  hereafter  passed  amenda- 
torv  thereof  and  supplementary  thereto,  and  the   said  attorney  is  hereby  dulv 

764 


FORMS    AND    PRECEDENTS. 

authorized  and  empowered,  as  the  agent  of  said  Company,  to  receive  and  accept 
service  of  process  in  all  cases  as  provided  for  by  the  laws  of  the  State  of  Louisiana, 
and  such  service  shall  be  deemed  valid  personal  service  and  binding  upon  this 
Company,  agreeably  to  Article  264  of  the  Constitution  of  Louisiana,  and  in  com- 
pliance with  Act  No.  54  of  1904.  This  appointment  is  to  continue  in  force  for 
the  period  of  time  and  in  the  manner  provided  for  by  the  statutes  of  the  State  of 
Louisiana,  and  until  another  attorney  shall  be  duly  and  regularly  substituted, 

///  Witness  Whereof,  The  said  Company,  in  accordance  with  a  resolution  of  its 
Board  of  Directors,  duly  passed  on  the  day  of  ,  A.  D.  100 

(a  certified  copy  of  which  is  hereto  attached),  has  to  these  presents  affixed  its  cor- 
porate seal,  and  caused  the  same  to  be  subscribed  and  attested  to  by  its  President 
and  Secretary  at  the  city  of  in  the  State  of  on  the 

day  of  ,  A.  D".  190     . 

,  President. 
[skal.]  ,  Secretary. 

CERTIFIED    COPY     OF  A    RESOLUTION    DULY    PASSED    BY    THE 

BOARD  OF  DIRECTORS  OF  THE  COMPANY  ON 

THE  DAY  OF  ,  190    . 

At  a  meeting  of  the  Board  of  Directors  of  the  Company,  held  on  the 

day  of  ,  A.  D.  190    ,  at  the  office  of  the  Company  in  the  city 

of  ,  State  of  ,  a  quorum  of  said  board  being  present,  on  mo- 

tion the  following  resolution  was  duly  passed  : 

"  Resolved,  That  this  Company  having  been  admitted  or  having  applied  for 
admission  to  transact  business  in  the  State  of  Louisiana,  in  conformity  with  the 
laws  thereof,  hereby  makes,  constitutes,  and  appoints  of 

its  true  and  lawful  attorney  in  and  for  the  State  of  Louisiana,  with  the  powers 
hereinafter  set  forth  ;  and  hereby  authorizes  the  President  and  Secretary,  under  the 
-corporate  seal  of  the  Company  to  file  a  written  declaration  in  the  office  of  the  Secre- 
tary of  State,  setting  forth  the  place  or  locality  of  the  domicile  of  this  Corporation, 
the'  place  or  places  in  the  State  of  Louisiana  where  it  is  doing  business,  and  the 
name  of  its  agent  in  said  State  upon  whom  process  may  be  served,  and  for  said  pur- 
pose particularly  does  hereby  authorize  the  said  President  and  Secretary,  under  the 
corporate  seal  of  the  Company  to  make,  constitute,  and  appoint  of  the 

city  of  its  true  and  lawful  attorney,  in  and  for  the  State  of  Louisiana, 

on  whom  all  process  of  law,  whether  mesne  or  final,  against  said  Company  may  be 
served  in  any  action  or  special  proceedings  against  said  Company  in  the  Stale  of 
Louisiana,  subject  to  and  in  accordance  with  all  the  provisions  and  statutes  and  laws 
of  said  State  of  Louisiana  now  in  force,  and  such  other  acts  as  may  hereafter  be 

Eassed,  amendatory  thereof  and  supplementary  thereto;  and  the  said  attorney  to 
e  duly  authorized  and  empowered,  as  the  agent  of  said  Company,  to  receive  and 
accept  service  of  process,  in  all  cases  as  provided  for  by  the  laws  of  the  State  of 
Louisiana,  and  such  service  to  be  deemed  valid  personal  service  aud  binding  upon  this 
Company,  agreeably  to  Article  264  of  the  Constitution  of  Louisiana,  and  in  com- 
pliance with  Act  54  of  1904.  Said  appointment,  is  to  continue  in  force  for  the 
period  of  time,  and  in  the  manner  provided  for  by  the  statutes  of  the  Stale  of 
Louisiana,  and  until  another  attorney  shall  be  duly  and  regularly  substituted." 

I  hereby  certify  that  the  above  is  a  correct  copy  of  the  vote  or  resolution  of  the 
Directors  of  said  Company,  authorizing  the  appointment  of  an  attorney  for  the 
State  of  Louisiana. 

Witness  my  hand  and  the  seal  of  said  Company  at  ,  this 

day  of  ,190    . 

(SEAL.)     '  ,  Secretary. 

State  of 
County  of 
City  of 

On  this  day  of  ,  190     ,  before  me,  the  subscriber 

765 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS. 

duly  appointed  to  take  proof  and  acknowledgment  of  deeds  and  other  instruments,, 
came  ,  President,  and  ,  Secretary  of  the  Company, 

to  me  personally  known  to  be  the  individuals  described  in  and  who  executed  the 
preceding  instrument,  and  they  each  duly  acknowledged  to  me,  and  in  the  presence 
of  the  subscribing  witnesses,  the  execution  of  the  same ;  and  being  by  me  each  duly 
sworn  severally  and  each  for  himself  deposeth  and  saith  that  they  are  the  officers  of 
the  Company  aforesaid,  and  that  the  seal  affixed  to  the  preceding  instrument  is  the 
corporate  seal  of  the  said  Company  ;  and  that  the  said  corporate  seal  and  their  sig- 
natures as  such  officers  were  duly  affixed  and  subscribed  to  the  said  instrument  by 
the  authority- and  direction  of  said  Corporation. 

In  Testimony  Whereof,  I  hereunto  set  my  hand  and  affix  my  official  seal,  at  the 
city  of  ,  the  day  and  year  first  above  written. 

[seal.] 


CORPORATION  ACKNOWLEDGMENT. 


State  of 
County  of 


[•  ss. 

f  (name  and  title  of  officer)  do  hereby  certify  that  G.  H.,  attorney  in  fact  for 
(name  of  Corporation),  grantor  in  the  foregoing  instrument,  appeared  before  me,  and 
acknowledged  on  behalf  of  said  Corporation  that  he  executed  the  said  instrument  for 
the  purposes  therein  mentioned,  and  that  the  same  is  the  act  and  deed  of  the  said 
Corporation. 

In  Testimony  Whereof,  I  have  hereunto  set  my  hand  and  official  seal  this 
day  of  ,  A.  D.  18     .  (Signature  and  title.) 

MAINE. 

Note.  —  All  foreign  corporations  are  at  liberty  to  carry  on  any  legal  business  in 
Maine  without  a  permit. 

CORPORATION  ACKNOWLEDGMENT. 

State  of  7 

County  of  J 

day  of  ,  A.  D.  19     ,  personally  appeared  A.  B.,  President 

of  (name  of  Corporation),  and  acknowledged  the  foregoing  instrument  to  be  the  free 
act  and  deed  of  the  said  (name  of  Corporation),  before  me. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  seal  on  the  day  and  year 
above  written. 

MARYLAND. 

Note.  —  See  general  forms  numbered  1  to  10,  ante. 

CORPORATION  ACKNOWLEDGMENT. 

Instruments  must  end  as  follows: 

"  And  this  deed  further  witnesseth,  that  the  said  A.  B.  Co.  doth  hereby  appoint 
T.  G.,  its  attorney,  to  acknowledge  these  presents  as  the  act  of  said  A.  B.  Company." 

Witness  the  corporate  seal  of  the  said  Company  and  the  signature  of  the  President 
thereof.  J-  T-  K.,  President. 

State  of  7  gs 

County  of  S 

I  hereby  certify  that  on  this  day  of  ,  in  ,  before  the 

subscriber,  a  (title  of  officer),  personally  appeared  T.  G.,  he  being  known  to  me  to 

be  the  person  who  is  known  and  described  as  and  professing  to  be  the  attorney 

named  in  the  letter  or  power  of  attorney  contained  in  the  foregoing  deed,  and  by 

766 


FORMS    AND    PRECEDENTS. 


virtue  and  in  pursuance  of  the  power  and  authority  thereby  granted,  acknowledged 
the  said  deed  or  instrument  of  writing  to  be  the  act  and  deed  of  the  party  of  the  hrst 
part  hereto. 

COMMONWEALTH    OF    MASSACHUSETTS. 


We,  ,  President, 

a  majority  of  the  Directors  of 


,  Treasurer,  and  ,  being 

,  a  Corporation  organized  under  the  laws  of 
,  in  compliance  with  the  provisions  of  chapter  437  of  the  Acts  of  1903, 
do  hereby  certify  as  follows  concerning  said  Corporation  : 

1.  That  the  name  of  said  Corporation  is 

2.  That  the  location  of  its  principal  office  is 

3.  That  the  names  and  addresses  of  its  officers  are  as  follows: 

Names  (Full  Proper  Names).  Address. 

President, 
Treasurer, 
Clerk  or  Secretary, 
Directors, 

4.  That  the  date  of  its  annual  meeting  for  the  election  of  officers  is 

5.  That  the  amount  of  its  capital  stock  authorized  is  dollars. 
The  amount  of  capital  stock  iisued  is  dollars. 

The  number  of  its  shares  is      }  Common 

„,  ,        -.  .,     ,  \  Preferred  dollars. 

The  par  value  of  its  shares  is  j  Common  dollars. 

The  amount  paid  in  thereon  to  ]  Preferred  dollars, 

the  treasurer  is  \  Common  dollars. 

The  amount  of  such  payment  made  otherwise  than  in  money  is  as  follows  : 
Paid  in  property,  viz. :  [State  here  the  number  of  shares  issued  on 
each  item.] 


Real  Estate  .... 

Location    .     .     . 

Area  .... 
Machinery  .... 
Merchandise  .  .  . 
Bills  Receivable  .  . 
Stocks  and  Securities 
Patent  Rights  .  .  . 
Trademarks  .  .  . 
Copyrights  .... 
Goodwill  .... 
Services*  .  .  .  . 
Expenses*  .... 


Common. 


*  State  the  nature  of  such  service  or  expenses. 

6.  Usual  place  of  business  in  this  Commonwealth. 

7.  To  whom  and  where  shall  notice  and  copies  of  legal  process  be  addressed  ? 
In  Witness  Whereof,  we  have  hereunto  signed  our  names,  this  day  of 

,  in  the  year  nineteen  hundred  aud 


State  of  |S3 

Then  personally  appeared  the  above-named 


,  190     . 

,  and  severally  made  oath 

767 


INCORPORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

that  the  foregoing  certificate,  by  them  subscribed,  is  true  to  the  best  of  their  knowl- 
edge and  belief. 

Before  me, 

(If  out  of  Massachusetts,  oath  before  a  Commissioner  for  Massachusetts  or 
Notary  Public ;  if  within  Massachusetts,  before  a  Notary  Public  or  Justice  of  the 
Peace.) 

Know  all  Men  by  these  Pkesents,  That  the  ,  a  Corpora- 

tion located  in  the  of  ,  in  the  State  of  ,  and 

established  under  the  laws  of  said  State,  desiring  to  transact  business  in  the  Com- 
monwealth of  Massachusetts  in  conformity  with  the  laws  thereof,  hereby  constitutes 
and  appoints  the  Commissioner  of  Corporations  of  said  Commonwealth,  or  his  suc- 
cessor in  office,  to  be  the  true  and  lawful  attorney  of  said  Corporation,  in  and  for 
the  said  Commonwealth,  upon  whom  all  lawful  processes  in  any  action  or  proceed- 
ing against  said  Corporation  in  said  Commonwealth  may  be  served,  in  like  manner 
and  with  the  same  effect  as  if  said  Corporation  existed  therein.  And  the  said 
Corporation  hereby  stipulates  and  agrees  that  any  lawful  process  against  said  Cor- 
poration, which  is  served  on  its  said  attorney,  shall  be  of  the  same  legal  force  and 
validity  as  if  served  ou  said  Corporation. 

This  appointment  and  the  authority  of  said  attorney  shall  continue  in  force 
so  long  as  any  liability  remains  outstanding  against  said  Corporation  in  said 
Commonwealth. 

In  Witness  Whereof,  the  aforesaid  Corporation,  pursuant  to  a  resolution  of  its 
Board  of  Directors,  duly  passed  on  the  day  of  ,  A.  D.  190 

(a  certified  copy  whereof  is  hereto  annexed),  hath  caused  these  presents  to  be  sub- 
scribed by  its  President  and  countersigned  by  its  Clerk  or  Secretary,  and  the  corpo- 
rate seal  of  said  Corporation  to  be  hereunto  affixed,  this  day  of 
in  the  year  one  thousand  nine  hundred  and 

,  President. 
,  Clerk  [or  Secretary]. 

N.  B.  —  The  seal  of  the  Corporation  should  be  affixed. 

State  of  )  gs 

County  of  £ 

On  this  day  of  ,  A.  D.  190     ,  before  me,  the  sub- 

scriber, a1  ,  duly   appointed  and  qualified,  personally  appeared  the 

before-named  President,  and  Clerk  (or  Secretary),  of  the 

(who  are  personally  known  to  me),  and  severally  acknowledged 
the  execution  of  the  foregoing  instrument  by  them  subscribed,  and  they  severally 
made  oath  that  they  are  respectively  the  aforedescribed  officers  of  said  Corporation ; 
that  the  seal  affixed  to  said  instrument  is  its  true  and  proper  corporate  seal ;  and 
that  they  suoscribed  said  instrument,  and  said  corporate  seal  was  affixed  by  virtue 
of  authority  duly  conferred  by  said  Corporation. 

[fitness  my  hand  and  official  seal,  at  in  the  State  and  county  afore- 

said, the  day  and  year  above  written. 

1  If  out  of  Massachusetts,  before  a  Commissioner  for  Massachusetts  or  Notary  Public. 
If  within  Massachusetts,   before  a  Notary  Public  or  Justice  of  the  Peace. 

[copy.] 

At  a  meeting  of  the  Board  of  Directors  of  the  ,  a  Corporation 

established  under  the  laws  of  the  State  of  ,  duly  held  on  the 

day  of  ,  A.  D.  190     ,  a  quorum  being  present,  the  following  Resolution 

was  adopted  : 

"  Resolved,  that  this  Corporation  hereby  appoints  the  Commissioner  of  Corpo- 
rations of  the  Commonwealth  of  Massachusetts,  or  his  successor  in  office,  to  be  its 
true  and  lawful  attorney,  in  and  for  said  Commonwealth,  upon  whom  all  lawful 
processes  in  any  action  or  proceeding  against  this  Corporation  in  said  Common- 
wealth may  be  served,  in  like  manner  and  with  the  same  effect  as  if  this  Corpora- 

768 


FORMS    AND    PRECEDENTS. 

tion  existed  therein.  And  this  Corporation  hereby  stipulates  and  agrees  that  any 
lawful  process  against  it,  which  is  served  on  its  said  attorney  shall  be  of  the  same 
legal  force  and  validity  as  if  served  on  this  Corporation.  This  appointment, and  the 
authority  of  said  attorney,  shall  continue  in  force  so  long  as  any  liability  remains 
outstanding  against  this  Corporation  in  said  Commonwealth;  and  the  President 
and  Clerk  or  Secretary  are  hereby  authorized  to  execute,  in  the  name  of  the  Corpo- 
ration, and  under  its  corporate  seal,  a  certificate  of  authority  or  power  of  attorney 
to  the  said  Commissioner  of  Corporations,  in  conformity  with  this  Resolution  and 
the  laws  of  said  Commonwealth." 

/  hereby  Certify,  that  the  above  is  a  true  copy  of  the  Resolution  of  the  Directors 
of  this  Corporation,  authorizing  the  appointment  of  an  attorney  for  the  Common- 
wealth of  Massachusetts,  as  recorded  by  me. 

,  Clerk  [or  Secretary]. 

MICHIGAN. 

,  190    . 

To  tue  Secretary  of  State,  Lansing.  Michigan: 

,  a  foreign  Corporation  organized  and  existing  under  and  by  virtue 
of  the  laws  of  the  State  of  ,  hereby  makes  the  following  declaration, 

pursuant  to  an  Act  of  the  Legislature  of  Michigan,  entitled  "  An  Act  to  prescribe 
the  terms  and  conditions  on  which  foreign  corporations  may  be  admitted  to  do  busi- 
ness in  Michigan,"  approved  June  6,  1901,  as  amended: 

First.    The  location  of  its  principal  office  is 

The  location  of  its  principal  place  or  places  of  business 

The  names  and  addresses  of  the  principal  officers  are 

Second.  The  location  of  its  principal  office  and  the  principal  place  of  business 
in  Michigan 

The  names  and  addresses  of  the  officers  or  agents  of  the  Company  in  charge  of 
its  business  in  Michigan  are 

Third.    The  authorized  capital  stock  of  said  Corporation  is  Dollars 

($  )• 

Fourth.  The  total  value  of  the  property  owned  and  used  by  the  Company  in  its 
business,  giving  the  location  and  general  character,  and  stating  separately  the  value 
of  its  tangible  property,  of  its  cash  and  credits,  its  franchises,  patents,  trade-marks, 
formulas,  good  will,  is 

Fifth.  The  value  of  property  owned  and  used  in  Michigan  and  where  situated, 
showing  different  kinds  as  in  item  fourth 

Sixth.   The  total  amount  of  business  transacted  during  the  preceding  year 

Seventh.    The  amount  of  business,  if  any,  transacted  in  Michigan 

Eighth.  The  particular  purpose  or  particular  kind  of  business  for  which  the 
company  desires  to  be  admitted  is  the  following 

Ninth.    Its  corporate  term  will  expire  • 

In  Witness  Whereof,  said  has  caused  its  corporate  seal  to  be  affixed 

and  its  name  to  be  hereunto  attached  this  day  of  ,  A.  D.  190     . 

(l.  s.)  By 

State  of  )  sg 

County  of  )  _ 

,  being  duly  sworn,  depose  and  say,  that  they  are  officers,  to  wit, 
the  and  respectively  of  ,  that  the  foregoing 
statement,  executed  in  the  name  and  on  behalf  of  said  Corporation,  and  under  its 
corporate  seal,  is  true.  

Sworn  to  before  me  and  subscribed  in  my  presence,  this                        day  of 
,  A.  D.  190     .  

My  commission  expires  10,  • 

Office  of  the  Secretary  of  State, 
Lansing,  Michigan,  ■  190    . 

From  the  foregoing  statement  made  bv  the  said  ,  and  from  utuei 

8     b  769 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

facts  coming  to  my  knowledge,  I  find  the  proportion  of  the  capital  stock  of  the 
Company,  represented  by  its  property  and  business  in  Michigan,  to  be 
per  cent  of  its  authorized  capital  stock,  to  wit,  the  sum  of  dollars,  on 

which  the  franchise  fee  of  one-half  of  one  mill  on  each  dollar  will  be  the  sum  of 
dollars. 

,  Deputy  Secretary  of  State. 

APPOINTMENT  OF  AGENT. 

At  a  Special  Meeting  of  the  Board  of  Directors  of  the  Company 

duly  called,  and  held  at  the  office  of  the  Company  at  the  City  of  ,  on 

the  day  of  ,  A.  D.  190     ,  the  following  resolution  was  adopted  : 

Resolved,  That  of  ,  Michigan,  be  and  he  is  duly  appointed 

the  agent  of  this  Company,  and  authorized  to  acknowledge  service  of  any  and  all 
process  for  and  on  behalf  of  this  Company  ;  and  this  Company  does  hereby  consent 
that  service  of  process  upon  said  shall  be  taken  and  held  to  be  as 

valid  as  if  served  upon  this  Company,  according  to  the  laws  of  the  State  of 
Michigan  or  any  other  State,  and  this  Company  hereby  waives  all  claim  of  error  by 
reason  of  such  service. 


Secretary  of  the  Company. 

State  of  I  ss 

County  of  £ 

I,  ,  President  of  the  Company,  do  hereby  certify  that 

the  above  and  foregoing  is  a  true  and  correct  copy  of  a  resolution  adopted 
on  this  day  of  ,  A.  D.  190     ,  appointing  the  agent 

of  said  Company,  to  acknowledge  service  of  process. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused  to  be  affixed  the 
seal  of  said  Companv,  at  the  city  of  ,  this  day  of 

,  A.  D.  190     . 

(l.  s.)  ,  President. 

CORPORATION  ACKNOWLEDGMENT. 

State  of 
County  of 

On  this  day  of  ,  A.D.  19     ,  before  me  (name  and 

title  of  officer  in  full),  personally  came  A.B  ,  known  to  me  to  be  the  President  of 
the  (name  of  Corporation  in  full),  and  CD.,  known  to  me  to  be  the  Secretary  of 
said  Company,  and  severally  acknowledged  the  foregoing  instrument  of  writing 
to  be  their  free  act  and  deed  and  the  free  act  and  deed  of  said  (name  of  Corporation). 

And  I  further  certify  that  I  know  the  seal  affixed  to  said  instrument  to  be  the 
corporate  seal  of  the  said  Corporation. 

In  Testimony  Whereof,  I  do  hereby  set  my  hand  and  affix  my  official  seal  the 
day  and  year  last  above  written. 


MINNESOTA. 

Know  all  Men  by  these  Presents  :  That  ,  in  the  State  of 

,  a  Corporation  duly  organized  and  existing  under  the  laws  of  said 
State  of  ,  has  and  maintains  a  public  office  and  place  of  business  in 

the  State  of  Minnesota,  to  wit:  ,  in  the  City  of  in  said 

State  of  Minnesota,  and  does  hereby  constitute  and  appoint  ,  of  said 

City  of  ,  its  agent  and  attorney,  who   is   duly  authorized  to  accept 

service  of  process  and  upon  whom  service  of  process  may  be  had  in  any  action 
to  which  said  company  may  be  a  party,  and  service  on  said  agent  shall  be  taken 
and  held  as  personal  service  upon  said  Corporation.     This  appointment  to  be  and 

770 


FORMS    AND    PRECEDENTS. 

continue  in  force  for  the"  period  of  time  and  maimer  provided  by  sections  2888, 
2SS9,  2890,  Revised  Laws  of  Minnesota,  1905,  and  until  another  attornev  shall  be 
substituted  and  appointed,  and  the  appointment  of  as  agent  is  hereby 

revoked. 

Witness  our  bauds  and  seal  of  said  company,  this  dav  of 

A.D.  190  . 

,  President. 
,  Secretary 
State  of  > 

County  of  |     ' 

Personally  appeared  before  me  ,  President,  and  ,  Secre- 

tary, and  acknowledged  the  foregoing  to  be  their  free  act  and  deed. 

,  Notary  Public. 

AFFIDAVIT  OF  CORPORATE   OFFICERS. 

State  of 


County 


ss. 


,  of  lawful  age,  being  duly  sworn,  upon  his  oath  states  that  he 
makes  this  affidavit  for  the  purpose  of  complying  with  sections  2SS8,  28S9,  2890, 
Revised  Laws  of  Minnesota.  1905. 

"  An  Act  to  require  every  foreign  Corporation,  organized  for  pecuniary  profit, 
now  or  hereafter  doing  business  in  this  State,  to  have  a  public  office  in  this  State, 
at  which  to  transact  its  business,  and  to  appoint  an  agent  duly  authorized  to  accept 
service  of  process,  and  requiring  such  Corporation  to  file  its  articles  or  certificates 
of  incorporation  with  the  Secretary  of  State,  and  pay  into  the  State  Treasury 
certain  fees,  providing  penalties  for  a  violation  of  the  provisions  of  this  act,  and 
repealing  Chapter  70,  General  Laws  of  1899;-  approved  April  17,  1899." 

That  he  is  the  of  ,  a   Corporation  duly   incorporated 

under  the  laws  of  the  State  of  on  the  day  of  , 

190  ,  for  a  term  of  years;  that  the  amount  of  Capital  Stock  of  said 

Corporation  is  dollars;    and   the  proportion  of  the  Capital  Stock  of 

said  Corporation  which  is  represented  by  the  property  located  and  business  trans- 
acted in  the  State  of  Miunesota  is1  and  the  amount  of  said  Capital 
Stock  so  represented  in  the  State  of  Minnesota  is  dollars;  that 
represents  said  Corporation  in  the  State  of  Minnesota;  and  that  the 
public  office  of  said  Corporation  or  place  for  the  transaction  of  its  business  in 
the  State  is  at                         in  the  City  of                            Minnesota. 


State  of  ) 

County  of  \  ss- 

On   this  day   of  personally   appeared    before   me,   a 

in  and  for  said  county,  in  said  county,  in  said  State, 
and  made  oath  that  the  foregoing  statement  by  him  subscribed  is  true 

in  substance  and  fact. 


[seal] 


1  One-fourth,  nine-tenths,  etc.,  as  the  facts  may  be. 


CORPORATION  ACKNOWLEDGMENT. 

On    this  day   of  ,    A  I).    19      ,    before    me,  appeared 

A.B.,  to  me  personally  Known,  who  being  by  me  duly  sworn  (or  affirmed),  did  sav 
that  he  is  the  President  (or  other  officer  or  agent  of  the  Corporation  or  association) 

771 


INCORPORATION   AND   ORGANIZATION    OF   CORPORATIONS. 

of  (describing  the  Corporation  or  association),  and  that  the  seal  affixed  to  said 
instrument  is  the  corporate  seal  of  said  Corporation  (or  association),  and  that  said 
instrument  was  signed  and  sealed  in  behalf  of  said  Corporation  (or  association)  by 
authority  of  its  board  of  directors  (or  trustees),  and  said  A.B.  acknowledged  said 
instrument  to  be  the  free  act  and  deed  of  said  Corporation  (or  association). 

MISSISSIPPI. 
CORPORATION   ACKNOWLEDGMENT. 

Note.  —  Use  general  forms  numbered  1  to  10,  ante. 

State  of 
County  of 

Personally  appeared  before  me  (name  and  title  of  officer)  the  within  named  A.  B., 
President  (or  other  officer)  of  (name  of  Corporation),  who  acknowledged  that  he 
signed  and  delivered  the  foregoing  instrument,  on  the  day  and  year  therein 
mentioned. 

Given  under  my  hand  and  seal  of  office  (if  the  officer  has  a  seal),  this 
day  of  ,  A.  D.  18     . 

MISSOURI. 

A  foreign  Corporation  desiring  to  obtain  certificate  of  authority  and  license  to 
do  business  in  Missouri  is  required  to  file  in  the  office  of  the  Secretary  of  State : 

First.  A  copy  of  its  articles  of  association  and  charter  certified  by  the  Secretary 
of  State  of  the  State  in  which  the  Company  is  incorporated.  The  articles  should 
show  that  the  full  amount  of  the  authorized  capital  stock  has  been  bona  fide  sub- 
scribed, and  that  at  least  one-half  thereof  has  been  paid  up  according  to  the  laws  of 
Missouri.  If  the  articles  should  not  set  out  these  facts,  but  if  subsequent  to  its 
incorporation  the  full  amount  of  the  authorized  capital  has  been  bona  fide  subscribed, 
and  one-half  thereof  has  been  paid  up,  it  will  be  permissible  for  an  authorized  officer 
of  the  Company  to  make  affidavit  to  that  effect  in  the  following  form : 

State  of  ? 

County  of  £ 

I,  (President  or  Secretary)  of  the  ,  a  Corporation  organized 

under  the  laws  of  ,  with  a  capital  stock  of  dollars,  divided  into 

shares,  of  the  par  value  of  dollars  each,  as  authorized  by  its  certificate  of  in- 

corporation issued  by  the  Secretary  of  State  of  the  State  of  ,  on  the 

day  of  18     ,  do  hereby  certify  that  all  of  said  stock  has  been  bona  fide 

subscribed  and  per  cent  (not  less  than  50)  actually  paid  up  according  to  the 

laws  of  the  State  of  Missouri. 

Witness  my  hand  this  day  of  ,  19     . 

,  (President  or  Secretary). 

Subscribed  and  sworn  to  before  me,  this  day  of  ,  19     . 

My  commission  expires  19     . 

(seal.)  ,  Notary  Public. 

Second.  A  statement,  duly  sworn  to  by  the  principal  officer  or  agent  in  Missouri, 
setting  forth  the  proportion  of  the  capital  stock  which  is  represented  by  its  property 
located  and  business  transacted  in  Missouri :  and  designating  a  public  office  or 
place  of  business  in  this  State  for  the  transaction  of  its  business  where  legal  service 
may  be  obtained  upon  it,  as  follows  : 
State  of  Missouri, 
County  of 

,  Principal  Officer  (or  Principal  Agent)  in  Missouri  of  ,  a 

Corporation  duly  incorporated  under  the  laws  of  the  State  of  on  the 

day  of  19     ,  for  a  term  of  years,  being  duly  sworn,  upon  his  oath, 

states  that  he  represents  said  corporation  as  its  principal  agent  in  the  State   of 
Missouri ;  that  the  amount  of  capital  stock  of  said  Corporation  is  dollars, 

772 


FORMS    AND    PRECEDENTS. 

and  the  proportion  of  the  capital  stock  of  said  Corporation  which  is  represented  by 
its  property  located  and  business  transacted  in  the  State  of  Missouri,  is 
dollars ;  and  that  the  principal  office  of  said  Corporation  or  place  for  the  transaction 
of  its  business  in  the  State  of  Missouri,  where  legal  service  may  be  obtained  upou 
it,  is  located  at  the  city  of  ,  Missouri. 

Subscribed  and  sworn  to  before  me,  this  day  of  ,  19 

My  commission  expires  19     . 

,  Notary  Public. 

Third.   Affidavit  that  said  Corporation  is  not  in  contravention  of  the  laws  of 
Missouri  against  pools,  trusts,  and  conspiracies,  as  follows : 
State  of  Missouri,      } 
County  of  $ 

I,  ,  do  solemnly  swear  that   I  am  the  (President,  Secretary, 

or  Managing  Officer),  of  the  Corporation  known  and  styled  ,  duly  incorpo- 

rated under  the  laws  of  ,  on  the  day  of  ,  and  now  transact- 

ing or  conducting  business  in  the  State  of  Missouri,  and  that  I  am  duly  authorized  to 
represent  said  Corporation  in  the  making  of  this  affidavit.  And  I  do  further  swear 
that  the  said  ,  known  and  styled  as  aforesaid,  is  not  now,  and  lias  not  at 

any  time  within  one  year  from  the  date  of  this  affidavit,  created,  entered  into,  be- 
come a  member  of,  or  participated  in  any  pool,  trust,  agreement,  combination,  con- 
federation, or  understanding  with  any  other  corporation,  partnership,  individual,  or 
any  other  person  or  association  of  persons,  to  regulate  or  fix  the  price  of  any  article 
of  manufacture,  mechanism,  merchandise,  commodity,  convenience,  repair,  any  pro- 
duct of  mining,  or  any  article  or  thing  whatsoever,  or  the  price  or  premium  to  be 
paid  for  insuring  property  against  loss  or  damage  by  fire,  lightning,  or  storm  ;  and 
that  it  has  not  entered  into,  or  become  a  member  of  or  a  party  to  any  pool,  trust, 
agreement,  contract,  combination,  or  confederation  to  fix  or  limit  the  amount  or 
quantity  of  any  article  of  manufacture,  mechanism,  merchandise,  commodity,  con- 
venience, repair,  any  product  of  mining,  or  any  article  or  thing  whatsoever,  or  the 
price  or  premium  to  be  paid  for  insuring  property  against  loss  or  damage  by  firer 
lightning,  or  storm  ;  and  that  it  has  not  issued  and  does  not  own  any  trust  certifi- 
cates, and  for  any  corporation,  agent,  officer,  or  employee,  or  for  the  directors  or 
stockholders  of  any  corporation,  has  not  entered  into  and  is  not  now  in  any  combi- 
nation, contract,  or  agreement  with  any  person  or  persons,  corporation  or  corpora- 
tions, or  with  any  stockholder  or  director  thereof,  the  purpose  and  effect  of  which 
said  combination,  contract,  or  agreement  would  be  to  place  the  management  or  con- 
trol of  such  combination  or  combinations,  or  the  manufactured  product  thereof,  in 
the  hands  of  any  trustee  or  trustees,  with  the  intent  to  limit  or  fix  the  price  or 
lessen  the  production  and  sale  of  any  article  of  commerce,  use,  or  consumption,  or 
to  prevent,  restrict,  or  diminish  the  manufacture  or  output,  of  any  article  ;  and  that 
it  has  not  made  or  entered  into  any  arrangement,  contract,  or  agreement  with  any 
person,  association  of  persons,  or  corporation  designed  to  lessen,  or  which  tends  to 
lessen,  full  and  free  competition  in  the  importation,  manufacture,  or  sale  of  any 
article,  product,  or  commodity  in  this  State,  or  under  the  terms  of  which  it  is  pro- 
posed, stipulated,  provided,  agreed,  or  understood  that  any  particular  or  specified 
article,  product,  or  commodity  shall  be  dealt  in,  sold,  or  offered  for  sale  in  this  State. 
to  the  exclusion,  in  whole  or  in  part  of  any  competing  article,  product,  or 
commodity. 

,  (President,  Secretary,  or  Managing  Officer). 

Subscribed  and  sworn  to  before  me,  a  within  and  for  the  County  of 

,  this  day  of  ,  19     . 

(SKAL.) 

Additional  affidavit  required  under  Act  of  1903  to  be  filed  with  the  application 
for  license  to  do  business  in  Missouri. 
State  of  > 

County  of  \  SS" 

We,  ,  President,  and  ,  Secretary,  of  the  ,  a  Corporation 

duly  organized  and  existing  under  the  laws  of  the  State  of  ,  by  charter  bear- 

ing date  ,  19     ,  located  at  ,  in  the  State  of  ,  do  solemnly 

77:; 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

swear  that  in  making  application  for  license  to  do  business  in  Missouri,  under  pro- 
visions of  section  1025,  R.  S.  1899,  as  amended  by  an  Act  approved  March  24, 
1903,  we  are  duly  authorized  to  represent  said  Corporation  in  making  this  affidavit, 
and  that  it  is  the  desire  of  said  Corporation  to  carry  on  in  the  State  of  Missouri, 
solely,  the  business  of  ,  which  is  authorized  by  its  charter  ;  and  that  if  said 

corporation  is  licensed  it  shall  not  and  will  not  do  or  transact  any  other  business  in 
Missouri,  or  exercise  any  other  or  further  powers,  rights,  or  privileges  than  those 
set  out  above,  whether  or  not  its  charter  powers  be  so  limited. 

Attest : 

(corporate  seal.)  ,  President. 

,  Secretary. 

Subscribed  and  sworn  to  before  me,  this  day  of  ,  19     . 

(seal.)  ,  Notary  Public. 

Fourth.  Send  draft  or  certified  check  payable  to  the  order  of  the  State  Treasurer, 
to  cover  the  State  tax  and  fees,  estimated  as  follows  :  On  a  capital  of  $50,000  or 
less,  invested  in  Missouri,  $50.00  ;  license,  $10.00,  and  fee  for  issuing  certificate, 
$1.50  ;  minimum  total,  $61.50.  For  each  $10,000  capital  so  invested  in  excess  of 
$50,000,  $5.00  additional. 

CORPORATION  ACKNOWLEDGMENT. 


>  ss. 


State  of 
County  of 

On  this  day  of  ,  A.  D.  19     ,  before  me,  appeared  A.  B.,  to 

me  personally  known,  who,  being  by  me  duly  sworn  (or  affirmed),  did  say  that  he 
is  the  President  (or  other  officer  or  agent  of  the  Corporation  or  association)  of 
(name  of  Corporation  or  association),  and  that  the  seal  affixed  to  said  instrument  is 
the  corporate  seal  of  said  Corporation  (or  association),  and  that  said  instrument 
was  signed  and  sealed  in  behalf  of  said  Corporation  (or  association),  by  authority  of 
its  board  of  directors  (or  trustees),  and  said  A.  B.  acknowledged  said  instrument 
to  be  the  free  act  and  deed  of  said  Corporation  (or  association). 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal,  the 
day  and  year  aforesaid. 

MONTANA. 

Note.  —  Use  general  forms  numbered  1  to  10,  ante. 

CORPORATION  ACKNOWLEDGMENT. 

State  of  \ 

County  of  \ 

On  this  day  of  ,  A.  D.  19     ,  personally  appeared  before 

me  (name  and  title  of  officer),  in  and  for  said  city  (or  county),  A.  B.,  President  of 
the  (name  of  Corporation),  personally  known  to  me  as  such  person  described  in  and 
who  executed  the  foregoing  instrument,  and  he  acknowledged  to  me  that  he  executed 
the  same  freely  and  voluntarily  as  the  act  and  deed  of  the  said  Corporation,  and  for 
the  uses  and  purposes  therein  mentioned. 

Witness  my  hand  and  seal. 

NEBRASKA. 

Know  all  Men  by  these  Presents  :  That  the  ,  a  Corporation 

with  a  principal  office  at  ,  State  of  ,  and  a  branch  office  in 

the  State  of  Nebraska,  at  ,  County  of 

The  name  of  our  agent  in  charge  of  our  branch  office  is  ,  and  we 

do  hereby  appoint  the  Auditor  of  Public  Accounts  of  the  State  of  Nebraska,  our 
true  and  lawful  attorney  upon  whom  all  lawful  process  in  any  action  or  proceeding 

774 


FORMS    AND    PBECKDENTS. 

against  the  Company  may  be  served  with  the  same  effect  as  if  the  Company  existed 
in  this  State. 

And  it  is  hereby  strictly  agreed  on  the  part  of  the  Company  that  any  lawful 

{>rocess  against  said  Company,  which  is  served  on  said  attorney,  shall  be  of  the  same 
e^al  torce  aud  validity  as  if  served  on  the  Company,  and  that  this  authority  shall 
continue  in  force  so  long  as  any  liability  remains  outstanding  against  the  Company 
in  the  State  of  Nebraska. 

Witness  our  signatures  this  day  of  190     . 

,  President. 
,  Secretary. 

State  of  }  ss 

County  of  $ 

Before  me  a  notary  public  in  and  for  the  County  of  ,  in  State  of  , 

personally  appeared  ,  President,  and  ,  Secretary,  and  acknowledged 

the  signing  of  the  above  instrument. 

,  Notary  Public. 

(File  one  copy  with  the  Secretary  of  State,  recording  fee  30  cts.     And  tile  one 
copy  with  Register  of  Deeds  in  county  where  branch  office  is  located.) 

CORPORATION  ACKNOWLEDGMENT. 

State  of  Nebraska,  )  sg 
County  of  S     "' 

On  this  day  of  A.  D.  190     ,  before  me,  a  duly 

commissioned  and  qualified  in  and  for  said  county,  personally  came  the  above  named 
,  President,  and  ,  Secretary,  of  ,  who  are  personally 

known  to  me  to  be  the  identical  persons  whose  names  are  affixed  to  the  above  deed 
as  President  and  Secretary  of  said  Corporation,  and  they  acknowledged  the  instru- 
ment to  be  their  voluntary  act  and  deed  and  the  voluntary  act  and  deed  of  said 
Corporation. 

Witness  my  hand  and  official  seal  at  ui  said  county  the  day  and  year 

aforesaid. 

NEVADA. 
APPOINTMENT  OF  RESIDENT  AGENT. 

Know  all  Men  by  these  Presents  :  That  we  ,  and 

respectively  the  President  and  Secretarv  of  the  ,  do  hereby  certify  and 

declare  as  'and  for  the  act  and  deed  of  such  officers  of  said  Corporation,  as  follows: 
viz  :  That  the  Company  is  a  Corporation  duly  created,  organized,  am! 

existing  under  and  by  virtue  of  the  laws  of  the  Stale  of  .  and  bas  its 

office  aud  the  place  where  the  principal  business  of  said  Corporation  is  transact,  d  at 
the  city  .     And  said  Corporation  owns  and  holds  property  in  the  Mat,  o 

Nevada  and  does  business  therein.  That  this  Corporation  has  appointed  and  will 
keep  in  the  State  of  Nevada,  as  an  agent  upon  whom  all  legal  process 

may  be  served  for  this  Corporation  . 

'Now  therefore,  this  Corporation  does  hereby  file  this  certificate  properly  authen- 
ticated by  the  proper  officers  of  this  Corporation,  with  the  Secretary  ol  Mat,-  oi 
Nevada  and  does  hereby  certify  specially  and  declare  that,  the  lull  nam,'  of  their 
said   agent,  upon  whom  all  legal  process  may  be  served  lor  tins  Corporation  is, 

,  that  the  residence  of  said  agent  is  at  ,  W  the  county  of 

in  the  State  of  Nevada.  or  i  •  i 

Done  at  the  said  city  and  county  of  ,  State  of  ,  this  day 

of  ,  A.  D.  ,  in  pursuance  of  a  resolution  duly  passed   by  the  board  01 

directors  of  said  corporation,  and  entered  on  the  minutes  thereof. 

,  President,  and   • 

,  Secretary,  of  the 
Company. 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

CORPORATION  ACKNOWLEDGMENT. 

State  of  )  sg> 

County  of  $ 

On  this  day  of  ,  A.  D.  19     ,  before  me  (name  and  title  of 

officer  in  full)  personally  appeared  A.  B.,  the  President  of  the  (name  of  Corpora- 
tion),  to  me  personally  known  to  be  the  individual  whose  name  is  subscribed  to  the 
foregoing  instrument  as  the  President  of  the  said  (name  of  Corporation),  and  he 
acknowledged  to  me  that  he  executed  the  same  as  the  President  of  said  Corporation 
for,  on  behalf  and  in  the  name  of  said  company,  as  its  free  and  voluntary  act  and 
deed,  for  the  uses  and  purposes  therein  mentioned,  and  in  pursuance  to  the  order 
and  resolution  of  said  company  directing  such  instrument  to  be  executed,  by  signing 
the  same  as  President  thereof  and  affixing  thereto  its  corporate  seal. 

In  Witness  Whereof  I  have  hereunto  set  my  hand  and  affixed  my  official  seal  (if 
the  officer  have  a  seal),  the  day  and  year  first  above  written. 

NEW    HAMPSHIRE. 

Note. — No  permit  to  transact  business  is  required  of  Foreign  Corporations 
in  New  Hampshire. 

CORPORATION  ACKNOWLEDGMENT. 

State  of         •         I  ss> 
County  of  \ 

On  the  day  of  ,  A.D.  19     ,  (name  of  Corporation), 

by  (name  of  agent),  its  agent  for  this  purpose,  duly  authorized,  appeared  and 
acknowledged  the  foregoing  instrument,  by  it  signed,  to  be  its  free  act  and  deed. 

Before  me,  .  (Title). 

NEW   JERSEY. 
STATEMENT  BY  FOREIGN  CORPORATION. 

The  Company. 

In  accordance  with  the  provisions  of  an  act  of  the  Legislature  of  the  State  of 
New  Jersey,  entitled  "An  Act  Concerning  Corporations  (Revision  of  lS9fi),"  the 
Company,  a  Corporation  of  the  State  of  ,  does  hereby 

certify  and  set  forth  : 

First.   That  the  paper  hereto  attached  is  a  true  and  correct  copy  of  its  charter 
or  certificate  of  organization  filed  with  the  Secretary  of  State  of  the   State   of 
,  which  copy  is  attested  by  its  President  and  Secretary  under  its 
corporate  seal. 

Second.    The  total  amount  of  capital  stock  said  Company  is  authorized  to  issue 
is  %  ,  and  the  amount  actually  issued  is  $ 

Third.   The  character  of  business  which  said  Corporation  is  to  transact  in  this 
State  is  the 

Fourth.   The  place  within  the  State  of  New  Jersey  which  now  is  and  is  to  be  its 
principal  place  of  business  is  No.  Street,  in  the  city  of 

Fifth.  ,  of  full  age,  an  actual  resident  of  this  State,  whose  abode 

is  at  number  Street,  in  the  State  of  New  Jersey,  is  the 

Agent  of  said  Corporation  in  this  State,  upon  which  Agent  process  against  such 
Corporation  may  be  served  in  this  State ;  said  Agent's  office  is  at  the  said  principal 
place  of  business  of  said  Corporation  in  the  State  of  New  Jersey. 

In  Testimony  Whereof,  the  said  Corporation  hath  caused  its  corporate  seal  to  be 
hereto  affixed,'  and  these  presents  to  be  signed  by  its  President  and  attested  by  its 
Secretary,  the  day  of  ,  A.D.  190     . 

The  Company. 

By  ,  President. 

Attest : 

,  Secretary. 

776 


FORMS    AND    PRECEDENTS. 

(Attach  statement  of  directors,  officers,  etc.     Then  annex  copy  of  charter  or 
certificate  of  incorporation.) 

The  undersigned,  president  and  secretary,  of  the  Company  do  hereby 

certify,  that  the  annexed  is  a  true  aud  correct  copy  of  the  certiticate  of  incorpora- 
tion of  the  aforesaid  company  aud  the  whole  thereof. 

In  Attestation  Whereof,  we  have  affixed  our  hauds  aud  the  corporate  seal  of  the 
company  this       •  day  of  ,  19     . 

,  President. 
,  Secretary. 


REPORT  OF  A  FOREIGN  CORPORATION. 

The  Company. 

Organized  uuder  the  Laws  of  the  State  of 

The  Corporation  above  named,  organized  under  the  Laws  of  the  State  of 
,  does  hereby  make  the  following  report  in  compliance  with  the  pro- 
visions of  an  act  of  the  Legislature  of  New  Jersey,  entitled  "  An  Act  Concerning 
Corporations  (Revision  of  1896),"  and  the  various  acts  amendatory  thereof  and 
supplemental  thereto. 

First.   The  name  of  the  Corporation  is 

Second.   The  location  of  the  registered  office  is  at   No.  Street, 

,  and  is  the  agent  upou  whom  process  may  be  served. 

Third.    The  character  of  the  business  is 

Fourth.    The  amount  of  the  authorized  capital  stock  is  &  .     The 

amount  actually  issued  and  outstanding  is  $ 

Fifth.  The  names  and  addresses  of  all  the  Directors  and  Officers,  and  the  term 
when  the  office  of  each  expires  are  as  follows  : 

Names  of  Directors.  Address.  Expiration  of  Term. 

Officers : 

Sixth.  The  next  annual  meeting  of  the  stockholders  for  election  of  Directors  is 
appointed  to  be  held  on 

Witness  our  hands  the  day  of  ,  A.D.  190     . 

,  Preside/it. 
,  Secretary. 

CORPORATION  ACKNOWLEDGMENT. 

State  of  >  sg 

County  of  J 

Be  it  remembered  that  on  the  day  of  ,  A.D.  19     , 

before  me  (name  and  title  of  officer),  personally  appeared  E.D.,  to  me  known,  who, 
being  by  me  duly  sworn  according  to  law,  on  his  oath  doth  depose  and  say  that  he 
is  the  Secretary  (or  other  officer)  of  the  (name  of  Corporation),  the  grantors  in  the 
foregoing  deed  named;  that  the  seal  affixed  to  the  .said  deed  is  the  corporate  seal  of 
the  said  (name  of  Corporation)  ;  that  it  was  so  fixed  by  order  of  the  said  (name  of 
Corporation);  that  A.  B.  is  the  President  (or  other  executive  officer)  of  the  said 
(name  of  Corporation);  that  he  saw  the  said  A.  15.,  as  such  President,  sign  the 
said  deed,  and  heard  him  declare  that  lie  Bigned,  scaled,  and  delivered  the  saun- 
as the  voluntary  act  and  deed  of  the  said  (name  of  Corporation)  by  their  order; 
and  that  this  deponent  signed  his  name  thereto,  at  the  same  time,  as  a  subscribing 
witness. 

Subscribed  and  sworn  before  me,  the  day  and  year  above  written. 


INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS. 


NORTH    CAROLINA. 

APPLICATION  FOR  DOMESTICATION  BY  A  FOREIGN 
CORPORATION. 

The  Company,  organized  under  the  laws  of  the  State  of 

,  does  hereby  make  the  following  statement  in  compliance  with  the  pro- 
visions of  section  1194  of  the  Revisal  of  1905  of  North  Carolina : 

First,  The  name  of  the  Corporation  is 

Second,   The   location  of  the  registered  office  is  at  No.  Street, 

,  and  the  location  of  the  principal  office  in  North  Carolina  is  at  , 

N.  C,  County  of  ,  and  is  the  agent  upon  whom  pro- 

cess may  be  served. 

Third,  The  character  of  the  business  is 

Fourth,  The  amount  of  the  authorized  capital  stock  is  $  .     The  amount 

actually  issued  and  outstanding  is  $ 

Fifth,  The  names  and  addresses  of  all  the  Directors  and  Officers,  and  the  term 
when  the  office  of  each  expires,  are  as  follows : 

Names  of  Directors.  Address  Expiration  of  term. 


Officers  : 

President, 
Vice-President, 
2d  Vice-President, 
Treasurer, 
Secretary, 

[corporate  seal.] 

Witness  our  hands  the  day  of  A.  D.  190  . 

,  President. 
,  Secretary. 

CORPORATION  ACKNOWLEDGMENT. 

State  of  I  ss 

County  of  \ 

I,  (name  and  title  of  officer)  (if  before  a  Commissioner  of  affidavits  of  North 
Carolina  use  title,  &c,  as  in  foregoing  form)  do  hereby  certify  that  personally  ap- 
peared A.  B.,  who  being  by  me  duly  sworn  did  depose  and  say  that  he  resides  at 
;  that  he  is  the  President  of  (name  of  Corporation),  the  Corporation  described 
in,  and  who  executed  the  foregoing  instrument;  that  the  seal  affixed  to  said  instru- 
ment is  the  corporate  seal  of  said  Corporation,  affixed  by  their  authority,  and  at  the 
same  time  the  said  A.  B.  acknowledged  to  me  that  he  executed  the  said  instrument 
for  the  purposes  therein  expressed  as  President  of  the  (name  of  Corporation),  the 
Corporation  therein  described,  as  his  act  and  deed.  And  at  the  same  time  and  place 
personally  appeared  E.  F.  and  J.  H.,  who  being  by  me  severally  duly  sworn,  did 
depose  and  say  that  they  were  severally  members  of  the  (name  of  Corporation),  the 
Corporation  described  in,  and  who  executed  the  foregoing  instrument ;  that  the 
seal  attached  to  said  instrument  is  the  corporate  seal  of  said  Corporation ;  and 
at  the  same  time  and  place  the  said  E.  F.  and  J.  H.  acknowledged  to  me 
that  they  severally  executed  the   said  instrument  for  the   purposes  therein  ex- 

778 


FORMS    AND    PRECEDENTS. 

pressed  as  two  of   the  members  of  the  (name  of  Corporation),  the  Corporation 
therein  described. 

In  Witness  Whereof  \  have  hereunto  set  my  hand  and  affixed  my  official  seal,  at 
aforesaid,  the  day  and  year  in  the  corporation  first  above  mentioned. 


NEW    MEXICO. 
Note.  — Use  general  forms  numbered  1  to  10,  ante. 

CORPOEATION  ACKNOWLEDGMENT. 

State  of  7  gs 

County  of  ) 

Be  it  remembered  that  on  this  day  of  ,  A.  D.  "19     ,  before  me,  the 

undersigned,  a  (title  of  officer)  in  and  for  said  city  (or  county)  aforesaid,  oame  the 
(uame  of  Corporation),  by  A.  B.,  its  President,  who  is  to  me  well  and  personally 
known  as  the  same  person  whose  name  is  subscribed  to  the  foregoing  deed,  and 
he  duly  acknowledged  that  he  signed,  sealed,  and  executed  the  said  instrument  of 
writing  as  his  free  and  voluntary  act,  for  the  uses  and  purposes  therein  set  forth. 

Witness  my  hand  and  official  seal,  this  the  day  and  year  last  above  written. 


NORTH    DAKOTA. 

APPOINTMENT  OF  ATTORNEY    BY  CORPORATION. 

Know  all  Men  by  these  Presents  :  That  ,  a  Corporation  organ- 

ized, existing,  and  doing  business  under  and  by  virtue  of  the  laws  of  the  State  of 
,  located  in  the  city  of  in  said  State,  does  hereby  constitute 

and  appoint  ,  Secretary  of  State  of  the  State  of  North  Dakota  and  his 

successors  in  office,  its  true  and  lawful  attorney,  duly  authorized  to  accept  service 
of  process  and  upon  whom  all  process  in  any  action  or  proceeding  against  it  may  be 
served,  and  the  said  Corporation  does  hereby  stipulate  and  agree  that  any  process 
which  may  be  served  upon  the  said  attorney  shall  be  of  the  same  force  and  validity 
as  if  served  upon  it  personally  in  this  State.  This  appointment  shall  continue  in 
force  and  shall  not  be  revoked  so  long  as  any  liability  of  said  Corporation  remains 
•outstanding  in  this  State.  This  appointment  is  executed  in  compliance  with  and 
under  the  provisions  of  section  4697  of  the  Revised  Codes  of  1905  of  the  State  of 
North  Dakota. 

In  Witness  Whereof,  the  said  Corporation,  by  its  President,  has  caused  these 
presents  to  be  executed,  sealed  with  its  corporate  seal,  and  attested  by  its  Secretary, 
this  day  of  ,  A.  D.  190    . 

,  President. 

Attested:  ,  Secretary. 

State  of  ")  s3 

County  of  y 

On  this  day  of  ,  A.  D.  190     ,  before  me,  a  notary  public  in 

and  for  the  County  of  and  State  of  ,  personally  appeared 

,  President,  and  ,  Secretary,  of  said  Corporation,  and  each 

being  duly  sworn  deposes  and  says  that  they  arc  the  President  and  Secretary  re- 
spectively of  said  Corporation  and  that  jointly  they  have  full  light  and  authority  to 
execute  and  sign  the  foregoing  instrument  on  behalf  of  and  for  the  said  Corporation, 
and  that  the  same  is  as  valid  and  binding  as  if  executed  and  signed  by  the  Board  of 
Directors  of  said  Corporation.  ,  President. 

,  Secretary. 

Subscribed  and  sworn  to  before  me  this  day  of  ,  A.  I  >.  190 

,  Notary  Public. 

779 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 


CORPORATION  ACKNOWLEDGMENT. 

State  of  /  ss> 

County  of         S 

On  this  day  of  in  the  year  18     ,  before  me  (name  and  title  of 

officer),  personally  appeared  ,  known  to  me  (or  proved  to  me  on  the  oath  of 

)  to  be  the  President  (or  Secretary)  of  the  Corporation  that  is  described 
in  and  that  executed  the  within  instrument,  and  acknowledged  to  me  that  such  Cor- 
poration executed  the  same. 

OHIO. 

FORM  OF  APPLICATION  UNDER  ACT  OF  MAY  16,    1894. 

To  the  Secretary  of  State,  Columbus,  Ohio: 

,   a  foreign  Corporation  organized  and  existing  under  and   by 
virtue  of  the  laws  of  the  State  of  ,  with  its  principal  office  located  at 

,  in  County,  ,  iu  compliance  with  an  act  of  the 

General  Assembly  of  Ohio,  entitled  "  An  Act  to  further  supplement  section  148  of 
the  Revised  Statutes,"  passed  May  16,  1894  (as  amended  May  10,  1902),  requir- 
ing a  foreign  Corporation  organized  for  purposes  of  profit,  and  owning  or  using,  or 
which  proposes  to  own  or  use,  a  part  or  all  of  its  capital  stock  or  plant  in  said  State 
of  Ohio,  before  being  permitted  to  do  business,  exercise  its  franchises,  or  maintain 
an  action  therein,  under  the  oath  of  its  President,  Secretary,  or  other  officer,  to  make 
and  file  with  the  Secretary  of  State  a  statement  of  facts  and  pay  a  certain  stipulated 
fee,  hereby  makes  the  following  declaration: 

First.    The  authorized  capital  stock  of  said  Corporation  is  dollars 

($  ),  divided  into  (  )  shares  of  the  par  value  of 

dollars  ($  )  each. 

Second.   The  value  of  the  property  owned  and  used  in  Ohio,  situate  at 
is  dollars  ($  ). 

Third.    The  value  of  the  property  of  the  Company  owned  and  used  outside  of 
Ohio  is  dollars  ($  ). 

Fourth.   The  proportion  of  the  capital  stock  of  the  Company  represented  by 
property  owned  and  used,  and  by  business  transacted  iu  Ohio  is 
Fifth.    The  location  of  its  office  or  offices  in  Ohio  is  at 

Sixth.   The  names  and  addresses  of  the  officers  or  agents  of  the  Company  in 
charge  of  its  business  in  Ohio  are  as  follows : 
Name  of  President, 

Address, 
Name  of  Secretai'y, 

Address, 
Name  of  Treasurer, 
Address, 
Names  and  addresses  of  managers  or  agents,  other  than  as  above  enumerated : 

In  Witness  Whereof,  said  has  caused  its  corporate  seal  to  be  affixed 

and  its  corporate  name  to  be  hereunto  attached  by  an  officer  thereof,  to  wit :  its 
this  day  of  ,  A.  D.  190     . 


By 


(L.  S.) 

State  of  i  ss 

County  of  > 

,  being  duly  sworn,  deposes  and  says  that  he  is  an  officer,  to  wit: 
the  of  ,  that  he  executed  the  foregoing  statement,  in  the 

name  and  on  behalf  of  said  Corporation,  and  caused  its  corporate  seal  to  be  thereto 

780 


FORMS   AND   PRECEDENTS. 

affixed;  that  he  was  authorized  to  make  such  statement  and  to  execute  the  same 
by  authority  of  the  Corporation,  and  that  the  statements  therein  are  true. 

Sworn   to  before  me  and  subscribed  in  my  presence,  this  day  of 

,  A.  D.  190     . 
(l.  s.)  ZZI^ZZZI 

State  of  I  ss 

County,  j 
I,  ,  within  and  for  the  county  aforesaid,  do  hereby  certify  that 

,  whose   name  is  subscribed  to   the  foregoing  acknowledgment  as   a 
,  was  at  the  date  thereof  a  ,  in  and  for  said  county,  duly 

commissioned  and  qualified,  and  authorized  as  sucli  to  take  said  acknowledgment; 
and  further,  that  I  am  well  acquainted  with  his  handwriting,  and  believe  that  the 
signature  to  the  same  is  genuine. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  the  seal  of  said 
Court  at  this  day  of  ,  A.  D.  190     . 

Office  of  the  Secretary  of  State. 

Columbus,  Ohio,  ,  190     . 

From  the  facts  thus  reported  by  the  said  ,  I  find  the  proportion  of 

the  capital  stock  of  the  Company  represented  by  its  property  and  business  iu  Ohio 
to  be  per  cent  of  its  authorized  capital  stock,  to  wit :  the  sum  of 

dollars,  on  which  I  have  assessed  a  fee  of  one-tenth  of  one  per  cent,  amounting  to 
the  sum  of  dollars. 

,  Secretary  of  State. 

(L.  S.) 

FORM   OF  APPLICATION    UNDER  ACT  OF  APRIL  25,   1893. 

{Attach  Copy  of  Articles  of  Incorporation  hereto.) 
To  the  Secretary  of  State,  Columbus,  Ohio: 

,  a  Corporation  organized  and  existing  under  the  laws  of  the 
State  of  ,  with  its  principal  office  located  at  ,  in 

County,  ,  desiring  to  conform  to  the  laws  of  Ohio,  regulating  foreign 

corporations  doing  business  therein,  does  hereby  make  the  following  statement : 

First.    The  amount  of  its  authorized  capital  stock  is 

Second.  The  business  or  objects  of  the  Corporation  which  it  is  engaged  in 
carrying  on,  or  which  it  proposes  to  engage  in  or  carry  on  in  the  State  of 
Ohio  is 

Third.  The  principal  place  of  business  of  said  Corporation  in  Ohio  is  to  be 
located  at  in  County. 

Fourth.    We  hereby  appoint  ,  of  ,  in  County, 

Ohio,  as  the  person  upon  whom  process  may  be  served  iu  all  actions  that  maybe 
brought  against  this  Company  in  any  of  the  courts  of  the  State,  and  designate  his 
office  ,  iu  said  city,  as  the  principal  office  of  the  Company  in  the  State  of 

Ohio. 

In  Witness  Whereof  said  Corporation  has  caused  its  corporate  seal  to  be  hereto 
attached,  and  this  certificate  to  be  executed  by  its  President   and   Secretary,  this 
day  of  ,  A.  D.  190     . 

By  ,  President. 

,  Secretary. 
State  of  >  sg 

County  \  ' 

,  and  ,  bein^  first  duly  sworn,  depose  and  Bay  that 

they  all  did  execute  and  sign  the  foregoing  certificate  for  and  on  behalf  of  said  Cor- 

781 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS. 

poration,  and  that  the  same  is  their  free  act  and  deed,  and  is  the  free  act  and  deed 
of  said  ,  of  which  they  are  respectively  the  President  and  Secretary ;  that 

the  statements  therein  are  true,  and  that  the  seal  attached  thereto  is  the  genuine 
seal  of  said  corporation ;  they  further  declare,  on  oath,  that  the  charter  or  certificate 
of  incorporation  hereto  attached  is  a  true  copy  of  the  articles  of  incorporation  or 
charter  of  said 


Sworn  to  hefore  me  and  subscribed  in  my  presence,  this  day  of 

A.  D.  190     . 


State  of  > 

County  of  \ 

I,  ,  within  and  for  the  County  aforesaid,  do  hereby  certify  that 

,  whose  name  is  subscribed  to  the  foregoing  acknowledgment  as  a 
,  was  at  the  date  thereof  a  ,  in  and  for  said  county,  duly  commis- 

sioned and  qualified,  and  authorized  as  such,  to  take  said  acknowledgment  ;  an  i 
further,  that  I  am  well  acquainted  with  his  handwriting,  and  believe  that  the  sig- 
nature to  the  same  is  genuine. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  the  seal  of  said 
court,  at  this  day  of  ,  A.  1).  190     . 

(L-    S.)  _ 

,  Ohio,  ,190      . 


Gentlemen,  —  I  hereby  accept  the  appointment  as  the  representative  of  your 
Company  upon  whom  process  may  be  served,  and  agree  to  the  designation  of  my 
office,  ,  as  your  principal  office  in  the  State  of  Ohio. 

State  of  Ohio.  County  of  ,  ss. 

Personally  appeared  before  me  the  undersigned,  a  Notary  Public  in  and  for  said 
County,  this  day  of  ,  A.  D.  190     ,  the  above  named  , 

who  acknowledged  the  signing  of  the  foregoing  to  be  his  free  act  and  deed  for  the 
uses  and  purposes  therein  mentioned. 

Witness  my  hand  and  official  seal  on  the  day  and  year  last  aforesaid. 

(seal.)  Notary  Public  in  and  for  County,  Ohio. 

RETURN  OF  FOREIGN  CORPORATION  UNDER  SECTION  148c 
SHOWING  AGGREGATE  AMOUNT  OF  CAPITAL  STOCK  OWNED 
OR  CONTROLLED  BY  RESIDENTS   OF   OHIO,   ETC. 

The  Company, 

,190 
To  the  Secretary  of  State,  Columbus,  Ohio  : 

The  Compauy,  a  foreign  corporation  organized  and   existing  under 

and  by  virtue  of  the  laws  of  the  State  of  ,  with  its  principal  office  located 

at  ,  in  County,  ,  in  compliance  with  section  148c  of 

the  Revised  Statutes  of  Ohio,  as  amended  April  14,  1900,  does  hereby  make  its  re- 
turn and  statement  showing  the  aggregate  amount  of  all  of  its  capital  stock  owned 
and  controlled  by  residents  of  Ohio,  the  names  and  addresses  of  stockholders,  with 
t  he  number  of  shares  owned  by  each  on  the  day  preceding  the  second  Monday  of 
April,  A.  D.  1900,  together  with  the  assessed  value  of  the  property  of  such  Company 
returned  for  taxation  in  the  name  of  such  Corporation  in  the  State  of  Ohio,  and  the 
assessed  value  of  the  property  of  such  Company  returned  for  taxation  outside  of 
Ohio: 

782 


FORMS    AND    PRECEDENTS. 

First.  The  assessed  value  of  the  property  returned  for  taxation  in  the  name  of 
the  Corporation  in  the  State  of  Ohio  is  as  follows  : 

Name  of  county  (or  counties) 

Real  property,  value,  $ 

Personal  property,  value,  S 

Total,  $  . 

Second.  The  aggregate  value  of  the  real  and  personal  property  of  said  Corpora- 
tion returned  for  taxation  in  the  name  of  such  Corporation  outside  of  Ohio,  located 
in  the  (State  or  States)  is  S 

Third.  The  following  is  the  aggregate  amount  of  all  its  capital  stock  owned  or 
controlled  by  residents  of  Ohio,  together  with  the  names  and  addresses  of  the  stock- 
holders, with  the  number  of  shares  owned  by  each,  on  the  day  preceding  the  second 
Monday  of  April,  A.  D.  19UU  : 

Names  of  Stock-  No.  Shares  Common 

holders.  Post  office  Address.  S    ick. 


No.  Shares  Preferred  Par  Value  Preferred  Par  Value  Common 

Stock.  Stock.  Stuck. 


Total  number  shares  preferred  stock, 

Total  number  shares  common  stock, 

Aggregate  amount  of  preferred  stock  (par  value),  $ 

Aggregate  amount  of  common  stock  (par  value),  § 

Total  value  of  common  and  preferred,  % 

By 


(Title  of  Officer.) 
State  of 
County  of  >     ° 

,  being  first  duly  sworn,  says  that  he  is   the  of  said  , 

and  that  the  foregoing  return  and  statement  is  true  and  correct. 

Sworn  to  and  subscribed  before  me  and  in  my  presence  by  the  said  on 

this  day  of  ,  A.  D.  19     . 

,  Notary  Public. 
Department  of  State, 

Columbus,  Ohio,  ,1900. 

As  the  aggregate  amount  of  all  the  capital  stock  of  said  Company,  owned  or  con- 
trolled by  residents  of  the  State  of  Ohio,  is  in  excess  of  the  assessed  value 
returned  for   taxation  in  this   State,  said   stock  is  taxable   in 
proportion. 

,  Secretary  of  State. 


CORPORATION    ACKNOWLEDGMENT. 


State  of 
County  of 

Be  it  remembered  that  on  this  day  of  ,  in  the  year  of  our 

Lord  one  thousand   eight   hundred  and  ,  before  me,    I  he    subscriber,    a 

(title  of  the  officer)  in  and  for  said  county,  personally  came  A.  B.  (state  official 
position),  of  the  Company,  the  grantor  herein,  and  acknowledged  that,  as 

such  officer,  he  did  sign  the  foregoing  instrument,  and  caused  the  corporate  Beal  of 
said  Company  to  be  thereto  attached,  and  the  same  is  the  voluntary  act  and  deed  of 
said  Company  for  the  uses  and  purposes  therein  mentioned 

In  Witness  Whereof,  1  have  hereunto  set   mv  hand  anil  official  Beal,  this 
day  of  ,  A.  D.  19     . 

783 


INCORPORATION    AND   ORGANIZATION   OF  CORPORATIONS. 


OREGON. 

Declaration  — Foreign  Corporation. 

This  declaration  must  be  accompanied  by  a  certified  copy  of  the  Charter,  or 
articles  of  incorporation  of  such  foreign  Corporation,  joint  stock  Company  or  Asso- 
ciation, certified  to  by  the  legal  keeper  of  the  original,  together  with  a  certificate  of 
the  Secretary  of  State  of  a  State  or  Territory  of  the  United  States,  or  of  the  United 
States  Ambassador,  Minister,  Consul  General,  Vice  Consul,  or  Charge  d' Affaires  in 
a  foreign  country,  under  whose  jurisdiction  such  Corporation,  joint  stock  Company 
or  Association  was  formed,  that  such  certifying  officer  has  the  requisite  official 
knowledge  as  to  whether  such  charter  or  articles  of  incorporation  are  of  a  genuine, 
valid,  and  subsisting  character,  and  that  such  character  is  duly  certified  by  the 
officer  having  the  legal  custody  of  the  original. 

Corporation  Fee  Book  No. 

No.  .  Pase  No- 

declaration  OF  PURPOSE  TO  ENGAGE  IN  BUSINESS  IN  THE 
STATE  OF  OREGON. 

Know  all  Men  by  these  Presents: 

That  the  ,  a  ,  organized  and  existing  under  and  pursuant  to 

the  Laws  of  ,  having  its  principal   office  at  Number  _       Street,  in 

the  of  ,  hereby  makes  the  following  declaration  of  its  desire  and 

purpose  to  engage  in  business  within  the  State  of  Oregon,  which  declaration  is 
accompanied  by  a  duly  authenticated  copy  of  its  ,  in  compliance  with  the 

provisions  of  "An  Act  to  provide  for  the  licensing  of  Domestic  Corporations,  and 
Foreign  Corporations,  Joint  Stock  Companies  and  Associations,  etc.,"  approved 
February  16,  1903  : 

The  full  name  under  which  it  proposes  to  transact  business  is 

The  name  of  the  State  or  Country  under  whose  laws  it  was  organized  is 

The  location  of  its  home  office  is  at  Number  Street,  in   the 

of 

The  date  of  its  formation  or  incorporation  was  the  day  of  ,  19     . 

The  amount  of  its  capital  stock  is  ($  )  dollars.^ 

The  nature  of  the  pursuit,  business,  or  occupation  in  which  it  is  authorized  to 
engage, 

Said  corporation  commenced  the  transaction  of  business  in  the  State  of  Oregon 
on  the  day  of  190     .  ^T 

The  location  of  the  principal  office  within  the  State  of  Oregon  is  at  Number 
Street,  in  the  of  ,  County  of 

The  name  of  its  Attorney  in  Fact,  constituted  and  appointed  in  accordance  with 
the  provisions  of  section  6  of  "An  Act  to  provide  for  the  licensing  of  Domestic 
Corporations  and  Foreign  Corporations,  Joint  Stock  Companies  and  Associations, 
etc.,   approved    February   16,    1903,    is  ,  whose   business   address   is   at 

Number  Street,  in  the  of  ,  in  the  County  of 

The  names  and  addresses  of  its  principal  officers,  and  of  its  directors  or  trustees, 
are  as  follows : 

Names.  Office.  Postoffice  Address. 


The  name  and  residence  of  its  General  Agent  within  the  State  of  Oregon  is 
,    Number  Street,    in   the  of  in   the   County 

In  Witness  Whereof,  said  Corporation,  in  pursuance  of  a  resolution  duly  adopted 
by  its  Board  of  ,  has  caused  this  declaration  to  be  signed  by  its 

784 


FORMS    AND    PRECEDENTS. 


President  and  Secretary,  and  its  Corporate  Seal  to  be  affixed,  the 

day  of  ,  190     . 

(corporate  seal.) 


President . 


fSKAX  ) 

(SEAI.J 

-  (SEAX). 


Secretary. 


I,  ,  President,  and  I,  ,  Secretary  of  the 

,  being  severally  duly  sworn  depose  and  say,  and  each  for  himself  says, 
that  I  am  President  and  Secretary,  respectively,  of  the 

the  Corporation  mentioned  in  and  which  executed  the  foregoing  declaration,  and 
that  said  declaration  is  a  full,  true,  and  correct  statement  of  the  matters  therein 
contained  according  to  the  best  ot  my  information,  knowledge,  and  belief. 

Subscribed  and  sworn  to  before  me  this  day  of  ,  190 


I,  ,  Secretary  of  the  ,  being  first  duly  sworn  depose 

and  say  upon  oath  that  is  the  President  of  said  Corporation,  and 

that  the  signature  affixed  to  the  above  and  foregoing  declaration  is  the  genuine 
signature  of  said  ;  that  the  Corporate  Seal  hereinbefore  attached  and  im- 

pressed herein  is  the  Corporate  Seal  of  said  Corporation,  and  was  affixed  thereto  by 
me,  and  that  the  foregoing  declaration  was  executed  for  the  by  its 

President  and  Secretary,  pursuant  to  a  resolution  of  the  Board  of 

of  said  Corporation  duly  adopted  on  the  day  of  ,  190     ,  so  help 

me  God. 

Subscribed  and  sworn  to  before  me  this  day  of  ,  190 

POWER  OF  ATTORNEY. 

To  be  executed,  acknowledged,  and  recorded  in  the  office  of  the  Secretary  of 
State  by  a  foreign  Corporation.  Required  under  the  provisions  of  "  An  Act  to 
provide  for  the  licensing  of  domestic  corporations  and  foreign  corporations,  joint 
stock  companies  aud  associations,  etc.,"  approved  February  16,  190o.  before  trans- 
acting business  in  the  State  of  Oregon,  .  .  .  Sec.  6,  p.  44,  Laws  of  1903. 

Know  all  Men  by  these  Presents  : 

That  is  a  Corporation  duly  organized  under  and  by  virtue  of  the 

laws  of  ,  having  its  principal  place  of  business  in  the  ,  and 

a  place  of  business  in  ,  in  the  State  of  Oregon  ; 

That  said  has   made,  constituted,  and  appointed,  and   does   hereby 

make,  constitute,  and  appoint  ,  a  citizen  of  the   United    States,  ami  a 

citizen  and  resident  of  the  State  of  Oregon,  residing  at  ,  Oregon,  and 

whose  place  of  business  is  No.  Street,  its  true  and  lawful  Attorney  in 

Fact  and  authorized  Agent,  for  it,  and  in  its  name,  place,  and  stead  to  make  and 
accept  service  of  all  writs,  processes,  and  summonses  in  any  action,  suit,  or  proceed- 
ing in  any  of  the  courts  of  the  State  of  Oregon,  or  United  States  courts  therein, 

and  upon  whom  all  lawful  writs,  processes,  ami  BU lOnses  may  In-  served  with  the 

same  effect  as  though  the  Company  existed  in  the  State  of  Oregon,  requisite  ami 
necessary  to  give  competent  aud  complete  jurisdiction  of  the  said  to  any 

of  the  said  courts  ; 

Giving  and  Granting  unto  said  full  power  and  authority  to  do  and 

perforin  (•very  act  and  thing  requisite  and  necessary  to  be  done  in  ami  about  the 
premises,  as  fully  to  all  intents  and  purposes  as  the  said  might  or  oould 

785 


INCORPORATION   AND    ORGANIZATION   OP    CORPORATIONS. 

do  if  personally  present,  hereby  ratifying  and  confirming  all  that  the  said 
shall  lawfully  do  or  cause  to  be  done  by  authority  thereof. 

This  Power  of  Attorney  is  irrevocable  except  by  the  substitution  of  another 
qualified  person  for  the  one  hereby  appointed  Attorney  in  Fact. 

In  Witness  Whereof,  said  corporation,  in  pursuance  of  a  resolution  duly  adopted 
by  its  Board  of  ,  has  caused  this  instrument  to  be  executed  in  its  name 

by  its  President  and  Secretary,  and  its  Corporate  Seal  to. 

be  hereto  affixed  the  day  of  ,  190  . 

— —  [seal.] 

—  [seal.] 


President. 


,  Secretary. 
(corporate  seal.) 


[seal.] 


This    Certifies,   that   on  this  day  of  ,  190  ,  before   the 

undersigned,  a  in  and  for  ,  personally  appeared  the  within 

named  ,  the  President,  and  ,  the  Secre- 

tary of  the  ,  the  Corporation  mentioned  in  and  which  executed  the  fore- 

going Power  of  Attorney,  and  acknowledged  that  they  executed  the  same  by  the 
authority  and  on  behalf  of  said  pursuant  to  a  resolution  of  the  Board 

of  of  said  corporation,  duly  adopted  on  the  day  of  , 

190  ;  and  ,the  Secretary  of  said  ,  further  acknowl- 

edged that  the  Corporate  Seal  hereinbefore  attached  and  impressed  herein  is  the 
Corporate  Seal  of  said  Corporation  and  was  affixed  thereto  by  him. 

In  Testimony  Whereof,  1  have  hereunto  set  my  hand  and  seal  this 

day  of  ,  190  . 


[l.  s.] 


CORPORATION  ACKNOWLEDGMENT. 


State  of  > 

County  of  $  ss' 

On  this  day  of  ,  A.  D.  19     ,  before  me,  the  undersigned, 

(name  and  title  of  officer),  in  and  for  the  city  (or  County)  of  ,  personally 

came  A.  B.,  to  me  personally  known  to  be  the  President  (or  other  officer)  of  the 
(name  of  Corporation),  who,  being  duly  sworn,  did  depose  and  say  that  the  seal 
affixed  to  the  foregoing  instrument  as  the  seal  of  the  said  (name  of  Corporation)  is 
the  common  or  corporate  seal  of  the  said  Corporation  ;  that  the  said  seal  was  affixed 
in  his  presence  by  order  of  the  board  of  directors  of  the  said  Corporation,  and  that 
the  said  instrument  was  duly  sealed  and  delivered  as  and  for  the  act  and  deed  of  the 
said  Corporation ;  and  that  he,  as  said  President  (or  other  officer)  of  the  said  Cor- 
poration, and  by  its  order,  acknowledged  that  he  executed  the  same,  for  the  purposes 
therein  expressed. 

Sworn  to  me  and  subscribed  the  day  and  year  aforesaid. 

Witness  my  hand  and  seal,  this  day  of  ,  A.  D.  19     . 


PENNSYLVANIA. 

To  the  Secretary  of  the  Commonwealth  of  Pennsylvania  : 

Sir :  In  pursuance  of  the  Act  of  Assembly  of  Pennsylvania,  approved  April  22, 

1874,  entitled  "An  Act  to  prohibit  foreign  corporations  from  doing  business  in 

Pennsylvania,  without  having  known  places  of  business  and  authorized  agents." 
I,  ,  President  or  Secretary  of  ,  a  Foreign  Corporation  or 

Company,  do  hereby  certify : 

786 


FORMS   AND   PRECEDENTS. 

That  the   title   of  said  Corporation   or   Company  is  .     (Must  be 

full,  correct  corporate  or  company  title.) 

That  it  is  incorporated  or  formed  under  the  laws  of  the  State  of  , 

-with  the  principal  office  at 

The  object  of  said  Corporation  or  Company  is 

The  office  of  said  Corporation  or  Company  in  the  Commonwealth  of  Pennsyl- 
vania has  been  established  at  No.  Street,  in  the  County  of 
in  said  Commonwealth. 
The  name  of  its  duly  authorized  agent  to  transact  its  business  at  said  office  is 

.     (Write  name  plainly.) 
In  Testimony  Whereof,  I  have  hereunto  set  my  hand  and  caused  the  seal  of  said 
company  to  be  affixed,  this  day  of  ,  A.  D.  190     . 

,  President  or  Secretary. 
(corporate  seal.) 

(The  fee  for  filing  this  statement  is  810.75.) 

REGISTRY  OF  FOREIGN  COMPANIES. 

(Excepting  Foreign  Ins.  Co's.) 
Commonwealth  of  Pennsylvania. 

Office  of  the  Company,  190     . 

To  the  Auditor  General  of  Pennsylvania  : 

Sir:  In  addition  to  the  requirements  of  the  Act  of  May  8,  1901,  relating  to 
Foreign  Corporations,  Limited  Partnerships,  and  Joint-Stock  Associations,  and  in 
pursuance  to  an  Act  approved  June  1,  1889,  and  the  several  supplements  thereto, 
the  said  Company  Certifies,  for  Registration  in  your  Department,  the  following  infor- 
mation, viz.  : 

1.  The  name  or  title  of  the  Company  is 

2.  That  it  was  incorporated  or  organized  ,  190  ,  under  the  Laws  of 
the  State  of 

3.  That  its  principal  office  is  located  at 

4.  That  its  office  in  Pennsylvania  is  located  at  ,  and  the  duly  author- 
ized agent  to  transact  business  at  said  office  is 

5.  That  the  object  and  business  of  the  Company  is 

6.  That  its  authorized  Capital  Stock  is  %  .     Paid  in  Capital  % 

7.  That  the  names  and  addresses  of  its  officers  are  as  follows  : 

President  (or  Chairman).  Secretary.  Treasurer  or  Cashier. 

Address.  Address.  Address. 

In  Witness  Whereof,  the  seal  of  the  Company  is  hereto  affixed,  attested  by  the 
signature  of  its  President  (or  chairmai)  and  Secretary  or  Treasurer. 

,  President  (or  Chairman). 
,  Secretary  or  Treasurer- 
(seal  of  company.) 

CORPORATION  ACKNOWLEDGMENT. 

State  of  >  gs 

County  of  ) 

Be  it  remembered  that  on  this  day  of  ,  A.  D.  19     ,  before 

me  (name  and  title),  personally  came  C  D  ,  who  being  duly  sworn  (or  affirmed), 
according  to  law,  doth  depose  and  say  that  lie  was  personally  present  and  did  Bee 
the  common  or  corporate  seal  of  the  above  named  (name  of  Corporation)  affixed  t<> 
the  foregoing  indenture;  that  the  seal  so  affixed  is  the  common  or  corporate  seal 
of  the  said  (name  of  Corporation),  and  was  so  affixed  by  the  authority  of  the  said 

787 


INCORPORATION   AND    ORGANIZATION    OP   CORPORATIONS. 

Corporation  as  the  act  and  deed  thereof;  that  the  above  named  A.  B.  is  the  Presi- 
dent of  the  said  Corporation,  and  did  sign  the  said  indenture  as  such  in  the  presence 
of  this  deponent ;  that  this  deponent  is  the  Secretary  of  the  said  Corporation,  and 
that  the  name  of  this  deponent,  above  signed  in  attestation  of  the  due  execution 
of  the  said  indenture,  is  of  this  deponent's  own  proper  handwriting.  (Signature 
of  Secretary.) 

Sworn  to  and  subscribed  before  me. 

PHILIPPINES. 

CHIEF  OF  THE  DIVISION  OF  ARCHIVES,  PATENTS,  COPYRIGHTS, 
AND  TRADE  MARKS   OF  THE  EXECUTIVE  BUREAU. 

I,  ,  managing  agent  of  the  Company,  a  Corporation  organized 

and  executed  under  the  laws  of  the  State  of  ,  U.  S.  A.,  hereby  make 

application  in  behalf  of  said  Company  for  a  license  to  transact  business  as  a  foreign 
Corporation  within  the  Philippine  Islands,  in  pursuant  thereto  hereby  declared. 

1.  The  corporate  name  of  said  corporation  is  ,  and  the  purpose  for 
which  it  is  organized  is  as  follows : 

2.  Location  of  principal  home  office  is 

3.  Capital  stock  of  the  corporation  of  the  amount  thereon  actually  subscribed 
and  paid  into  the  treasury  on  the  (here  insert  day,  month,  and  year)  is  as 
follows : 

4.  Net  assets  of  corporation  over  and  above  debts,  liabilities,  obligations,  and 
claims  outstanding  and  against  it  on  the  (here  insert  day,  month,  and  year)  are  as 
follows  : 

5.  ,  residing  in  the  city  of  ,  in  the  Philippine  Islands  is 
hereby  designated  and  authorized  to  accept  service  of  summons  in  process  in  all 
legal  proceeding  against  said  Company  and  of  all  notices  affecting  Corporation. 

,  Managing  Agent  of  Company. 
City  or  municipality  of 
Province  of  \-  ss. 

Philippine  Islands 
(acknowledgment.) 

PORTO    RICO. 

Note.  —  Use  general  forms  numbered  1  to  10,  ante. 

RHODE    ISLAND. 

APPOINTMENT  OF  AGENT. 

Know  all  Men  by  these  Presents  :  That  the  ,  a  Corporation 

created  by  and  duly  organized  under  the  laws  of  the  State  of  ,  and  lo- 

cated in  the  of  ,  in  the  State  of  aforesaid,  hereby 

'  constitutes  and  appoints  ,  of  the  of  ,  in  the  State 

of  Rhode  Island  and  Providence  Plantations,  to  be  its  true  and  lawful  attorney,  to 
accept  and  acknowledge  service  of  all  process,  whether  mesne  or  final,  for  and  in 
behalf  of  said  Corporation,  in  any  action  or  proceeding  against  said  Corporation, 
which  may  be  brought  in  any  court  in  the  State  of  Rhode  Island  and  Providence 
Plantations,  including  the  process  of  garnishment,  and  it  is  hereby  admitted  and 
agreed  that  such  service  of  process  aforesaid  shall  be  taken  and  held  to  be  as  valid 
and  sufficient  in  that  behalf  as  if  served  upon  said  Corporation  according  to  the 
laws  of  the  State  of  Rhode  Island,  and  all  claim  or  right  of  error  by  reason  of  such 
service  is  hereby  expressly  waived  and  relinquished.  This  appointment  is  to  con- 
tinue in  force  for  the  period  of  time  and  in  the  manner  provided  by  Chapter  29  of 
the  Court  and  Practice  Act,  and  until  another  attorney  shall  be  substituted  and 
apnointed. 

788 


FORMS    AND    PRECEDENTS. 

In  Testimony  Whereof,  the  Corporation  aforesaid  has  caused  its  name  to  be  hereto 
subscribed  aud  its  corporate  seal  to  be  affixed  by  its  for  that  purpose 

duly  authorized  tliis  day  of  ,190     . 

2^^]^^^^  ^^7  (corporate  seal.) 

State  ) 

County  of  S 

In  the  of  ,  on  this  day  of  ,  190  , 
before  me  personally  appeared  the  above  named  ,  who  is  known  to  me  to 
be  the  of  the  Corporation  above  named,  and  described  in  ami  who  executed 
the  foregoing  instrument,  who,  being  by  me  duly  sworn,  did  depose  and  saj  thai  he 
is  of  the  above  named,  ami  that  lie  knows  the  corporate 
seal  thereof;  that  the  seal  affixed  to  the  foregoing  instrument  is  the  corporate  seal 
of  said  Corporation  and  was  affixed  thereto  by  order  of  the  Hoard  of  Directors  of 
said  Corporation,  and  that  he  has  subscribed  the  name  of  said  Corporation  thereto 
by  the  like  order,  as  of  said  Corporation.         

Subscribed  and  sworn  to  before  me  this  day  of  ,  L90 

,  Notary  Public. 
(notarial  seal.) 

State  of  Rhode  Island,  \ 

Providence,  sc.        ) 

I,  of  the  of  ,  in  said  State,  do  hereby  consent 

to  and  accept  the  foregoing  designation  this  ,  day  ol  .  L90 

State  of  Rhode  Island.  } 
Providence,  sc.        f 

In  the  of  this  day  of  ,  190     ,  personally 

appeared  before  me  the  above  named  ,  who  is  known  to  me  to  be  the 

person  described  in  and  who  executed  the  foregoing  consent  and  acceptance  aud 
acknowledged  that  he  executed  the  same  for  the  purposes  therein  mentioned. 

Before  me, 

,  Notary  Public. 
(notarial  seal.) 

CORPORATION  ACKNOWLEDGMENT. 

State  of  I  ss 

County  of  ) 

Be  it  remembered  that  on  this  day  of  ,  A.  1).  19     ,  before 

me  (name  and  title  of  officer),  personally  appeared  A.  1!.,  the  Presidenl  (or  Treas- 
urer) of  the  (name  of  Corporation),  and  acknowledged  the  foregoing  instrument,  by 
him  signed,  to  be  the  free  and  voluntary  act  of  (name  of  Corporation). 

In  Witness  Whereof,  I  have  set  my  hand  and  seal  at  ,  the  day  and  year 

aforesaid. 

SOUTH   CAROLINA. 

DECLARATION. 

Secretary  of  State,  Columbia,  S.  C. 

Sie:  —  I  hereby  give  notice  thai  the  principal  place  of  business  for  the  (name 
of  Corporation)  — a  Corporation  organized  and  executed  under  the  laws  of  t  In1  State 
of  is  located  at  in  the  city  of  ,  State  of  South 

Carolina,  and  that,  ,  residing  at  ,  iu  the  city  of  .  State 

of  South  Carolina,  is  our  agent  thereat  upon  whom  process  may  lie  ser\rd  m  an\ 
suit,  that    may  be  broughi    against   the  said  Company   within  the  State  of 

South  Carolina.      Done  at  this  day  of  L90 


(i  ORPORATE  SEAL.) 


,  President  of  ( lompany. 
789 


INCORPORATION    AND   ORGANIZATION    OF   CORPORATIONS. 


PROOF  BY  SUBSCRIBING  WITNESS   OF  CORPORATION  DEED. 

State  of  ? 

County  of  $ 

Before  me  (name  and  title  ol  officer),  personally  appeared  C.  D.,  who  being  duly 
sworn,  says  that  he  saw  the  seal  of  the  (name  of  Corporation),  a  body  corporate, 
affixed  to  this  deed,  and  that  the  same  was  then  duly  executed  and  delivered,  and 
that  he,  with  E.  F.,  witnessed  the  execution  thereof. 

(Signature  of  witness  C.  D.) 

Sworn  to  this  day  of  ,  A.  D.  19     . 

SOUTH   DAKOTA. 
APPOINTMENT  OF  RESIDENT  AGENT. 

FOR  

To  all  to  Whom  these  Presents  mat  Come,  Greeting  : 

This  Certifies,  That  ,  a  Corporation  duly  organized  and  incorpo- 

rated under  the  laws  of  the  State  of  ,  has  by  its  board  of  directors  appointed 

and  does  hereby  appoint  ,  residing  at  ,  in  the  County  of 

and  State  of  South  Dakota,  its  agent  resident  in  said  State,  for  the  purposes  here- 
inafter named,  only,  and  he  is  hereby  duly  authorized  to  accept  service  of  process, 
and  upon  whom  service  of  process  may  be  made  in  any  action  in  which  said  Corpo- 
ration may  be  a  party,  and  service  upon  him  shall  be  taken  and  held  as  due  and 
personal  service  upon  said  Corporation. 

hi  Witness  Whereof,  the  said  Corporation,  by  its  board  of  directors,  has  caused 
this  appointment  to  be  signed  by  its  ,  and  its  corporate  seal  to  be  affixed 

thereto  this  day  of  ,  A.  D.  190     . 


By    

State  of  I  sg 

County  of  £ 

On  this  day  of  ,190     ,  befoie  me  a  Notary  Public 

in  and  for  said  county  and  State,  personally  appeared  known  to  me  to  be 

the  of  the  Corporation  that  is  described  in  and  that  executed  the  within 

instruments,  and  acknowledged  to  me  that  such  Corporation  executed  the  same  for 
the  purposes  herein  expressed. 

Witness  my  hand  and  the  seal  of  my  office  this  day  of  ,  A.  D. 

190    . 

,  Notary  Public. 


CORPORATION  ACKNOWLEDGMENT. 
>  ss. 


State  of 
County  of 

On  this  day  of  ,  in  the  year  19     ,  before  me  (name  and  title 

of  officer),  personally  appeared  ,  known  to  me  (or  proved  to  me  on  the 

oath  of  )  to  be  the  President  (or  Secretary)  of  the  corporation  that  is  de- 

scribed in  and  that  executed  the  within  instrument,  and  acknowledged  to  me  that 
such  Corporation  executed  the  same. 


TENNESSEE. 

Notb.  —  Use  general  forms  numbered  1  to  10  inclusive,  ante. 
790 


FORMS    AND    PRECEDENTS. 

CORPORATION  ACKNOWLEDGMENT. 

State  of  ? 

County  of  $ 

Be  it  remembered  that  on  this  day  ,  A.  D.  19     ,  personally 

appeared  before  me  (name  and  title  of  officer  in  full)  of  said  city  (or  county),  the 
within  named  bargainor  (name  of  Corporation)  by  its  President  (or  other  officer, 
naming  him),  with  whom  I  am  personally  acquainted,  who  by  virtue  of  the  authority 
vested  in  him  by  the  board  of  directors  of  said  Corporation,  acknowledged  that  he 
executed  the  within  instrument  for  the  purposes  therein  contained. 

Witness  the  signature  ot  said  Corporation  by  its  President  (or  other  officer),  and 
the  seal  of  the  corporation  thereto  affixed  by  order  of  said  board  of  directors. 
(Name  of  the  Corporation  by  A.  B.,  its  President.) 

(Signature  and  title  of  officer.) 

TEXAS. 

The  State  of  Texas. 

Department  of  State. 

I,  ,  Secretary  of  State  of  the  State  of  Texas,  do  hereby  certify, 

that  a  certified  copy  of  Articles  of  Incorporation  of  incorporated  under 

the  laws  of  the  State  of  with  an  authorized  capital  stock  of  $  ,  was 

filed  in  this  department  on  the  day  of  ,  190     ,  iu  accordance  with  the 

requirements  of  the  laws  of  the  State  of  Texas  ;  and  I  further  certify  that  said  Cor- 
poration, having  paid  the  full  amount  of  fees  and  taxes  prescribed  by  the  laws  of 
this  State,  and  having  complied  fully  with  the  law  in  all  respects,  is  entitled  to,  and 
is  hereby  granted  permission  to  do  business  in  the  State  of  Texas,  to  the  extent  and 
for  the  purposes  as  follows,  to  wit :  for  a  term  of 

ten  (fiscal)  years  ending  May  first,  19     . 

Witness  my  official  signature,  aud  the  seal  of  the  State  of  Texas  affixed,  at  the 
City  of  Austin,  this  the  day  of  A.  D.  1907. 

,  Secretary  of  State. 

APPLICATION  FOR  PERMIT  TO  DO  BUSINESS  IN  THE  STATE  OF 

TEXAS. 

,  duly  incorporated  under  the  laws  of  ,  hereby  makes  appli- 

cation for  permit  to  do  business  in  the  State  of  Texas. 

1.   The  name  of  said  Corporation  is 

2.1  The  permit  it  desires  is  for  the  business  ,  which  said 

business  it  is  permitted  to  do  in  the  State  of  ,  being  the  State  where  it  is 

incorporated,  under  the  laws  of  said  State,  and  which  business  it  is  now  actually 
engaged  in  in  said  State. 

3.  The  home  office  of  said  Company  is  at  and  its  business  in  Texas  is 
to  be  transacted  .  Name  and  address  of  agent  in  Texas  ,  and 
its  principal  place  of  business  and  principal  office  in  2  the  State  of  Texas  is  at 

4.  The  number  of  directors  is  and  the  names  and  residences  of  its 
present  directors  are 

residence     


5.    The  authorized  capital  stock  of  said  Company,  subscribed  or  unsubscribed, 
is  ,  divided  into  shares  of  each. 

i  Purposes  must  be  limited  as  expressed  in  some  one  subdivision  Art.  642,  and  also  author- 
ized by  articles  of  incorporation. 

2  If  incorporated  in  a  foreign  country  and  has  no  principal  office  in  Texas,  then  give  the 
principal  place  of  business  and  principal  oflice  in  the  United  States. 

7!>1 


INCORPORATION    AND    ORGANIZATION    OP    CORPORATIONS. 

This  application  is  accompanied  by  a  copy  of  the  original  articles  of  incorpora- 
tion, together  with  all  amendments  thereto,  of  said  Company,  certified  to  under  the 
hand  and  seal  of  ,  the  keeper  of  the  records  of  articles  of  incorporation  in 

the  said  State  of 

(Must  be  signed  officially  by  President  and  Secretary  or  Board  of  Directors.) 


State  of  } 

County  of  £ 

Personally  before  me  the  undersigned  authority  on  this  day  appeared 

and  known  to  me  to  be  the  persons  whose  names  are  subscribed  to  the 

foregoing  instrument,  who  each  for  himself  acknowledged  to  me  that  he  executed 

the  same  for  the  purpose  and  considerations  therein  expressed,  and  in  the  capacity 

therein  stated.     And  the  said  being  further  duly  sworn  on  oath  says, 

that  the  capital  stock  of  said  Company  subscribed  or  unsubscribed  is  and 

,  ,,    ,    T50%  of  the  same  has  been  subscribed  aud  10%  paid  in.~j  i 
no  more,  and  tnat   l         ,       ill)  j  j  n       i       l  *j  ■ 

|_one  hundred  thousand  dollars  has  been  paid  in.  J 

Witness  my  hand  and  official  seal  ,  this  day  of  ,  A.  D. 

190     . 


(seal.) 
State  of 
The  County  of 

Before  me,  the  undersigned  authority,  duly  empowered  to  take  acknowledgments 
and  administer  oaths  in  said  State  and  County,  on  this  day  personally  appeared 
,  known  to  me,  and  who  having  been  duly  sworn  on  oath  say:  That 
they  are  respectively  (here  insert  office  held  by  each)  of  the  Company,  a 

Corporation  duly  and  legally  incorporated  under  and  by  virtue  of  the  laws  of  the 
State  of 

That  said  Corporation  is  not  a  trust  or  organization  in  restraint  of  trade  in  the 
violation  of  the  laws  of  the  State  of  Texas,  has  not,  within  twelve  months  next  pre- 
ceding the  date  hereof,  become  or  been  a  party  to  any  trust  agreement  of  any  kind 
or  character  whatsoever  which  would  constitute  a  violation  of  any  anti-trust  law  of 
the  State  of  Texas  existing  at  this  date,  and  has  not,  within  that  time,  entered  into 
or  been  in  anywise  a  party  to  any  combination  in  restraint  of  trade  within  the 
United  States  of  America,  and  that  no  officer  of  this  corporation  has,  within  the 
knowledge  of  affiant,  within  twelve  months  next  preceding  the  date  hereof,  made,  on 
behalf  of  such  Corporation  or  for  its  benefit,  any  such  contract  or  entered  into  or 
become  a  party  to  any  such  combination  in  restraint  of  trade. 


Sworn  to  and  subscribed  before  me,  this  the  day  of  ,  A.  D., 

1907,  at 

,  Notary  Public. 

1  Erase  clause  if  not  applicable. 

CORPORATION  ACKNOWLEDGMENT. 

The  instrument  should  end  as  follows :  (Signature)  A.  B.,  President,  &c. 

(corporate  seal.) 
State  of  \ 

County  of  \ 

Before  me  (name  and  character  of  officer),  personally  came  the  (name  of  Cor- 
poration), by  its  President,  A.  B.,  known  to  me  (or  proved  to  me  on  oath  of  C.  D.), 
to  be  the  person  whose  name  is  subscribed  to  the  foregoing  instrument  as  Presi- 
dent, etc.,  and  who  acknowledged  to  me  that  he  executed  the  same  for  the  purposes 
and  consideration  therein  expressed. 

Given  under  my  hand  and  seal  of  office,  this  day  of  ,  A.  D.  19     . 

792 


FORMS    AND    PRECEDENTS. 

UTAH. 
APPOINTMENT  OF  AGENT,   ETC. 

Whereas,  was  duly  incorporated  under  the  laws  of 

on  the  day  of  ,  A.  D.  190  ,  and 

Whereas,  the  said  Corporation  is  now  doing  business,  or  is  desirous  of  doing 
business  within  the  State  of  Utah  ; 

Now  therefore,  be  it  resolved,  by  the  Board  of  Directors  of  the  said  corporation, 
that  the  provisions  of  the  Constitution  of  the  State  of  Utah  arc  hereby  accepted  as 
binding  upon  said  Corporation,  and 

Be  it  further  resolved,  that  ,  residing  in  the  Counfa  of 

in  the  State  of  Utah  that  being  the  county  in  which  the  principal  place  of  business 
of  this  Corporation  is  now,  or  is  about  to  be  situated,  be  and  he  is  hereby  appointed 
the  Attorney  or  Agent  of  said  Corporation  upon  whom  process  issued  by  authority 
of  or  under  any  law  of  the  State  may  be  served. 

We,  ,  President  and  ,  Secretary  of  said  Corporation 

do  hereby  certify  that  the  foregoing  is  a  full,  true,  and  correct  copy  of  a  resolution 
adopted  by  the  Board  of  Directors  of  said  corporation,  on  the  day  of 

A.  D.  190  . 

In  Witness  Whereof,  we  have  subscribed  our  names  and  affixed  the  corporate  seal 
of  said  Corporation  this  day  of  ,  A.  D.  190  . 

,  President. 
,  Secretary. 

CORPORATION  ACKNOWLEDGMENT. 

State  of  >  sg 

County  of  ) 

On  this  day  of  ,  A.  D.  19     ,  before  me  (name  and  title  of  offi- 

cer), in  and  for  the  said  city  (or  County)  of  ,  personally  appeared  A.  B., 

known  to  me  to  be  the  President  of  the  (name  of  Corporation),  the  Corporation  that 
executed  the  within  instrument,  and  acknowledged  to  me  that  such  Corporation 
executed  the.  same  freely  and  voluntarily,  and  for  the  uses  and  purposes  therein 
mentioned. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal,  at 
my  office,  in  the  city  (or  County)  of  ,  the  day  and  year  in  this  certificate 

first  above  written.  (Signature  and  title  of  officer.) 

VIRGINIA. 

POWER  OF  ATTORNEY. 

For  Appointment  op  Agent  ry  a  Foreign  Corporation,  doing  business  in 
Virginia,  under  Section  1104,  Code  op  1887,  as  amended. 

Know  all  Men  by   these  Presents-.   That  the  ,  a   Cor- 

poration organized  and  existing  under  the  laws  of  the  State  of  ,  having 

established  an  office  in  the  State  of  Virginia,  the  same  to  be  located  at 
in  the  said  State,  and  desiring  to  transact   business  in  the  Slate  ol   Virginia  in  con- 
formity with  the  laws  thereof,  hereby  constitutes  and  appoints,  with  his  consent 
ami  acceptance  first  obtained,  ,  resident   of   Virginia,   residing  at 

,  Virginia,  to  be  the  true  and  lawful  agent  and  attorney  of  Baid  Cor- 
poration in  and  for  the  said  Commonwealth  of  Virginia  pursuant  to  the  provisions 
section  1104  of  the  Code  of  Virginia,  as  amended,  upon  whom  all  legal  process 

against  said  Company  may  be  served,  and  who  is  hereby  authorized  lo  enter  an  ap- 
pearance in  its  behalf  in  any  actions  and  proceedings;  and  the  said  Corporation 
hereby  stipulates  and  agrees' that  any  lawful   process  against  the  said   Corporation 

793 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS. 

which  is  duly  served  on  said  agent  and  attorney  shall  be  of  the  same  legal  force  and 
validity  as  if  served  on  said  corporation. 

In  Witness  Whereof,  the  said  has  executed  this  power  of  attorney  in 

duplicate  by  causing  its  name  to  be  hereunto  affixed  by  ,  its  President, 

with  its  corporate  seal  attested  by  ,  its  Secretary.     All  done  this 

day  of  ,  190  . 

By  ,  President. 

Affix  corporate  seal  here. 

Attest :  ,  Secretary. 


State  of 

City  (or  County)  of 

I  ,  a  Notary  Public  in  and  for  the  State  and  city  or  county  afore- 

said,'hereby  certify  that  ,  and  whose  names,  respec- 

tively, as  President  and  Secretary  of  the  Company,  are  signed  to  the 

foregoing  power  of  attorney,  have  acknowledged  the  same  before  me  in  my  city  or 
county  aforesaid. 

Given  under  my  hand  and  official  seal  this  day  of  ,  190  . 

,  Notary  Public 
Affix  corporate  seal  here. 

CORPORATION  ACKNOWLEDGMENT. 

State  of  >  ss> 

County  £ 

I  (name  and  title  of  officer)  in  the  State  of  ,  do  certify  that  A.  B., 

whose  name  is  signed  to  the  writing  above,  bearing  date  the  day  of  , 

A.  D.  19  ,  has  acknowledged  the  same  before  me  in  my  city  aforesaid,  and  1,  the 
said  (name  and  title  of  officer),  do  hereby  certify  that  the  said  A.  B  ,  President  of 
(name  of  Corporation),  of  the  city  of  ,  has  this  day  acknowledged  before  me, 

in  my  city  aforesaid,  that  the  seal  attached  to  the  said  writing  is  the  corporate  seal 
of  the  said  Corporation,  and  that  the  said  writing  is  the  act  and  deed  of  the  said 
Corporation. 

Given  under  my  hand,  the  day  of  ,  A.  D.  19 

VERMONT. 

Returns  by  the  Company,  for  the  purpose  of  registration  in  the 

State  of  Vermont, 

The  Company,  a  Corporation  created  and  existing  under  and  by  virtue 

of  the  laws  of  ,  and  having  its  principal  office  or  place  of  business  at  No. 

Street,  in  the  of  in  the  County  of 

and  State  of  hereby  represents  that  upon  the  issuance  to  it  by  the  Sec- 

retary of  State  of  the  proper  certificate  authorizing  it  to  do  business  in  the  State  of 
Vermont,  it  proposes  to  therein  engage  in  the  business  of 

Pursuant  to  the  provisions  of  the  statute  in  such  case  made  and  provided,  said 
Corporation  herewith  files  a  copy  in  the  English  language  of  its  charter  or  articles 
of  association  which  is  hereby  referred  to  and  made  a  part  hereof;  and  hereby  rep- 
resents that  its  principal  office  in  the  State  of  Vermont  is  to  be  located  at 
in  the  County  of 

Said  Corporation  hereby  designates  and  appoints  ,  a  residVnt  of 

in  the  County  of  and  State  of  Vermont,  whose  office  or 

place  of  business  shall  be  located  at  said  ,  as  a  person  upon  whom 

process  against  said  Corporation  may  be  served  within  the  State  of  Vermont,  and 
to  whom  all  notices  relating  to  corporate  taxation  under  the  provisions  of  the  laws 
of  Vermont,  shall  be  delivered. 

794 


FORMS   AND    PRECEDENTS. 

In   Witness  Whereof,  at  in  the  County  of  and  State  of 

,  A.  U.  19  ,  said  corporation  doth  hereunto  cause  its  corporate  name 
to  be  subscribed  and  its  corporate  seal  to  be  affixed  by  ,  its  , 

■who  is  by  said  Corporation  duly  authorized  so  to  do. 

Affix  corporate  seal 


IU 


I,  ,   of  ,    in   the    County   of  and   State   of 

,  on  oath  depose  and  say  that  the  foregoing  is  a  true  and  examined  copy 
of  the1  with  all  the  amendments  and  additions  thereto,  under  which 

the  said  Company  is  organized  and  now  operating. 


State  of  ) 

County  of  j  ss' 

At  in  said  County,  on  this  day  of  ,  A.  D.  19     , 

personally  appeared  and  made  oath  in  due  form  of  law  that  the  fore- 

going affidavit  by  him  subscribed  is  true. 

Before  me, 


Retain  one  copy  of  this  statement :  forward  one  to  the  Secretary  of  State,  and 
one  to  the  Commissioner  of  State  Taxes. 

The  required  fee  of  two  dollars  payable  to  the  Secretary  of  State,  and  a  like  sum 
payable  to  the  Commissioner  of  State  Taxes  must  accompany  this  statement. 


1  Insert  here  the  words  "charter"  or  "articles  of  association." 


CORPORATION  ACKNOWLEDGMENT. 

State  of  ) 

County  | 

At  this  day  ot  ,  19     ,  personally  appeared 

,  who  has  executed  the  foregoing  written  instrument  as  the  duly  author- 
ized agent  of  and  acknowledged  the  same  to  be  the  free  act  and  deed 
of  said  Corporation,  and  that  he,  as  such  agent,  freely  executed  the  same. 

Before  me,  (Signature  aud  title.) 

Proof  by  Subscribing  Witness : 


WASHINGTON. 

POWER  OF  ATTORNEY. 

Know  all  Men  by  these  Presents  :  That  ,  of  ,  having 

■been  admitted,  or  having  applied  for  admission,  to  transact  business  in  the  State  of 
Washington,  in  conformity  with  the  laws  thereof,  does  hereby  make,  constitute,  ami 
appoint  to  reside  at  the  city  of  ,  County  of  ,  the 

principal  place  of  business  of  said  Corporation  in  the  State  of  Washington,  its  true 
and  lawful  attorney,  in  and  for  the  State  of  Washington,  on  whom  all  process  <>f 
law  against  said  may  be  served  in  any  action  or  special  proceeding  against 

the  said  in  the  State  of  Washington,  subject  to  and  in  accordance  with 

all  the  provisions  of  the  statutes  and  laws  of  said  Slate  of  Washington  now  in  lone, 
and  such  other  acts  as  may  be  hereafter  passed  amendatory  thereof  and  supplemen- 
tary thereto.    And  the  attorney  is  hereby  duly  authorized  ami  empowered,  as  the 

iagent  of  said  ,  to  receive  and  accept  service  of  process  in  all  cases  provided 

795 


INCORPORATION   AND    ORGANIZATION   OF   CORPORATIONS. 

for  by  the  laws  of  the  State  of  Washington,  and  such  service  shall  be  deemed  valid 
personal  service  upon  said  .     This  appointment  is  to  continue  in  force 

for  the  period  of  time  and  in  the  manner  provided  by  the  statutes  of  the  State  of 
Washington,  and  until  another  attorney  shall  be  duly  and  regularly  substituted. 

In  Wit?iess  Whereof,  the  said  ,  in  accordance  with  a  resolution  of  its 

Board  of  Directors,  duly  passed  on  the  day  of  ,  A.  D  190     , 

has  to  these  presents  affixed  its  corporate  seal  and  caused  the  same  to  be  subscribed 
and  attested  by  its  President  and  Secretary  at  ,  in  the  State  of  , 

on  the  day  of  ,  190     . 

,  President. 
,  Secretary. 

State  of  )  gs> 

County  of  > 

On  this  day  of  ,  A.  D.  190     ,  before  me,  the  undersigned, 

a  for  the  duly  and  qualified  to  take  the  proof  and 

acknowledgments  of  deeds  and  other  instruments,  came  ,  President,  and 

,  Secretary  of  ,  to  me  personally  known  to  be  the  persons 

described  in  and  who  executed  the  foregoing  instrument ;  and  that  they  each  duly 
acknowledged  the  execution  thereof ;  and  being  by  me  each  duly  sworn,  severally 
saith  that  they  are  the  said  officers  of  the  aforesaid,  and  that  the  seal 

affixed  to  the  foregoing  instrument  is  the  corporate  seal  of  said  ,  and  that 

the  said  corporate  seal,  and  their  signatures  as  such  officers,  were  duly  affixed  and 
subscribed  to  the  said  instrument  by  the  authority  and  direction  of  said  Corporation, 
and  for  the  uses  and  purposes  therein  mentioned. 

In  Testimony  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal, 
at  ,  the  day  and  year  first  above  written. 


WEST   VIRGINIA. 
FOREIGN  CORPORATIONS. 

In  order  to  do  business  in  West  Virginia,  a  foreign  Corporation  must  take  the 

following  steps :  .  .    .  . 

1  Pile  a  certified  copv  of  its  charter,  or  of  its  articles  of  association,  with  the 
Secretary  of  State  of  West"  Virginia.  This  copy  may  be  certified  as  correct  by  the 
Secretary  of  State  or  other  officer  who  issued  the  original,  of  the  State  by  which  the 
Corporation  was  incorporated ;  or  it  may  be  certified  by  the  President  of  the  Corpo- 
ration, under  his  hand  and  the  seal  of  the  Corporation,  and  attested  by  the  Secretary 
of  the' Corporation;  aud  such  certificate  may  be  in  this  form  : 

I  ,  President  of  the  Company,  a  corporation  created  and 

organized  under  the  laws  of  the  State  of  ,  do  hereby  certify  to  the  Secre- 

tary of  State  of  the  State  of  West  Virginia,  that  the  foregoing  and  annexed  is  a  full, 
true,  and  correct  statement  of  the  certificate  of  incorporation  or  articles  of  associa- 
tion,' as  the  case  may  be,  with  all  amendments  and  additions  thereto,  of  the  said 
corporation.  , 

Given  under  my  hand  and  the  seal  of  said  corporation,  this  day 

(SEAL.)      '  ,  President  of  Company. 

Correct  — Attest;  ,  Secretary  of  Company. 

2.  A  copy  of  the  charter,  or  of  the  articles  of  association,  certified  as  aforesaid, 
must  also  be  filed  and  recorded  in  the  office  of  the  clerk  of  the  county  court  of  the 
county,  or  one  of  the  counties  of  West  Virginia  in  which  the  Corporation  conducts 
busiuess.  The  proper  county  in  which  to  file  and  record  this  copy  would  seem  to 
be  that  county  in  which  the  Corporation  may  have  a  branch  office  in  this  State,  or  in 
which  it  makes  its  headquarters  in  this  State,  or  in  some  county  in  which  it  does,  or 
will  do  business.  . 

It  will  be  seen  that  two  certified  copies  of  the  charter,  or  of  the  articles  of  asso- 

796 


FORMS    AND    PRECEDENTS. 

ciation,  are  required:  one  to  file  in  the  Secretary  of  State's  office,  and  one  to  file  and 
record  in  the  county  clerk's  office. 

3.  The  Corporation  must  also  file  in  the  Secretary  of  State's  office  a  writing  of 
acceptance  of  section  30  of  chapter  54  of  the  Code  of  West  Virginia  before  he  is 
authorized  to  issue  his  certificate.  Such  certificate  of  acceptance  may  be  in  this 
form  : 

I,  ,  President  of  the  Company,  a  Corporation  created  aud 

organized  under  the  laws  of  the  State  of  West  Virginia  that  at  a  meeting  of  the 
board  of  directors  (or  other  governing  body  of  the  Corporation)  of  said  Corporation 
regularly  held  at  the  office  of  the  Corporation  on  the  day  of 

the  following  resolution  was  adopted: 

Resolved,  by  the  Board  of  Directors  of  the  Company,  a  Corporation 

created  and  organized  under  the  laws  of  the  State  of  ,  That,  whereas  said 

Corporation  desires  authority  to  hold  property  and  transact  business  in  the  State  of 
West  Virginia,  the  said  Corporation  hereby  accepts  the  provisions  of  section  30  of 
the  chapter  54  of  the  Code  of  West  Virginia  and  agrees  to  be  governed  thereby . 

Given  under  my  hand  and  the  seal  of  said  Corporation  this  day 

of 

(seal.)  ,  President  of  Company. 

4.  The  Corporation  must  also  file  with  the  Secretary  of  State  the  preliminary 
report  required  in  section  2,  upon  which  to  base  the  assessment  of  its  initial  license 
tax  for  the  current  license-tax  year.  The  form  of  this  report  will  be  furnished  on 
application  to  the  Secretary  of  State.  It  must  pay  such  tax  to  the  Secretary  of 
State  before  it  can  be  admitted  into  the  State. 

5.  The  Corporation  must  also  appoint  an  attorney  of  record,  usually  called 
"  Statutory  Attorney." 

G.  On  receipt  of  the  certified  copy  of  charter,  the  certificate  of  acceptance  of 
the  law,  and  the  preliminary  report,  the  Secretary  of  State  will  issue  a  certificate  of 
attorney  to  the  Corporation,  winch  will  be  the  evidence  of  its  compliance  with  the 
law  and  of  its  authority  to  hold  the  property  and  transact  business  in  the  State  of 
West  Virginia.  This  certificate  of  authority  must  be  filed  and  recorded  in  the  said 
county  clerk's  office  of  the  county  in  which  the  certified  copy  of  the  charter  is  filed 
and  recorded  as  referred  to  in  section  1.  As  the  Corporation  must  file  and  record 
in  the  county  clerk's  office  the  certificate  of  authority  of  the  Secretary  of  State  ami 
as  each  corporation  will  doubtless  want  one  also  in  its  own  possession  it  would  seem 
that  two  such  certificates  of  the  Secretary  of  State  would  be  needed.  The  costs  of 
the  proceedings  in  the  Secretary  of  State's  office  are  as  follows  : 

For  two  certificates  of  authority $10.00 

For  filing  and  recording  the  certificate  of  acceptance    .         1.00 


$11.00 
The  other  costs  are  :  recording  the  copy  of  charter  and  the  certificate  of  author- 
ity in  the  county  clerk's  office,  82.50  for  charter,  and  $1.00   for  the  certificate, 
making  .S3. 50. 

(Two  copies  of  this  Report  should  be  made  at  the  time  of  making  application 
to  be  authorized  to  do  business  in  this  State.) 

APPLICATION  AND   PRELIMINARY  REPORT. 

OF   THE 

Company, 

TO 

Secretary  of  Statk  ok  West   Yikcinia 
For  the  Current  Year  ending  June  30,  190     . 

The  Company,  a  Corporation  incorporated  under  I  lie  laws  of  the  State 

of  ,  on  tin;  dav  of  ,  hereby  applies  In  I  lie  Secretary 

of  State  of  the  State  of  West  Virginia,  under  the  provisions  of  Section  :\n  of  Chapter 

797 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS. 

54  of  the  Code,  for  a  certificate  of  authority  to  hold  property  and  transact  easiness 
in  the  State  of  West  Virginia;  and  pursuant  to  the  requirements  of  section  131  of 
Chapter  32  of  the  Code,  as  amended  by  the  Acts  of  1907,  submits  the  following- 
preliminary  report. 

The  post-office  address  of  its  principal  office  is 

The  name  and  post-office  address  of  the  President  is 

Name  and  post-office  address  of  the  Secretary  is 

The  number  of  shares  of  its  authorized  capital  stock  is  ;  the  par  value 

of  each  share  is  $  ,  the  number  of  shares  of  such  capital  stock  issued  and 

outstanding  is  ,  amounting  to  $ 

(1)  The  value  of  its  property  owned  in  the  State  of  West  Virginia  is  $  , 
situated  and  composed  of  as  follows  : 

(2)  The  value  of  its  property  it  expects  to  have  in  the  State  of  West  Virginia 
during  the  license-tax  year  ending  June  30,  190  ,  and  where  it  will  be  situated  and 
of  what  it  will  consist  are  as  follows : 

(3)  The  number  of  acres  of  laud  it  holds  in  the  State  of  West  Virginia  is 
acres. 

(4)  The  value  of  its  property  owned  and  used  outside  of  the  State  of  West  Vir- 
ginia is  $ 

(5)  The  proportion  of  its  capital  stock  which  is  represented  by  property  owned 
in  the  State  of  West  Virginia  is  per  cent. 

(6)  The  assessed  value  of  its  property  located  in  the  State  of  West  Virginia  is 
$  located  and  assessed  as  follows  : 

I,  ,  do  solemnly  swear  that  the  foregoing  report  is  true  to  the  best  of 

my  knowledge  and  belief. 

Given  under  my  baud  and  the  corporate  seal  of  said  corporation  this  day 

of 


(corporate  seal) 


Subscribed  and  sworn  to  before  me,  a  ,  in  and  for  ,  this 

day  of  190     ,  in  my  county  aforesaid. 


(official  seal)  

License  tax  assessed  for  the  year  ending  June  30,  190     ,  $ 
License  tax  assessed  for  the  year  ending  June  30,  190     ,  $ 

,  Secretary. 
By  ,  Chief  Clerk. 

Notes.  —  If  the  property  at  (1)  is  the  same  as  that  at  (6)  the  blank  at  (6)  only  need  be 
filled  up.  At  (2)  state  carefully  value  of  property  the  corporation  expects  to  have  in  the 
State,  where  it  will  be  situated,  and  describe  the  kind  of  property. 


REPORT  BY  FOREIGN  CORPORATION. 

(Fee  for  indorsing  and  filing  above  report  is  one  dollar,  which  must 
accompany  report.) 

To  the  Secretary  of  State  of  West  Virginia  : 

The  Board  of  Directors  of  Company,  in  obedience  to  section  46  of 

Chapter  53  of  the  Code,  hereby  submit  the  following  report : 

The  name  of  the  President  of  such  Corporation  is  ,  and  his  post-office 

address  is  ,  and  he  was  elected  on  ,  19     . 

The  name  of  the  Secretary  is  ,  and  his  post-office  address  is 

,  and  he  was  elected  on  ,  19     . 

The  post-office  address  of  the  principal  office  is  :  No. 

798 


FORiMS    AND    PRECEDENTS. 

Given  under  our  hands  and  the  seal  of  said  Corporation  the  dav  of  , 

19     . 

The  Board  of  Directors 

of  Co. 

(seal.)  *By 

*  Sign  here  by  the  President,  Secretary, 
or  other  executive  officer. 

Filed  in  the  Secretary  of  State's  office  ,  190     . 

Secretary  of  Stair. 
By    '    ■ 

Know  all  Men  by  these  Presents  :  That  ,  a  foreign  Corporation, 

incorporated  and  organized  under  the  laws  of  the  State  of  ,  and  in  con- 

formity therewith,  has  made,  constituted,  and  appointed  and  by  these  presents  doth 
make,  constitute,  and  appoint  ,  residing  at  the  City  of  in  the 

State  of  West  Virginia,  for  it  and  on  its  behalf,  attorney  in  fact,  to  accept  service 
of  process  and  notice  in  said  State  for  such  Corporation,  and  said  Corporation  by 
these  presents  doth  declare  its  consent  that  service  of  any  process  or  notice  in  said 
State  on  said  attorney  in  fact,  or  his  acceptance  thereof  endorsed  thereon,  shall 
be  equivalent  for  all  purposes  to,  and  shall  be  and  constitute  due  and  legal  service 
upon  said  Corporation. 

In  Witness  Whereof,  The  has  signed  these  presents  by  its  President 

and  caused  the  corporate  seal  of  said  Corporation  to  be  hereunto  affixed  this 
day  of  ,  190     . 

By  ,  President. 

(seal  of  corporation.) 

The  post-office  address  of  this  Corporation  is : 

No.        Street. 
City. 
State. 
Care  of 

CORPORATION  ACKNOWLEDGMENT. 

%t&t\oi  .  Ito-wit: 

County  of  ) 

I,  ,  a  notary  public  in  and  for  the  county  and  State  aforesaid,  do 

certify  that  personally  appeared  before  me  in  my  said  county,  and  being 

by  me  duly  sworn,  did  depose  and  say,  that  he  is  the  President,  of  the  Corporation 
described  in  writing  above,  bearing  date  the  day  of  ,  190  _  , 

authorized  by  said  Corporation  to  execute  and  acknowledge  deeds  and  other  writ 
ings  of  said  Corporation,  and  that  the  seal  affixed  to  said  writing  is  the  corporate 
seal  of  said  Corporation,  and  that  said  writing  was  signed  and  sealed  by  him,  in  be- 
half of  said  Corporation  by  its  authority  duly  given.     And  the  said 
acknowledged  the  said  writing  to  be  the  act  and  deed  of  said  Corporation. 

Given  under  my  hand  and  official  seal  this  day  of  ,  190     . 

,  Notary  Public. 

(notary  seal.) 

WISCONSIN. 

STATEMENT  OF  FOREIGN  CORPORATIONS  IN  ACCORDANCE 
WITH  THE  PROVISIONS  OF  CHAPTER  506  OF  THE  LAWS  OF 
WISCONSIN,    FOR  THE  YEAR  1905. 

State  of  }  ss 

County  of  J  ,  . 

,  being  first  duly  sworn,  on  oath  says  that  he  is  the 
of  the  ,  a  Corporation  organized  under  the  laws  of  the  State  of 

799 


INCORPORATION    AND    ORGANIZATION   OP   CORPORATIONS. 

1.  That  the  name  of  such  Corporation  is  ,  and  the  location  of  its 
principal  office  or  place  of  business  without  the  State  of  Wisconsin,  is 

Street  ,  in  the  County  of  State  of  ;  that  its  prin- 

cipal office  or  place  of  business  within  the  State  of  Wisconsin,  is  Street, 

County  of 

2.  That  the  names  and  addresses  of  the  officers  of  such  Corporation  are  as 
follows : 

Office.  Name.  Address. 


That  the  name  and  address  of  the  agent  or  manager  of  such  Corporation  who 
shall  represent  such  corporation  in  the  State  of  Wisconsin  is 

3.  That   the   amount   of  capital   stock  paid  in  money,  property,  or  services 

4.  That  the  nature  of  the  business  to  be  transacted  in  the  State  of  Wisconsin 
is  as  follows : 

5.  That  the  proportion  of  the  capital  stock  represented  in  the  State  of  Wis- 
consin, by  its  property  located  or  to  be  acquired  therein  and  by  its  business  to  be 
transacted  therein,  is  $ 

6.  That  the  said  Corporation  acting  herein  by  this  affiant,  duly  authorized  there- 
unto, by  these  presents  constitutes  and  appoints  the  Secretary  of  State  and  the 
Assistant  Secretary  of  State  of  the  State  of  Wisconsin,  ai  d  their  successors  in  office, 
its  true  and  lawful  attorneys  upon  whom  all  summons,  notices,  pleadings,  and  pro- 
cesses, in  any  action  or  proceeding  against  such  Corporation,  shall  be  served.  And 
such  Corporation  hereby  agrees  that  such  service  on  the  said  attorneys  shall  be  of 
the  same  legal  force  and  effect  and  validity  as  if  served  on  the  Corporation,  and  that 
such  appointment  shall  continue  in  force  and  effect  as  long  as  any  liability  remains 
outstanding  against  such  Corporation  in  the  State  of  Wisconsin. 

7.  That  such  Corporation  was  legally  authorized  to  transact  business  in  the  State 
wherein  incorporated  ,  and  is  at  the  date  hereof  so  authorized. 

8.  That  such  Corporation  has  not  entered  into  any  combination,  conspiracy, 
trust,  pool,  agreement,  or  contract  intended  to  restrain  or  prevent  competition  in  the 
supply  or  price  of  any  article  or  commodity  in  general  use  in  the  State  of  Wiscon- 
sin, or  constituting  a  subject  of  trade  or  commerce  therein,  or  which  shall  in  any 
manner  control  the  price  of  any  such  article  or  commodity,  fix  the  price  thereof, 
limit  or  fix  the  amount  or  quantity  thereof  to  be  manufactured,  mined,  produced,  or 
sold  in  said  State,  or  fix  any  standard  or  figure  by  which  its  price  to  the  public  shall 
be  in  any  manner  controlled  or  established. 

9.  That  such  Corporation  will  comply  with  all  the  laws  of  the  State  of  Wiscon- 
sin, relating  to  foreign  Corporations. 

Dated  ,190     . 

Subscribed  and  sworn  to  before  me  this  day  of  ,  190     . 

,  Notary  Public. 


FORM  OF  ACKNOWLEDGMENT  FOR  A  CORPORATION. 

State  of  Wisconsin,  ) 
County.  $ 
Personally  came  before  me,  this  day  of  ,  19     ,  A.  B.,  the 

(title  of  officer)  of  the  (name  of  Corporation),  a  Corporation,  to  me  known  to  be  the 
person  who,  as  such  officer,  executed  the  foregoing  (or  within)  instrument  in 
the  name  of  said  Corporation  and  who  affixed  its  corporate  seal  thereto,  and 
acknowledged  said  instrument  as  the  duly  authorized  act  of  said  Corporation. 
(A.dd  similar  acknowledgment  by  countersigning  officer,  if  any.) 

(Insert  designation  of  officer.) 

800 


FORMS   AND    PRECEDENTS. 

WYOMING. 

Note.  —  Use  general  forms  numbered  1  to  10,  ante. 
CORPORATION  ACKNOWLEDGMENT. 

State  of  I  gs 

Couuty  of  J     *  • 

Be  it  remembered  tbat  on  this  day  of  ,  A.  D.  19     ,  before 

me  (name  and  style  of  officer),  duly  commissioned  and  qualified  at  the  city  (or 
county)  aforesaid,  personally  came  the  (name  of  Corporation),  by  its  President, 
A.  B.,  who  is  personally  known  to  me  (or  proved  to  me  on  the  oath  of  C.  D.)  to 
be  the  same  person  whose  name  is  subscribed  to  the  foregoing  indenture  of  writing 
as  President  of  the  (name  of  Corporation),  and  who  acknowledged  the  same  to  be 
the  act  and  deed  of  the  said  Corporation,  for  the  purposes  therein  mentioned. 

In  Witness  Whereof,  I  do  hereby  set  my  hand  and  affix  my  official  seal,  the  day 
and  year  last  above  written. 

(Signature  and  title.) 


801 


INCORPORATION   AND   ORGANIZATION    OF   CORPORATIONS. 


FORMS   FOR   AMENDMENTS   TO   CHARTERS. 


FORM  OF  RESOLUTION  FOR  STOCKHOLDERS'  MEETING  AUTHOR- 
IZING AMENDMENT  OF  CERTIFICATE  OF  INCORPORATION. 

Resolved,  That  section  of  the  certificate  of  incorporation  of  the 

Company,  reading  as  follows  (here  insert  original  text  from  the  clause  of 
the  certificate  of  which  amendment  is  desired)  be  and  the  same  hereby  is  amended 
to  read  as  follows :  (here  insert  clause  as  amended). 

RESOLUTION  DECREASING  CAPITAL  STOCK. 

Resolved,  that  the  authorized  capital  stock  of  Company  be  increased 

(or  reduced)  from  shares  of  the  par  value  of  dollars  each,  to 

shares  of  the  par  value  of  dollars  each,  so  that  the  authorized 

capital  stock  of  said  corporation  shall  hereafter  be  dollars  instead  of 

dollars  as  heretofore. 

RESOLUTION  TO  AUTHORIZE  THE  HOLDING  OF  MORE  THAN 
100,000  ACRES   OF   LAND  IN  WEST  VIRGINIA. 

Resolved,  that  this  corporation  desires  to  hold  not  exceeding  acres 

of  land  in  West  Virginia,  which  is  acres  in  excess  of  the  number  it  is 

now  authorized  to  hold  in  said  State. 

RESOLUTION  BY  DIRECTORS  DIRECTING  THE  CALLING  OF  A 
MEETING  OF  STOCKHOLDERS  TO  VOTE  UPON  A  PROPOSED 
AMENDMENT   TO   CHARTER. 

Be  it  Resolved,  By  the  Board  of  Directors  of  the  Company  at  a  meet- 

ing duly  convened  at  the  office  of  the  Company  in  the  City  of  ,  State  of 

,  that  it  is  desirable  that  the  certificate  of  incorporation  (or  charter  or 
articles  of  incorporation  or  association,  as  the  case  may  be)  should  be  amended  in 
the  following  respects,  to  wit:  (here  insert  nature  of  proposed  amendments). 

Now,  therefore,  be  it  Resolved,  by  said  Board  of  Directors  that  a  meeting  of  the 
stockholders  of  this  Company  be  duly  called  and  convened  at  the  office  of  the  Com- 
pany in  the  City  of  ,  State  of  ,  on  the  day  of  , 
190  ,  for  the  purpose  of  voting  upon  a  resolution  that  will  then  be  formally  pre- 
sented to  them  by  the  President  of  this  Company  for  and  in  behalf  of  its  Board  of 
Directors,  providing  for  amending  the  certificate  of  incorporation  (charter,  articles 
of  incorporation  or  association,  as  the  case  may  be)  in  the  following  respects,  to  wit : 

(Here  insert  proposed  amendments  in  full.) 

NOTICE  OF  MEETING  TO  AUTHORIZE  ISSUANCE  OF  PREFERRED 

STOCK. 

New  York,  December      ,  190  . 

A  special  meeting  of  the  stockholders  of  ,  a  corporation,  will  be  held  on 

the  day  of  December,  190  ,  at  twelve  o'clock  noon,  at  the  office  of  such 

corporation,  at  Nos.  Street,  Borough  of  ,  City  of  ,  for 

the  purpose  of  voting  upon  a  proposition  to  increase  the  capital  stock  of  said  cor- 
poration from  five  hundred  thousand  dollars,  consisting  of  five  thousand  shares  of 
the  par  value  of  one  hundred  dollars  each,  of  which  twenty-five  hundred  shares  is 
preferred  stock  and  twenty-five  hundred  shares  is  common  stock,  to  six  hundred 
thousand  dollars,  to  consist  of  six  thousand  shares  of  the  par  value  of  one  hundred 

802 


FORMS   AND   PRECEDENTS. 

dollars  each,  of  -which  twenty-five  hundred  shares  shall  he  preferred  stock  and 
thirty-five  hundred  shares  shall  be  common  stock  ;  the  rights  attached  to  the  two 
classes  of  stock  to  be  as  stated  in  the  certificate  of  incorporation  of  such  corpora- 
tion, to  -wit: — the  preferred  stock  shall  be  entitled  to  the  following  preferences  and 
dividends,  viz.,  in  case  of  a  dissolution  of  the  corporation,  the    preferred  stork- 
holders  shall  be  paid  par  in  full  for  their  stock  before  any  dividend  is  paid  upon  the 
common  stock;  the  preferred  stockholders  shall  also  be  entitled  to  a  dividend  of 
per  cent  per  annum,  each  year,  before  any  dividend  is  declared   upon  th< 
mon  stock,  the  preferences  to  be  determined  by  the  earnings  of  each  year,  and  if  in 
any  year  the  earnings  are  not  sufficient  to  pay  such  dividend  upon  the  preferred 
stock,  then  the  same  shall  be  made  up  out  of  the  earnings  of  the  subsequent  years 
before  any  dividend  shall  be  declared  upon  the  common  stock;  the  common 
shall  be  entitled  to  all  dividends  and  earnings  after  the  dividends  on  the  preferred 
stock  are  paid. 

,  J' 

,  Secretary. 


Majority  of  Board  of  Directors. 

FORM  OF  CERTIFICATE  RELATIVE  TO  AMENDMENT. 

I,  ,  President  of  the  Company,  a  corporation  created 

and  organized  under  the  laws  of  the  State  of  ,  do  hereby  certify  to  t  he 

Secretary  of  State  of  the  State  of  ,  that  at  a  meeting  of  the  stockholders 

of  said  corporation,  regularly  held  in  accordance  with  the  requirements  of  the  laws 
of  said  State,  at  the  office  of  said  corporation  in  the  City  of  ,  State  of 

,  on  the  day  of  ,  190     ,  at  which  meeting  (here  state 

■what  proportion  of  the  stock  was  represented),  of  the  stock  of  said  company  was 
represented  by  the  holders  thereof  in  person  or  by  proxy,  and  voted  for  the  follow 
ing  resolution,  and  that  the  same  was  duly,  regularly  adopted  and  passed,  to  wit : 
(here  state  the  resolution  adopted). 

Given  under  my  hand  and  the  seal  of  this  corporation. 

,  President  of  the 
Company. 
(seal.) 

Arizona  Form. 

AMENDMENT  TO  ARTICLES   OF  INCORPORATION  OF  THE 


Company. 


^&}  t  and  ,  President  and  Secretary,  respectively,  of 

the  Company,  a  Corporation  organized  and  existing  under  the  laws 

of  the  Territory  of  Arizona,  hereby  certify  that,  said  Corporation  at  a  special  meeting 
of  the  stockholders  of  said  Company,  held  at  its  office  in  the  City  of  Phoenix,  Ter- 
ritory of  Arizona,  on  the  23d  day  of  January,  1907,  amended  Article  "  Fifth  of 
the  Articles  of  Incorporation  so  as  to  read  as  follows  : 

Fifth. 

(Here  insert  article  as  amended.) 

We  further  certify  that  there  were  subscribed  and  outstanding  ai   said  date 

shares  of  common  stock  of  said   Company  and  no  more,  and  thai    thi 

vote  by   which  said  amendment   was  adopted    was         _  votes   in   fayoi 

thereof  and  OOne  against,  being  more  than  two-thirds  of  the  stock  outstanding 
voting  in  favor  of  the  said  amendment. 

'     We  further  certify  that  said  meeting  was  regularly  called,  and  I  ha!  due  and 

lotral  notice  of  I  he  proposed  amendment   had  been  given,  and  that   the  attached  copy 

*  -  so;; 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

rof  notice  is  a  true  copy  of  the  notice  that  was  served  upon  all  the  stockholders 
of  the  Company,  and  said  notice  was  given  in  the  manner  provided 

by  law. 

In  Witness  Whereof,  we  have  hereunto  signed  this  certificate  as  President  and 
Secretary,   respectively,  of  the  said  Company,  and   caused  the   seal 

of  said  Company  to  be  attached  hereto. 

,  President  of 
,  Secretary  of 
State  of  Ohio, 
County  of 

Be  it  Remembered,  that  on  this  day  of  January,  1907,  before  me, 

the  undersigned,  a  Notary  Public  in  and  for  said  County  and  State,  personally  came 
and  x  known  to  me  to  be  the  persons  described  in  and 

who  signed  the  foregoing  Certificate  as  to  the  correctness  of  the  foregoing  amend- 
ment to  the  Articles  of  Incorporation  of  the  Company,  and  person- 
ally known  to  me  to  be  the  President  and  Secretary,  respectively,  of  said  Company, 
and  severally  acknowledged  the  execution  and  signing  of  same  to  be  their  free  act 
and  deed  for  the  purposes  therein  set  forth. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  seal  the  day  and  year 
last  above  written. 

,  Notary  Public. 

(seal.) 

Delaware  Form. 

MINUTES  OF  MEETING  AMENDING  CHARTER  AND  CERTIFICATE 
RELATING  THERETO. 

Amendment  of  Certificate  of  Incorporation  of  a  Delaware  Company. 

Minutes  of  a  special  meeting  of  the  Board  of  Directors  of  the  Com- 

pany, held  at  the  office  of  the  Company  in  the  City  of  ,  State  of  , 

on    the  day    of  ,  1906,    at  o'clock    in    the 

noon. 

Present:  Messrs.  ,  constituting  a  majority  (or  all)  of  the  Board. 

Meeting  called  to  order  by  the  President,  Mr.  ,  who  presided,  and  the 

Secretary  assumed  the  duties  of  his  office. 

The  Secretary  presented  a  waiver  of  notice  of  the  meeting  signed  by  all  the 
Directors,  and  on  motion  same  was  ordered  spread  upon  the  minutes : 

Waiver. 

We,  the  undersigned,  Directors  of  the  Company,  a  Corporation  under 

the  laws  of  the  State  of  Delaware,  hereby  waive  notice  of  a  special  meeting  of  the 
Board  of  Directors  of  said  Company  and  of  the  business  to  be  transacted  thereat. 
We  designate  the  day  of  ,  190     ,  as  the  time,  and  the  office  of  the 

Company  in  the  City  of  ,  State  of  ,  as  the  place  of  said  meeting. 

The  purpose  of  said  meeting  being  to  vote  upon  a  proposition  to  change  the  (name, 
purposes,  increase  or  decrease  capital  stock,  etc.),  and  the  transaction  of  such  other 
business  as  may  properly  come  before  the  meeting. 

(Signatures.) 

The  following  resolution  was  then  presented  to  the  meeting  and,  on  motion  duly 
made  and  seconded,  was  unanimously  adopted  : 

Whereas,  it  appears  advisable  to  this  Board  to  amend  the  certificate  of  incorpo- 
ration of  the  Company  in  the  following  respects,  to  wit : 

(1)    Changing  paragraph  number  of  the  certificate  of  incorporation  of 

said  Company,  so  that  it  shall  read  as  follows : 

First. 
The  name  of  the  Corporation  is  Company  (as  to  other  amendments 

see  .certificate  page  755). 
804 


FORMS    a XI)    PRECEDENTS. 

Now,  therefore,  be  it 

Resolved,  that  a  meeting  of  the  stockholders  of  the  Company  be  called 

for  the  day  of  ,  1906,  for  the  purpose  of  voting  upon  the  question 

of  the  acceptance  or  rejection  of  the  recommendations  of  this  Board  relative  to  the 
amendment  of  the  certificate  of  incorporation  of  the  Company  as  herein 

proposed  and  advised  by  the  Board  of  Directors  of  said  Corporation;  and  be  it 
further 

Resolved,  that  the  Secretary  of  the  Company  be  directed  forthwith 

to  issue  notice  to  the  stockholders  of  said  Corporation  of  the  time,  place,  and  purpose 
of  said  meeting,  so  called  by  the  Board  of  Directors  of  said  Corporation. 

No  further  business  was  preseuted,  and  on  motion  the  meeting  adjourned. 


Minutes  of  a  special  meeting  of  the  stockholders  of  the  Corporation, 

held  at  the  office  of  the  Company  in  the  City  of  ,  State  of  ,  on  t  he 

day  of  April,  1900,  at  o'clock  in  the  noon. 

The  following  stockholders  were  present  in  person,  holding  the  number  of  shares 
set  opposite  their  respective  names : 

Names.  No.  of  Shares. 

By  proxy : 

Name.  Name  of  Proxy.  No.  of  Shares. 

being  all  the  stockholders  of  the  Company. 

Meeting  called  to  order  by  the  President,  who  presided,  and  the  Secretary 
assumed  the  duties  of  his  office. 

The  Secretary  presented  a  waiver  of  notice  of  the  meeting  signed  by  all  the 
stockholders,  and.  on  motion  same  was  ordered  spread  upon  the  minutes : 

Waiver. 

(Same  general  form  as  for  Directors'  meeting.) 

The  chairman  stated  that  the  purpose  of  the  meeting  was  to  vote  upon  certain 
amendment  to  the  certificate  of  incorporation  as  proposed  and  advised  by  the  Board 
of  Directors. 

On  motion  duly  made  and  seconded,  it  was 

Resolved,  that  the  stockholders  first  proceed  to  the  choice,  by  ballot  of  two 
judges,  to  receive  and  report  upon  the  vote  of  the  stockholders  cast  at  this  meeting. 

Messrs.  and  were  then  placed  in  nomination  as  judges  for 

the  purpose  of  receiving  and  reporting  upon  the  vote  of  the  stockholders  casi  at 
this  meeting.     Ballot  was  then  had  and  votes  were  cast  in  favor  of  these 

gentlemen  for  the  office  designated,  and  no  votes  were  east  in  opposition  thereto. 

The  chairman  thereupon  announced  the  foregoing  gentlemen  duly  elected  judges 
to  receive  and  report  on  the  vote  of  the  stockholders  cast  at  this  meeting. 

On  motion  duly  made  and  seconded,  it  was 

Resolved,  that  the  name  of  this  Corporation  be  changed  from  Company, 

its  present  name,  to  Company,  by  which  latter  name  it  shall   be  hereafter 

known ;  and  be  it  further 

Resolved,  in  pursuance  of  the  foregoing  resolution  that  paragraph  numbered 
"  First "  of  the  certificate  of  incorporation  be  changed  to  read  as  follows  : 

Firs/. 

The  name  of  the  Corporation  is  Company. 

Ballot,  was  then  had  and  the  judges  reported  as  to  the  result  of  the  ballot  as 
follows:  That  the  total  number  of  shares  issued  and  outstanding  were 
shares  of  common  stock  and  no  more,  and  thai  no  shares  of  preferred  stock  had 
been  issued.     They  further  reported  that  votes  had  been  cast    in   favor  of 

the  adoption  of  said  resolution  and  no  votes  against. 

The  chairman  thereupon  announced  the  foregoing  resolution  to  lie  duly 
adopted.     (Here  follow  the  other  amendments  mentioned  hereafter.) 

No  further  busiuesy  was  presented  and  on  motion  the  meeting  adjourned. 

806 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

We,  and  ,  President  and  Secretary  respectively 

of  The  Company,  a  Corporation  created  and  organized  under  the  laws  of 

the  State  of  Delaware,  do  hereby  certify  to  the  Secretary  of  State  of  the  State  of 
Delaware,  that  at  a  meeting  of  the  stockholders  of  said  Corporation,  regularly 

held  in  accordance  with  the  requirements  of  said  State,  at  the  office  of  said  Corpora- 
tion in  the  City  of  ,  State  of  ,  on  the  day  of  ,  19  ,  at 
which  time  shares  of  the  capital  stock  of  said  Corporation  was  represented 
in  person  or  by  proxy,  which  said  shares  were  all  of  the  shares  of  stock  of 
said  Corporation  issued  and  outstanding  at  the  date  of  said  meeting,  and  that  said 
shares  were  voted  for  the  following  resolutions,  to  wit : 

(1)  Resolved,  that  the  name  of  this  Corporation  be  changed  from 
Corporation,  its  present  name,  to  Corporation,  by  which  name  it  shall  be 
hereafter  known;    and  be  it  further 

Resolved,  in  pursuance  of  the  foregoing  resolution,  that  paragraph  numbered 
"  Pirst "  of  the  certificate  of  incorporation  of  the  Corporation  be  changed 

to  read  as  follows  : 

First. 

The  name  of  the  Corporation  is  :  (here  insert  name  in  amended  form). 

(2)  Resolved,  that  the  purposes  of  said  Corporation  shall  be  changed  by  adding 
thereto  the  following  additional  purposes  :   (here  insert  purposes  to  be  added). 

And  be  it  further 

Resolved,  in  pursuance  of  the  foregoing  resolution,  that  paragraph  numbered 
"  Third  "  of  the  certificate  of  incorporation  of  the  Corporation  be  changed 

to  read  as  follows  : 

Third. 
(Here  insert  paragraph  in  amended  form.) 

(3)  Resolved,  that  the  number  of  shares  of  the  capital  stock  be  changed  from 
five  thousand  (5,000)  shares  of  preferred  stock  of  the  par  value  of  one  hundred 
dollars  (§100)  per  share,  and  five  thousand  (5,000)  shares  of  common  stock  of  the 
par  value  of  one  hundred  dollars  ($100)  per  share,  to  ten  thousand  (10,000)  shares 
of  common  stock  of  the  par  value  of  one  hundred  dollars  ($100)  per  share ;  and  be 
it  further 

Resolved,  in  pursuance  of  the  foregoing  resolution,  that  paragraph  numbered 
■"  Fourth  "  of  the  certificate  of  incorporation  be  changed  to  read  as  follows : 

Fourth. 

The  amount  of  the  total  authorized  capital  stock  of  the  Corporation  is  one  million 
dollars  ($1,000,000),  divided  into  ten  thousand  (10,000)  shares  of  common  stock  of 
the  par  value  of  one  hundred  dollars  ($100)  per  share.  The  amount  of  capital 
stock  with  which  the  Company  will  begin  business  is  one  thousand  dollars. 

Given  under  our  hands  and  the  seal  of  the  Corporation   this  day  of 

May,  1906 


President  of  the  Corporation. 

Secretary  of  the  Corporation. 
State  of  > 

County  of  J  ss' 

Be  it  Remembered,  that  on  this  day  of  May,  A.  D.  1906,  personally 

came  before  me,  the  subscriber,  a  Notary  Public  of  the  State  of  ,  , 

President,  and  ,  Secretary,  of  the  Corporation,  parties  to  this 

certificate  of  amendment,  known  to  me  personally  to  be  such,  and  severally  acknowl- 
edged the  same  to  be  the  act  and  deed  of  the  said  Corporation  and  of  the  said  officers 
pursuant  to  a  resolution  in  that  behalf. 

Given  under  my  hand  and  seal  of  office  the  day  and  year  aforesaid. 

,  Notary  Public,  County, 

806 


FORMS   AXD    PRECEDENTS. 

JUDGES'   CERTIFICATE. 

We,  the  undersigned,  having  been  appointed  and  elected  judges  for  the  purl 

of  receiving  and  reporting  on  the  vote  of  the  stockholders  of  the  Corpora- 

tion, pursuant  to  the  statute  in  such  case  made  and  provided,  at  a  special  meeting 
of  the  stockholders  of  said  Corporation,  held  for  the  purpose  of  voting  upon  the 
adoption  of  certain  amendments  to  the  certificate  of  incorporation  of  said 
Corporation,  do  hereby  certify  that  at  said  meeting  there  were  present,  either  in 
person  or  by  proxy,  and  voting,  shares  of 'the  stock  of  said  Corporation, 

which  said  shares  constituted  all  of  the  stock  of  said  Corporation  issued 

and  outstanding. 

We  do  further  specify  that  at  said  special  meeting  of  the  stockholders  of  said 
Corporation  votes  were  cast  in  favor  of  the  following  amendments 

to  the  certificate  of  incorporation  of  the  Corporation :  To  w  it ; 

(1)  Resolved,  that  the  name  of  this  Corporal  ion  be  changed  from 

its  present  name,  to  ,  by  which  name  it  shall  be  hereafter  known  ;  ami 

be  it  further 

Resolved,  in  pursuance  of  the  foregoing  resolution  that  paragraph  numbered 
"First"  of  the  certificate  of  incorporation  of  the  be  changed  to  read 

as  follows : 

First. 

The  name  of  the  Corporation  is  :  (Here  insert  name  as  amended.) 

(2)  Resolved,  that  the  purposes  of  said  corporation  shall  be  changed  by  adding 
thereto  the  following  additional  purposes  :  (here  insert  additional  purposes). 

And  be  it  further 

Resolved,  in  pursuance  of  the  foregoing  resolution  that  paragraph  numbered 
"  Third"  of  the  certificate  of  incorporation  of  the  Corporation  be  changed 

to  read  as  follows : 

(Here  insert  paragraph  in  its  amended  form.) 

Third. 

(3)  Resolved,  that  the  number  of  shares  of  the  capital  stock  be  changed  from 
five  thousand  (5,000)  shares  of  preferred  stock  of  the  par  value  of  one  hundred 
dollars  (§100)  per  share,  and  five  thousand  (5,000)  shares  of  common  stock  of  the 
par  value  of  one  hundred  dollars  ($100)  per  share,  to  ten  thousand  (10,000)  shares 
of  common  stock  of  the  par  value  of  one  hundred  dollars  per  share  ;  and  be  it 
further 

Resolved,  in  pursuance  of  the  foregoing  resolution  that  paragraph  numbered 
"  Fourth  "  of  the  certificate  of  incorporation  be  changed  to  read  as  follows  : 

Fourth. 

The  amount  of  the  total  authorized  capital  stock  of  the  Corporation  is  one  million 
dollars  ($1,000,000)  divided  into  ten  thousand  (10,000)  shares  of  common  Btock 
of  the  par  value  of  one  hundred  dollars  ($100)  per  share.  The  amount  of  capital 
stock  with  which  the  Company  wdl  begin  business  is  one  thousand  dollars 

,  ,  Judges. 

Maine  Form. 

MINUTES  OF  MEETING  AMENDING  CHARTER  AND   CERTIFICATE 
RELATING  THERETO. 

Minutes  of  a  special  meeting  of  the  stockholders  of  Company,  held 

at  the  office  of  ,  at  ,  Maine,  on  the  day  of  December, 

1906,  at  4  p.  m.,  pursuant  to  written  consent  and  waiver  of  notice  signed  by  all  the 
stockholders. 

Mr.  called  the  meeting  to  order,  and  acted  as  temporary  chairman 

thereof.    The  clerk,  Mr.  ,  was  directed  to  record  the  proceedings  of  the 

meeting,  and  was  chosen  secretary  pro  tcm.    The  temporary  chairman  t  hen  appointed 


INCORPORATION  AND   ORGANIZATION   OF  CORPORATIONS. 

the  clerk  a  committee  to  ascertain  if  a  quorum  was  present,  and  after  due  examina- 
tion of  the  record  of  stockholders  the  clerk  reported  as  follows :  (here  insert  report 
of  committee). 

Report  of  Committee. 

,  Maine,  December  ,  1906. 

I,  ,  Clerk   of  Company,  a  Corporation   of  the   State  of 

Maine,  duly  appointed  a  committee  to  ascertain  and  report  if  a  quorum  was 
present  at  a  special  meeting  of  the  stockholders  of  said  Corporation,  appointed  to  be 
held  this  day  at  the  office  of  ,  at  ,  Maine,  at  4  p.  m.,  do  now 

report  as  follows : 

That  the  capital  stock  of  said  Company  is 40,000  shares 

of  the  par  value  of  five  dollars  each,  according  to  its  cer- 
tificate of  Incorporation,  and  that  of  said  capital  stock' 

there  has  been  subscribed 100     " 

and   there  remains  unissued  and  in  the  treasury  of  the 

Company  . 39,900     " 

And  that  of  said  one  hundred  shares  so  subscribed  the 
following  stockholders  holding  the  number  of  shares  set 
opposite  their  respective  names  were  present  in  person  : 

20  shares 

20      " 

20     " 

20      " 

20     " 

Total 100     " 

I,  therefore,  report  that  according  to  the  law  and  the  by-laws  of  the  said  Com- 
pany the  meeting  is  legally  constituted,  all  the  stock  subscribed  or  issued  being 
present  in  person. 

,  Clerk-Committee. 

Upon  motion,  duly  seconded,  the  report  of  the  Committee  was  accepted,  and 
the  meeting  declared  duly  constituted. 

Upon  motion,  duly  seconded,  Mr.  was  unanimously  chosen  chairman, 

and  presided,  and  Mr.  was  unanimously  chosen  secretary  of  the  meetiug. 

The  secretary  then  presented  a  waiver  of  notice  of  the  meeting  and  consent ; 
the  same  was  read  and  approved,  and  a  copy  of  the  same  ordered  spread  upon 
these  minutes.     The  same  is  as  follows  :  (here  insert  waiver  of  notice). 

Waiver  of  Notice  of  and  Consent  to  hold  a  Special  Meeting  of 
Stockholders  of  Company. 

We,  the  undersigned,  being  all  the  stockholders  of  Company, 

a  Corporation  organized  under  the  laws  of  the  State  of  Maine,  hereby  waive  notice 
of  any  provision  of  the  laws  of  said  State  respecting  stockholders'  meetings,  as  well 
as  of  the  by-laws  of  said  Company,  and  we  do  hereby  consent  that  a  special  meet- 
ing of  the  stockholders  of  said  Company  be  held  in  pursuance  of  §  7  of  that  part  of 
the  by-laws  of  said  Company  respecting  stockholders'  meetings,  be  held  at  the  office  of 
the  Company,  namely,the  office  of  ,  at  ,  Maine,  on  , 

1906,  at  4  p.  m.,  for  the  purpose  of  taking  action  to  increase  the  capital  stock  of 
said  Company  from  40,000  shares  of  the  par  value  of  $5  each  to  300,000  shares  of 
the  same  par  value,  and  we  do  hereby  consent  to  such  increase  of  the  capital  stock 
aforesaid ;  and  we  do  hereby  consent  that  said  meeting  may  transact  any  other 
business  that  may  be  brought  before  it,  hereby  ratifying  and  confirming  any  action 
had  or  proceeding  taken  at  said  meeting.  (Signatures.) 

Dated  December  ,  1906. 

Upon  motion,  duly  seconded,  it  was  voted :  that  the  meetiug  proceed  to  the 
transaction  of  business. 
808 


FORMS   AXD    PRECEDENTS. 

Upon  motion,  duly  seconded,  the  following  preamble  and  resolutions  were 
then  offered,  and  upon  a  vote  being  taken,  the  same  were  declared  unanimously 
adopted : 

Whereas,  the  stockholders  of  this  Corporation  find  that  the  amount  of  its  capital 
stock  is  insufficient  for  the  purposes  for  which  said  Corporation  is  organized, 

Therefore,  be  it  Resolved,  that  the  authorized  capital  stock   of  Com- 

pany be  increased  from  forty  thousand  (40,0Un)  snares  of  the  par  value  of  five 
dollars  ($5.00)  each  to  three  hundred  thousand  (300,000)  .shares  of  the  par  value 
of  five  dollars  (35.00)  each,  so  that  the  authorized  capital  stock  of  said  Corporation 
shall  hereafter  be  one  million  five  hundred  thousand  (SI, 500. 000)  dollars  instead 
of  two  hundred  thousand  (§200,000.00)  dollars  as  heretofore  ;  and  be  it 

Further  Resolved,  that  this  Corporation,  by  its  clerk,  file  a  proper  certificate  of 
such  increase  with  the  Secretary  of  State  within  ten  days  hereafter,  and  pay  to  the 
Treasurer  of  State  the  fees  required  by  law  for  the  making  of  such  incn 

Upon  motion,  duly  seconded,  it  was  voted  :  that  the  Board  of  Directors  of  this 
Company  be  and  hereby  are  authorized  and  empowered  to  acquire  and  vest  in  the 
Company  such  real  or  personal  property  as  in  their  judgment  may  be  necessary  and 
proper  for  the  business  of  the  Company,  and  pay  for  the  same  by  the  issue  and 
delivery  of  such  part  of  the  capital  stock  of  this  Company  as  may  be  proper  in 
the  premises. 

Upon  motion,  duly  seconded,  it  was  voted  :  that  the  meeting  adjourn. 
'  Adjourned. 

,  Chairman. 

,  Clerk-Secretary. 

CERTIFICATE  OF  AMENDMENTS. 

To  the  Secretary  of  State  of  Maine. 

I,  ,  of  ,  County  of  and  State  of  Maine,  hereby 

certify  that  I  am  Clerk  of  the  Company,  a  Corporation  duly  organized 

and  existing  under  the  laws  of  the  State  of  Maine,  having  its  principal  office  at 
,  Maine.  That  at  a  special  meeting  of  the  stockholders  of  said  Corpo- 
ration held  at  the  principal  office  thereof  on  the  day  of  ,  190  , 
at  which  meeting  a  majority  of  the  capital  stock  of  said  Corporation  issued  and  out- 
standing was  represented  in  person  or  by  proxy,  the  following  resolution  was 
adopted  by  a  vote  of  (here  state  percentage  of  total  outstanding  stock  voting 
in  favor  of  the  resolution)  in  amount  of  the  capital  stock  of  the  Corporation  issued 
and  outstanding,  to  wit  (here  insert  resolution  as  adopted). 

I  further  certify  that  said  meeting  was  duly  and  legally  called  and  convened  in 
accordance  with  the  provisions  of  the  by-laws  of  the  Corporation,* and  that  the  action 
proposed  to  be  taken  at  said  meeting  was  duly  specified  iu  the  notice  calling  said 
meeting. 

Dated 

,  Clerk. 

Soutii  Carolina. 

APPLICATION  FOR  INCREASE   OR  DECREASE  OF  CAPITAL 

STOCK. 
State  of 
County  of 
To  the  Secretary  of  State  of 

Whereas,  there  was  issued  by  the  Secretary  of  State  a  charter  dated 
constituting  and  creating  into  a  corporation,  under  the  laws  of  this  State, 

with  its  principal  place  of  business  at  ,  and  with  a  capital  stuck  of 

dollars,  divided  into  shares,  of  the  par  value  of  dollars  each, 

empowering  it  to  engage  in  the  business  of 

The  undersigned,  a  majority  of  the  duly  elected  and  qualified  Board  "f  Directors 
of  the  said  ,  hereby  certify  that  a  notice  (a  copy  of  which  is  hereto  attached) 

809 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

was  published  once  a  week  for  four  weeks  iu  the  ,  a  newspaper,  published 

in  the  County  of  ,  of  a  meeting  of  stockholders  on  ,  which 

notice  stated  the  time  and  place  of  meeting,  and  the  amount  of  the 

proposed 

And,  further,  that  said  meeting  was  duly  held  pursuant  to  notice,  and  a  resolu- 
tion (a  copy  of  which  is  hereto  attached)  was  offered  and  adopted  by  a  two-thirds 
vote,  to  the  amount  of  the  capital  stock  of  the  aforesaid  Corporation  to 

dollars,  divided  into  shares  of  the  par  value  of 

dollars  each. 

And,  further,  your  petitioners  certify  that  they  have  complied  in  all  respects  with 
(here  insert  reference  to  amendatory  act  under  which  application  is  made). 

Wherefore  they  pray  that  the  charter  of  the  said  be  so  amended. 

Signed  this  day  of 

,  Directors. 

South  Dakota  Form. 

AMENDMENT  TO  ARTICLES   OF  INCORPORATION 

OF 

We,  ,  and  ,  President   and   Secretary,   respectively, 

of  the  ,  a  Corporation  organized  and  existing  under  the  Laws  of  the 

State  of  South  Dakota,  hereby  certify  that  said  Corporation  at  a 
meeting  of  the  stockholders  of  said   Company,  held  at   its  office  in  the  City  of 
,  State  of  ,   on  the  day   of  , 

190     ,  amended  Article  of  the  Articles  of  Incorporation  so  as  to  read  as 

follows : 

Article.     (Here  insert  article  in  amended  form.) 

We  further  certify  that  there  were  subscribed  and  outstanding  at  said  date 
shares  of  stock  of  said  Company  and  no  more,  and  that  the  vote  by  which  said 
amendment  was  adopted  was  votes  in  favor  thereof  and  votes 

against,  being  more  than  two-thirds  of  the  stock  outstanding  voting  in  favor  of  the 
said  amendment. 

We  further  certify  that  said  meeting  was  regularly  called  and  that  due  and  legal 
notice  of  the  proposed  amendments  had  been  given  and  that  the  attached  copy  of 
notice  is  a  true  copy  of  the  notice  that  was  served  upon  all  the  stockholders  of  the 
,  and  said  notice  was  given  in  the  manner  provided  by  law. 

In  Witness  Whereof,  we  have  hereunto  signed  this  certificate  as  President  and 
Secretary,  respectively,  of  the  said  ,  and  caused  the  seal  of  said 

Company  to  be  attached  hereto. 

President  of 


Secretary  of 

State  of  South  Dakota,  ) 
County  of  \  ss< 

Be  it  Remembered,  that  on  this  day  of  ,  190     ,  before  me, 

,  a  Notary  Public  in  and  for  said  County  and  State,  personally  came 
and  ,  known  to  me  to  be  the  persons  described  in  and 

who  signed  the  foregoing  certificate  as  to  the  correctness  of  the  foregoing  amend- 
ment to  the  Articles  of  Incorporation  of  the  ,  and  personally  known 
to  me  to  be  the  President  and  Secretary,  respectively,  of  said  ,  and 
severally  acknowledged  the  execution  and  signing  of  same  to  be  their  free  act  and 
deed  for  the  purposes  therein  set  forth. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  seal  the  day  and  year 
last  above  written. 

,  Notary  Public. 

810 


FORMS   AND   PRECEDENTS. 


DISSOLUTION   OF   CORPORATIONS. 


VOLUNTARY  DISSOLUTION. 

Connecticut  Forms. 

We,  the  undersigned,  a  majority  of  the  Directors  of  the  ,  a  Corpora- 

tion organized,  under  the  statute  laws  of  the  State  of  Connecticut,  and  located  in 
the  town  of  ,  county  of  ,  in  said  State, 

Hereby  certify,  that  at  a  meeting  of  the  Directors  of  said  Corporation,  held  at 
,  on  the  day  of  ,  190     ,  it  was  voted  to  ter- 

minate its  corporate  existence. 

That  a  special  meeting  of  the  stockholders  was  forthwith  called,  to  be  held  thirty 
days  thereafter,  to  wit,  on  the  day  of  ,  190     . 

That  the  call  for  said  meeting  contained  a  copy  of  said  vote,  and  was  published 
four  times,  once  during  each  week  preceding  sucli  meeting,  in  the 
a  newspaper  published  in  and  having  a  circulation  in  the  town  where 

said  Corporation  is  located,  and  a  copy  thereof  was  sent  by  mail  to  the  last  known 
address  of  each  stockholder. 

At  said  stockholders'  meeting,  there  being  represented  in  person  or  by  proxv 
shares  of  common  stock  and  shares  of  preferred  stock,' it    was 

voted  to  confirm  said  vote  of  the  Directors,  the  number  of  shares  of  common  stock 
voting  therefor  being  ,  and  the  number  of  shares  of  preferred  stock  vot- 

ing therefor  being  ,  and  each  being  three-fourths  or  more  of  the  whole 

of  each  class  of  stock. 

All  claims  against  said  Corporation  may  be  sent  to 

Dated  at  ,  this  day  of  ,  190     . 

f   A  Majority  of 

V  the 

1       Directors. 


State  of  Connecticut,  \ 
County  of  j  ss* 

Personally  appeared  ,  being  a  majority  of  the  Directors  of  the 

and  made  oath  to  the  truth  of  the  foregoing  certificate  by  them 
signed,  before  me, 

,  Not 'ary  "Public. 
,  Justice  of  the  Peace. 

We,  the  undersigned,  a  majority  of  the  Directors  of  the  ,  a  Corpo- 

ration organized  under  the  statute  laws  of  the  State  of  Connecticut  and  located  in 
the  town  of  ,  County  of  in  said  State, 

Hereby  certify,  that  every  stockholder  of  said  Corporation  has  signed  and  ac- 
knowledged an  agreement  that  the  corporate  existence  of  such  Corporation  shall 
be  terminated,  which  instrument  is  dated  the  day  of  ,  190     . 

All  claims  against  said  Corporation  may  be  sent  to 

Dated  at  ,  this  day  of  ,  190     . 

I  A  Majority  of 

V  the 

I      Directors. 


State  of  Connecticut,  \  1 90     . 

County  of  £ 

Personally  appeared  ,  being  a  majority  of  the  Directors  of  the 

,  and  made  oath  to  the  truth  of  the  foregoing  certificate  by  them 
signed,  before  me, 

,  Notary  Public. 
,  Justice  of  the  Peace* 
Ml 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

VOLUNTARY  DISSOLUTION. 

Delaware  Forms. 

As  required  by  the  "  General  Corporation  Laws"  of  the  State  of  Delaware,  the 
Board  of  Directors  of  the  Company  render  the  following  statement, 

to  be  filed  in  the  office  of  the  Secretary  of  State  of  the  State  of  Delaware  upon  the 
dissolution  of  said  Company. 

The   location   of  the  principal  office  in  this  State  is  at  ,  in  the 

of  ,  comity  of 

The  name  of  the  agent  therein  and  in  charge  thereof,  and  upon  whom  process 
against  the  Corporation  may  be  served,  is 

The  following  is  a  list  of  the  names  and  residences  of  the  Directors  and  officers 
of  said  Company : 

Names.  Residences. 

The  officers  of  the  Company  are : 

President,  

Vice-President, 

Second  Vice-President,  . 

Third  Vice-President,  

Secretary,  

Treasurer,  

Dated  ,  1907- 

The  foregoing  statement  is  correct  and  true  ,  President. 

Attest:  ,  Secretary. 

CONSENT  OF  STOCKHOLDERS  TO   DISSOLUTION. 

We,  the  undersigned,  being  all  the  stockholders  of  the  ,  a  Corporation 

created  and  existing  under  and  by  virtue  of  the  laws  of  the  State  of  Delaware, 
deeming  it  advisable  and  meet  for  the  interests  of  said  Corporation  that  the  same 
should  forthwith  be  dissolved,  hereby  consent  to  the  dissolution  of  said  Corpora- 
tion, as  provided  for  by  the  General  Corporation  Laws  of  the  State  of  Delaware, 
and  do  sign  this  consent  to  the  end  that  it  may  be  filed  in  the  office  of  the  Secre- 
tary of  State  of  Delaware,  as  provided  by  law. 

Witness  our  hands  this  day  of  ,  190     . 

Stockholders.  Number  of  Shares. 

Attest : 

,  Secretary. 

CERTIFICATE  OF  PRESIDENT,  SECRETARY,  AND  TREASURER  TO 
CONSENT  OF  STOCKHOLDERS,  LIST  OF  NAMES  AND  RESI- 
DENCES OF  DIRECTORS  AND   OFFICERS. 

We,  the  President,  Secretary,  and  Treasurer  of  the  ,  in  accordance 

with  the  requirements  of  the  General  Corporation  Laws  of  the  State  of  Delaware, 
and  in  order  to  obtain  a  dissolution  of  said  Company,  as  provided  by  the'  Genera 
Corporation  Laws  of  the  State  of  Delaware,  do  hereby  certify  as  follows : 

The  principal  office  of  the  in  the  State  of  Delaware  is  at 

in  the  County  of  ,  and  the  agent,  in  charge  thereof  upon  whom  process 

against  this  Corporation  may  be  served  is  the 

That  annexed  hereto  is  a  consent  in  writing  to  the  dissolution  of  said 
signed  by  all  the  stockholders  of  said  Company. 

The  following  is  a  list  of  the  names  and  residences  of  the  Directors  of  the  said 
Company  : 

Name.  Residence. 


812 


FORMS    AXD    PRECEDENTS. 

The  following  is  a  list  of  the  officers  of  the  Company : 
President, 
Secretary  and  Treasurer, 

State  of  \  ss> 

County  of  f 

,  being  first  duly  sworn,  deposes  and  says,  that  he  is  the  President 
of  the  described  in  the  foregoing  cert ificate  ;  thai   the  foregoing  certifi- 

cate is  true  of  his  own  knowledge;  that  the  written  consent  of  stockholders  referred 
to  and  annexed  to  the  foregoing  certificate  is  signed  by  all  the  stockholders  of  Baid 
•Company,  that  the  list  of  stockholders  in  the  foregoing  certificate  is  a  full,  true, 
and  exact  list,  as  shown  by  the  books  of  the  Company  on  the  daj  of 

,  190      ;  that  the  fist  of  officers  in  the  foregoing  certificate  is  a  full, 
true,  and  correct  list    of  the  officers  of  the  Company  on  the  day  of 

,  190     . 

,  President. 
Subscribed  and  sworn  to  before  me  this  day  of  ,  L90     . 

,  Notary  Public. 
State  of  ) 

County  of  £ 

,  being  first  duly  sworn,  deposes  and  says,  that  ho  is  the  Secretary 
and  Treasurer  of  the  described  in  the  foregoing  certificate;  that  the  fore- 

going certificate  is  true  of  his  own  knowledge ;  that  the  written  consent  of  stock- 
holders referred  to  and  annexed  to  the  foregoing  certificate  is  signed  by  all  the 
stockholders  of  said  Company  ;  that  the  list  of  stockholders  in  the  foregoing  certifi- 
cate is  a  full,  true,  and  exact  list,  as  shown  by  the  books  of  the  Company  on  the 
day  of  ,  190      :  that  the  list  of  officers  in  the  foregoing  cer- 

tificate is  a  full,  true,  and  correct  list  of  the  officers  of  the  Company  on  the 
day  of  ,  190     . 

,  Secretary  and  Treasurer. 

Subscribed  and  sworn  to  before  me  this  day  of  ,  190     . 

,  Notary  Public. 

COMPOSITE  FORM  OF  MINUTES. 

(For  New  York,   New  Jersey,   South   Dakota,  Arizona,   Nevada,    H 
Virginia,  Delaware,  District  of  Columbia,  and  other  States.) 

Minutes  of  the  First  Meeting  of  the  Incorporators  and  Subscribers  to  the 
capital  stock  of  the  Company,  held  at  Room  No.  ,  No. 

Street,  in  the  City  of  ,  State  of  ,  at  o'clock  in  the 

noon. 

1.  The  meeting  was  called  to  order  by  Mr.  ,  who  stated  the  purpose 
thereof. 

2.  Upon  motion  duly  made  and  seconded,  Mr.  was  chosen  Chairman 
of  the  meeting,  and  Mr.                     Secretary  thereof. 

3.  The  following  incorporators,  being  also  subscribers  to  the  capital  stock  of 
the  Company  in  the  amount  hereinafter  set  opposite  their  names,  were  present  in 
person,  to  wit : 

Names.  No.  of  Shares  Bubsoribed. 


I.  The  following  incorporators,  being  also  subscribers  to  the  capital  stock  of 
Company  to  the  amount  hereinafter  set  opposite  their  names,  were  represented 


4. 
the  Cc 
by  proxv . 

Names.  No.  of  Shares  subscribed.  Proxy. 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

5.  The  Chairman  then  presented  a  copy  of  the  certificate  of  incorporation,  and 
stated  that  on  the  day  of  ,  19  ,  the  original  certificate  of 
incorporation,  duly  executed  and  acknowledged,  had  been  duly  filed  and  recorded 
in  the  office  of  the  Secretary  of  State. 

Upon  motion  duly  made  and  seconded,  a  copy  of  said  certificate  of  incorporation 
was  ordered  spread  upon  the  minutes  :  (insert  copy  of  certificate.) 

(In  the  following  States,  section  5  is  omitted,  and  sections  referred  to  inserted 
in  its  place :  Delaware  A,  Arizona  A,  New  Jersey  A.) 

6.  The  President  stated  that  proper  waivers  of  notice  of  the  meeting,  and 
notice  of  the  purpose  of  the  meeting,  duly  executed  by  all  the  incorporators  and 
subscribers  to  the  capital  stock  of  the  Company,  had  been  presented  to  him  by  the 
Secretary  of  the  meeting. 

On  motion  duly  made  and  seconded,  it  was 

Resolved,  that  the  waivers  should  be  inserted  in  the  minute  book  of  the  Company, 
following  the  minutes  of  this  meeting. 

7.  The  proxy  (or  proxies)  above  mentioned  was  (or  were)  presented  and 
ordered  filed.     (Form  of  proxy  same  in  all  States.     See  Appendix.) 

8.  On  motion  duly  made  and  seconded,  a  form  of  by-laws  prepared  by 
counsel,  after  having  first  been  read  at  length  before  the  meeting,  was  unanimously 
adopted  as  the  by-laws  of  the  Company.  Said  by-laws  so  adopted 
reading  as  follows,  to  wit :  (insert  form  of  by-laws.) 

9.  On  motion  duly  made  and  seconded,  it  was  unanimously 

Resolved,  that  the  Chairman  of  the  meeting  be,  and  lie  hereby  is,  authorized 
and  directed  to  appoint  two  Inspectors  of  Election.  The  Chairman  thereupon 
appointed  and  as  Inspectors  of  Election. 

(Where  Inspectors  are  required  by  statute  to  take  oath  before  administering  the 
duties  of  the  office,  the  minutes  should  then  recite  in  addition  to  the  foregoing : 
"  The  oath  of  office  was  duly  administered  to  such  inspector.") 

(The  foregoing  provision  as  to  Inspectors  should  be  inserted  for  all  States  ex- 
cept South  Dakota,  New  York,  and  District  of  Columbia.  In  these  States  the  pro- 
visions as  to  Inspectors  is  omitted.) 

10.  The  Chairman  announced  that  if  there  was  no  objection,  the  meeting  would 
proceed  to  the  election  of  directors.  Nominations  being  called  for,  the  following 
persons  were  named  as  directors  of  the  Company,  to  hold  office  until  the  next  an- 
nual election  of  directors  and  until  their  successors  have  been  duly  elected  and 
qualify : 

Directors  nominated.  Addresses.  No.  of  Shares  held. 


Nominations  being  closed,  the  Chairman  declared  the  polls  open  for  the 
election. 

On  motion  duly  made  and  seconded  and  unanimously  adopted,  the  Secretary  of 
the  meeting  was  authorized  to  cast  the  votes  of  all  present  in  favor  of  the  election 
of  the  directors  above  named. 

(If  unanimous  consent  cannot  be  obtained,  the  minutes  should  recite  as 
follows :) 

Incorporators  (or  stockholders)  prepared  their  ballots  and  the  same  were  col- 
lected by  the  Inspectors  of  Election.  The  Chairman  thereupon  declared  the  polls 
closed.  The  Inspectors  then  counted  the  ballots  and  prepared  and  presented  their 
certificate  in  writing,  showing  that  the  above  persons  had  been  duly  elected 
directors. 

The  Chairman  thereupon  declared  that  the  said  persons  had  been  duly  elected 
directors  of  the  Company,  to  hold  office  until  the  uext  annual  election  of 

directors,  and  until  their  successors  had  been  duly  elected  and  qualified. 

(In  New  York,  South  Dakota,  and  District  of  Columbia,  where  directors  are 
named  in  certificate  of  incorporation  to  constitute  the  board  for  the  first  year,  the 
foregoing  provision  as  to  election  of  directors  is  omitted,  and  the  following  pro- 
vision inserted  in  lieu  thereof :) 

814 


FORMS   AND    PRECEDENTS. 


On  motion  duly  made  and  seconded,  it  was 

Resolved,  that  the  Board  of  Directors  named  in  the  articles  of  incorporation  be, 
and  they  hereby  are,  electee!  members  of  the  Board  of  Directors  for  the  ensuing 
year  and  until  their  successors  are  elected  and  qualify. 

11.  (The  following  is  inserted  where  stock  is  to  be  sold  for  cash.) 
Upon  motion  duly  made  and  seconded,  it  was  unanimously 

Bi  "viced,  that  the  Board  of  Directors  of  this  Company  be  authorized  and  em- 
powered to  sell  for  cash  at  par  shares  of  the  capital  slock,  of  the  Com- 
pany, the  manner  of  allotment  of  said  shares  to  be  vested  in  the  discretion  of  the 
Board  of  Directors,  so  far  as  the  same  may  be  permitted  by  law. 

12.  (The  following  clause  is  inserted  where  stock  is  made  full-paid  by  issu- 
ance of  stock  for  property  or  patent  rights.  This  form  is  applicable  to  all 
States.) 

Upon  motion  duly  made  and  seconded,  the  following  resolution  was  unanimously 
adopted  : 

Whereas,  the  stockholders  and  Board  of  Directors  of  this  Company  have  re- 
ceived a  proposition  reading  as  follows,  to  wit : 

To  the  Stockholders  and  Board  of  Directors  of  the  Company. 

Gentlemen  :  I  the  undersigned,  am  the  owner  of  the  following-described  prop- 
erty, to  wit  (insert  brief  description  of  property)  (or  letters  patent  of 
numbered  heretofore  on  the  day  of  issued  to  me, 

being  for  a  certain  new  and  useful  improvement  in  ). 

1  hereby  offer  to  sell,  assign,  and  transfer  to  your  Company  the  above-described 
property  (or  patent  rights)  in  consideration  of  the  issuance  to  me,  or  my  nominees 
or  assigns,  within  thirty  days  from  date  hereof,  of  shares  of  the  capital 

stock  of  your  Company  of  the  par  value  of  dollars  per  share,  aggregating 

dollars  in  amount. 
This  offer  is  made  subject  to  acceptance  by  your  corporation  within  thirty  days 
from  date  hereof.     If  the  said  offer  is  not  accepted  within  said  time,  the  same  shall 
forthwith  become  null  and  void. 

Respectfully  submitted, 

(Here  insert  uame  of  party  makiug  the  offer.) 

Now,  therefore,  be  it 

Resolved,  that  the  Board  of  Directors  be,  and  they  hereby  are,  empowered,  it 
thev  deem  it  advisable  so  to  do,  to  purchase  the  property  (or  patent  rights)  de- 
scribed in  the  foregoing  proposition,  and  to  issue  shares  oi  stock  ol  the 
par  value  of  $  per  share,  aggregating  $  in  amount,  in  payment  there- 
for, to  said                      ,  his  nominees  or  assigns. 

13.  Where  stock  is  issued  for  services  performed,  the  following  clause  should 
be  inserted : 

Whereas,  has  heretofore  and  between  the  day  oi 

and  the  day  of  performed  certain  services  at  the  instance  and 

request  and  for  the  use  and  benefit  of  said  Company  :  Now,  therefore, 

be  it 

Resolved,  that  the  Board  of  Directors  be,  and  they  hereby  are,  empowered,  i! 

they  deem  it  advisable  so  to  do,  to  accept  said  services  above  described,  ami  to  issue 

shares  of  stock  of  the  par  value  of  S  per  share,  aggregating 

$  in  amount,  in  payment  therefor,  to  said  ,  his  nominees  or 

assigns.  ,  .      ,     .  , 

14.  (The  following  resolution  may  be  inserted  m  the  incorporators  meeting,  Or 
may  be  omitted  therefrom  entirely,  as  maj  be  deemed  desirable.) 

Whereas,  there  has  been  subscribed  for  by  (insert  names  oi  incorporators) 
shares  of  the  capital  stock  of  this  Company  of  the  par  value  of  $  per  share, 

no  part  of  which  has  been  paid  for  ;   and 

Whereas,  under  the  resolution  heretofore  passed  at  this  meeting, 
shares  0f  stock  are  to  be  issued  to  in  payment  of  property  purchased  bj 

this  Corporation ;  and  .  . 

Whereas,  (la-re  insert  name  of  party  from  uliom  property  is  pnrcha  «,|)  baa 
agreed,  with  the  consent  of  said  incorporators,  thai  the  stock  to  la-  issued  to  bun  u 

s  1  5 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

payment  of  said  property  shall  include  the  said  stock  subscribed  for  by  the  incor- 
porators :  Now,  therefore,  be  it 

Resolved,  that  the  Board  of  Directors  be,  and  they  hereby  are,  empowered  and 
directed  to  accept  a  proportionate  part  of  said  property  as  payment  on  the  part  of 
said  incorporators  of  their  subscriptions  for  stock  in  said  Company,  and 

they  are  further  empowered  and  directed  to  issue  certificates  of  stock  to  said  incor- 
porators or  their  assigns  to  the  amount  of  their  respective  subscriptions. 

15.  Messrs.  ,  ,and  presented  transfers  of  sub- 

scription of  their  shares  to  the  following-named  transferees,  to  wit : 

Transferror.  Transferee.  No.  of  Shares. 


No  further  business  was  presented,  and  on  motion  the  meeting  adjourned. 

,  Secretary. 

Approved : 

,  Chairman. 

Delaware  A.  The  Secretary  reported  that  the  certificate  of  incorporation  of  the 
Company  was  filed  on  the  day  of  ,  19     ,  at  o'clock 

in  the  noon,  in  the  office  of  the  Secretary  of  State,  and  a  certified  copy 

thereof  recorded  in  the  office  of  the  Recorder  of  Deeds  for  the  County  of 
,  on  the  day  of  ,  19       ,  in  Certificate  of  In- 

corporation Record,  vol.  page  ,  etc.,  and  presented  a  copy  of  said 
certificate  of  incorporation,  which  was,  on  motion,  duly  made  and  seconded, 
ordered  spread  upon  the  minutes. 

Arizona  A.  The  Chairman  reported  that  the  certificate  of  incorporation  of  the  Com- 
pany was  filed  in  the  office  of  the  County  Recorder  of  Maricopa  County, 
State  of  Arizona,  on  the  day  of  ,  19       ,  and  a  cer- 

tified copy  thereof  filed  in  the  office  of  the  Corporation  Commission  on  the 
day  of  .     The  Secretary  presented  a  copy  of  said  certificate 

of  incorporation,  and  on  motion  same  was  ordered  spread  upon  the  minutes. 

New  Jersey  A.     The  Chairman  reported  that  a  copy  of  the  certificate  of  incorpora- 
tion had  been  duly  recorded  in  the  office  of  the  County  Clerk  of 
County  on  the  day  of  ,  19        ,  and  that  the  original 

certificate  of  incorporation,  after  having  been  duly  endorsed  by  said  County 
Clerk,  was  on  the  day  of  duly  filed  in  the  office  of  the 

Secretary  of  State  of  New  Jersey.  The  Secretary  presented  a  copy  of  said 
certificate  of  incorporation,  and  on  motion  same  was  ordered  spread  upon 
the  minutes. 

APPENDIX. 

Waiver  of  Notice  of  First  Meeting  of  Incorporators. 

We,  the  undersigned,  incorporators  of  the  Company,  a  corporation 

organized  and  existing  under  the  laws  of  the  State  of  ,  hereby  waive 

notice  of  the  time,  place,  and  object  of  the  organization  meeting  of  said 
Company,  and  do  hereby  agree  that  said  organization  meeting  may  be  held  at 
the  office  of  ,  in  the  City  of  ,  State  of  ,  on  the 

day  of  ,  19     ,  at  o'clock  in  the  noon  of 

said  day. 

Dated  ,  191    . 


Proxy.  Meeting  of  Incorporators  and  Stockholders. 

Know  all  Men  by  these  Presents  :  That  I,  ,  of  the  City  of 

,  State  of  ,  being  the  registered  owner  of  shares 

of  the  capital  stock  of  the  Company  (a  corporation  organized  and  exist- 

816 


FORMS    AND    PRECEDENTS. 

ing  under  the  laws  of  the  State  of  ),  do  hereby  constitute  and  appoint 

my  true  and  lawful  attorney,  for  me  and  in  my  name,  place,  and  Stead, 
to  vote  said  shares  of  stock  in  said  Company  as  my  proxy 

at  the  first  meeting  of  the  incorporators  and  stockholders  of  said  Company,  to  be 
held  at  the  office  of  ,  in  the  City  of  ,  State  of  , 

on  the  day  of  ,  19     ,  or  on  such  other  day  or  days  as  the 

meeting  may  be  thereafter  held  by  adjournment  or  otherwise. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  seal  this  day  of 

,  19     . 

(L.  S  ) 

In  presence  of 


Transfer  of  Subscription. 

The  undersigned,  in  consideration  of  the  sum  of  one  dollar  and  other  valuable 
considerations  to  me  paid,  the  receipt  whereof  is  hereby  acknowledged,  does  hereby 
sell,  assign,  transfer,  and  set  over  unto         ,  shares  of  the  capital  Btock  of  the 

Company  (a  corporation  organized  and  existing  under  the  laws  of  t  In- 
state of  )  which  said  shares  of  stock  were  heretofore  subscribed  for 
by  me,  as  an  incorporator  of  said  Company.  The  undersigned  further 
directs  the  proper  officers  of  said                 Company  to  issue  a  certificate  to  said 

for  said  shares  of  stock  so  subscribed  by  me. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  seal  this  day  of 

,19     . 


"Witness : 


Inspectors'  Oath  and  Certificate. 


State  of 
County  of 


and  ,  being  duly  sworn,  say  that  they  will  well  and  truly 

act  as  Inspectors  of  Election  of  the  Company,  a  corporation  organized 

and  existing  under  the  laws  of  the  State  of  ,  at  any  and  all  meetings  of 

said  Company  wherever  and  whenever  held. 


Subscribed  and  sworn  to  before  me  this  day  of  ,  19 

Certificate. 

The  undersigned,  duly  qualified  and  acting  inspectors  of  election  of  the 
Company,  a  corporation  organized  and   existing  under  the  laws  of  the   State  of 
,  do  hereby  certify  that  at  the  election  of  directors  >f  said  Company  held 
at  the  City  of  ,  State  of  ,  on  the  day  of  , 

19     ,  at  the  hour  of  M.,  of  said   day,  we  did    receive   the   votes   ol    the 

stockholders  of  said  Company,  as  cast  by  ballot  by  said  stockholders,  at  said  meel 
ing,  and  we  faithfully  and  fairly  counted  the  same,  and    that    the  following  persons 
were  duly  elected  directors  of  said  Company  for  the  ensuing  year. 

Directors  elected.  No.  of  Votes  received  for  each  candidate. 


Inspectors. 

817 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 


MINUTES   OF  ORGANIZATION  MEETING  OF  DIRECTORS. 

1.  Minutes  of  the  organization  meeting  of  the  directors  of  the 
Company  held  (here  state  where  held  and  hour  thereof). 

2.  Present :  constituting  the  whole  (or  a  majority)  of  the  Board 
of  Directors. 

3.  On  motion  duly  made  and  seconded,  Mr.  was  chosen  Chairman, 
and  Mr.                    was  appointed  Secretary  of  the  meeting. 

4.  The  waiver  of  notice  of  the  meeting,  signed  by  all  of  the  directors  of  the 
Company,  was  presented,  and  upon  motion  duly  made  and  seconded,  same  was 
ordered  inserted  in  the  minute  book,  immediately  following  the  minutes  of  this 
meeting. 

(Form  of  waiver  same  in  all  States.     See  Appendix.) 

5.  (Insert  following  clause  for  New  York  only.) 

Messrs.  and  were  appointed  Inspectors  of  Election  for 

the  ensuing  year. 

6.  The  following  persons  were  unanimously  elected  officers  of  the  Company  to 
hold  office  until  the  next  annual  election  of  officers  and  until  their  successors  are 
elected  and  qualify: 

President, 

First  Vice-President, 
Second  Vice-President, 
Third  Vice-President, 
Secretary, 
Treasurer, 
General  Manager, 
Counsel  (if  desired), 
Officers  present  accepted  office  and  assumed  their  duties. 

7.  (Insert  for  New  Jersey,  Nevada,  and  Delaware.) 

The  Secretary  was  then  duly  sworn,  and  subscribed  the  written  oath  presented 
at  the  meeting.     (Form  of  oath.     See  Appendix.) 

8.  (Where  director  resigns,  use  the  following  form  for  acceptance  of  resignation 
and  election  of  his  successor.) 

The  Secretary  presented  the  resignation  of  Mr.  as  director  of  the 

Company,  and  on  motion  duly  made  and  seconded,  same  was  accepted  and  ordered 
filed. 

Mr.  was  thereupon  elected  a  director  of  the  Company  to  fill  the 

vacancy   caused  by   the   resignation   of  .      (Form   of  resignation   see 

Appendix.     Same  in  all  States.) 

9.  On  motion  duly  made  and  seconded,  it  was 

Resolved,  that  a  corporate  seal  be,  and  the  same  hereby  is,  adopted  by  the 
Company,  the  same  to  contain  within  the  circle  the  words  "  Corporate  Seal,  19  ," 
and  around  the  margin  of  the  circle  the  words  "  Company  "  and  " 

(State  of  Incorporation)." 

10.  Upon  motion  duly  made  and  seconded,  it  was 

Resolved,  that  the  stock  certificates  presented  to  this  meeting  be,  and  they  hereby 
are,  adopted,  and  the  President  and  (see  note)  be  and  they  hereby  are  authorized 
to  issue  certificates  of  stock  as  called  for  by  the  Board  of  Directors. 

(Note.  President  and  Secretary  must  sign  in  South  Dakota;  in  New  York,  Arizona, 
Nevada,  West  Virginia,  District  of  Columbia,  and  New  Jersey,  President  and  Secretary  or 
Treasurer;  in  Delaware,  President  and  Treasurer.) 

11.  Upon  motion  duly  made  and  seconded  it  was 

Resolved,  that,  until  otherwise  ordered,  Bank  be,  and  it  hereby  is, 

designated  as  a  depository  of  the  funds  of  this  Company,  and  that  the  Treasurer  be, 
and  he  hereby  is,  authorized  from  time  to  time,  for  and  on  behalf  of  this  Company, 
to  make  or  sign  checks,  drafts,  notes,  agreements,  or  other  instruments  (which 
shall  be  countersigned  by  the  President),  to  endorse  checks,  drafts,  or  other  instru- 
ments; to  accept  drafts  or  to  procure  loans,  discounts  or  rediscounts  or  advances; 

818 


FORMS  AND   PRECEDENTS. 

to  do  all  acts  incidental  to  any  of  the  above  matters,  and  to  pay,  adjust,  or  secure 
any  transaction,  matter,  or  Lability;  and  to  do  all  acts  therein,  to  pay  all  sums  due 
or  to  become  due ;  to  accept  and  receive  notices  and  demands,  and  generally  to  do 
all  acts  and  things  with  reference  to  any  transaction  in  the  name  of  or  on  behalf  of 
this  Corporation  with  said  Bank,  or  in  carrying  on  its  business  relations 

therewith  which  said  Treasurer  may  see  fit. 

This  resolution  is  to  continue  iu  force  until  formally  rescinded  and  filing  of  due 
notice  thereof  with  said  Bauk. 

13.  Upon  motion  duly  made  and  seconded,  it  was 

Resolved,   that  the  principal  office  of  the  Company  in  the  State  of  , 

shall  be  established  and  maintained  at  No.  Street  in  the  City  of 

State  of  ;  and  be  it  further 

(The  following  inserted  for  New  Jersey,  Delaware,  Arizona,  and  "West 
Virginia.) 

Resolved,  that  (here  insert  name  of  agent)  residing  at  in  the  City  of 

,  State  of  ,  be,  and  he  hereby  is,  appointed  the  agent  of  this 

Company  upon  whom  process  against  this  Company  may  be  served;  and  be  it 
further 

Resolved,  that  the  President  and  Secretary  be,  and  they  hereby  are,  authorized 
and  directed  to  sign  and  seal  with  the  Company's  seal  a  certificate  of  authorizu 
to  said  (here  insert  name  of  agent)  in  the  form  presented  to  this  meeting. 

14.  Upon  motion  duly  made  and  seconded,  it  was 

Resolved,  that  the  principal  business  office  of  the  Company  be  established  and 
maintained  at  the  City  of  ,  State  of  ;  and  that  meetings  of 

the  Board  of  Directors  or  Executive  Committee  appointed  thereby  may  be  held 
thereat. 

15.  (Where  stock  is  issued  for  property,  patent  rights,  etc.,  insert  the  following 
clause :) 

Upon  motion  duly  made  and  seconded,  and  by  the  affirmative  vote  of  all  presentr 
the  following  resolution  was  unanimously  adopted: 

Whereas,  at  a  meeting  of  the  incorporators  of  this  Company  duly  held  on  the 
day  of  ,   19    ,   the  following  resolution  was    unanimously 

adopted : 

"  Whereas,  the  stockholders  and  Board  of  Directors  of  this  Compauy  have  re- 
ceived a  proposition  reading  as  follows,  to  wit :  To  the  stockholders  and  Board  >  >f 
Directors  of  the  Company. 

Gentlemen :  I,  the  undersigned,  am  the  owner  of  the  following  described  prop- 
erty, to  wit:  (insert  brief  description  of  property)  or  letters  patent  of 
numbered  heretofore  on  the  day  of  issued  to  me 

being  for  a  certain  new  and  useful  improvement  in  ). 

I  hereby  offer  to  sell,  assign,  and  transfer  to  your  Company  the  above-described 
property  (or  patent  rights)  in  consideration  of  the  issuance  to  me  or  nvj  nominees  or 
assigns,  within  thirty  days  from  date  hereof,  of  shares  of  the  capital  stock 

of  your  Company   of  the  par   value  of  dollars  per  share,  aggreg 

dollars  in  amount. 

This  offer  is  made  subject  to  acceptance  by  your  Corporation  within  thirty  days 
from  date  hereof.  If  the  said  oiler  is  not  accepted  within  said  time,  the  same  shall 
forthwith  become  null  and  void. 

Respectfully  submitted, 
Now,  therefore,  be  it 

Resolved,  that  the  Board  of  Directors  be,  and  they  hereby  arc,  empowered,  it 
they  deem  it  advisable  so  to  do,  to  purchase  the  propertj  (or  patent  rights)  de- 
scribed in  the  foregoing  proposition,  and  to  issue  shares  of  stock  oi  tin 
par  value  of  $  per  share,  aggregating  $  in  amount,  in  payment 
therefor,  to  said                   ,  his  nominees  or  assigns."     Ami 

\V hrreas  it  appears  advisable  to  the  Board  of  Directors  of  this  Company  to  ac- 
quire the  said  property  (or  patent  rights)  described  in  the  foregoing  resolutu 
the  incorporators  (or  stockholders)  of  this  Companyj  and 

Whereas  this  Board,  after  making  due  investigation  as  to  the  value  and  utility 
of  said  property  (or  patent  rights)  tor  the  purposes  of  the  Corporation,  are  ol  the 

Mil 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

opinion  that  the  said  properties  (or  patent  rights)  are  reasonably  worth  the  sum  of 
$  (at  which  price  the  same  are  hereby  appraised)  :  Now,  therefore  be  it 

Resolved,  that  this  Company  accept  the  offer  of  to  sell  to  it  the  prop- 

erty (or  patent  rights)  above  described,  under  the  terms  and  conditions  contained 
in  the  proposition  of  said  above  set  forth ;  and  be  it  further 

Resolved,  that  the  proper  officers  of  this  Company  be,  and  they  hereby  are,  di- 
rected and  empowered  to  issue  shares  of  the  capital  stock  of  this  Com- 
pany of  the  par  value  of  $  per  share,  aggregating  §  in  amount, 
to  ,  his  nominees  or  assigns  in  full  payment  for  the  said  property  (or 
patent  rights)  above  described. 

16.  (Where  stock  is  issued  for  services  performed  the  following  clause  should 
be  inserted.) 

Whereas,  at  a  meeting  of  the  incorporators  of  this  Company  duly  held  on  the 
day   of  ,    19     ,  the   following  resolution  was  unanimously 

adopted : 

"  Whereas  has  heretofore  and  between  the  day  of 

and  the  day  of  performed  certain  services  at  the  instance  and 

request  and  for  the  use  and  benefit  of  said  Company :  Now,  therefore, 

be  it 

Resolved,  that  the  Board  of  Directors  be,  and  they  hereby  are,  empowered,  if 

they  deem  it  advisable  so  to  do,  to  accept  said  services  above  described,  and  to  issue 

shares  of  stock  of  the  par  value  of  $  per  share,  aggregating 

%  in  amount,    in  payment  therefor,  to  said  ,   his  nominees  or 

assigns."     And 

Whereas  it  appears  to  the  Board  of  Directors  of  this  Company  that  the  above- 
described  services  were  necessary  in  the  premises ;  and 

Whereas  this  Board,  after  making  due  investigation  as  to  the  value  of  said  ser- 
vices, are  of  the  opinion  that  said  services  were,  and  the  same  hereby  are,  appraised 
at  the  sum  of  $  :  Now,  therefore,  be  it 

Resolved,  that  the  Board  of  Directors  of  this  Company  hereby  declare  the  above- 
described  services  heretofore  performed  on  behalf  of  this  Company  by  said 
were  necessary  for  the  business  of  this  Company,  and  that  the  same  are  reasonably 
worth  the  sum  of  dollars,  at  which  sum  we  do  hereby  appraise  the  same ; 

and  be  it  further 

Resolved,  that  the  proper  officers  of  this  Company  be,  and  they  hereby  are, 
directed  and   empowered  to  issue  shares   of  the   capital   stock  of  the 

Company  of  the  par  value  of  $  per  share,  aggregating  3  in 

amount,  to  his  nominees  or  assigns,  in  full  payment  for  the  services 

above  described. 

17.  Where  stock  has  beeu  subscribed  for  by  the  incorporators,  the  following 
clause  should  be  inserted  : 

Whereas,  at  a  meeting  of  the  incorporators  of  this  Company,  the  following  reso- 
lution was  adopted : 

"  Whereas  there  has  been  subscribed  for  by  (insert  names  of  incorporators) 
shares  of  the  capital  stock  of  this  Company  of  the  par  value  of  $ 
per  share,  no  part  of  which  has  been  paid  for  ;  and 

Whereas,  under,  the  resolution  heretofore  passed  at  this  meeting, 
shares  of  stock  are  to  be  issued  to  in  payment  of  property  purchased  by 

this  corporation ;  and 

Whereas  (here  insert  name  of  party  from  whom  property  is  purchased)  has 
agreed,  with  the  consent  of  said  incorporators,  that  the  stock  to  be  issued  to  him 
in  payment  of  said  property  shall  include  the  said  stock  subscribed  by  the  incor- 
porators :  Now,  therefore,  be  it 

Resolved,  that  the  Board  of  Directors  be,  and  they  hereby  are,  empowered  and 
directed  to  accept  a  proportionate  part  of  said  property  as  payment  on  the  part  of 
said  incorporators  of  their  subscriptions  for  stock  in  said  Company ;  and 

they  are  further  empowered  and  directed  to  issue  certificates  of  stock  to  said  incor- 
porators or  their  assigns  to  the  amount  of  their  respective  subscriptions."  Now, 
therefore,  be  it 

Resolved,  that  this  Company  accept,  and  hereby  does  accept,  as  payment  for 

820 


FORMS    AND    PRECEDENT-. 

said  shares  of  the  capital  stock  of  this  Company  subscribed  for  by  the 

incorporators  of  this  Company,  a  proportionate  part  of  the  property  agreed  to  be 
sold  to  the  Company  by  (here  insert  name  of  transferror  of  the  property  to  the  Com- 
pany) ;  and  be  it  farther 

Resolved,  that  the  proper  officers  of  this  Company  be,  and  they  are  hereby, 
authorized  and  empowered  to  issue  said  shares  of  stock  to  said  (here  insert  names 
of  incorporators)  and  their  nominees. 

IS.  (Where  stock  is  to  be  turned  back  into  the  treasury  of  the  Company  hi 
trust,  insert  the  following  clause  :) 

Upon  motion  duly  made  and  seconded,  and  by  the  affirmative  vote  of  all  present, 
the  following  resolution  was  unanimously  adopted: 

Whereas  is  the  owner  of  shares  of  the  capital  stock  of  the 

Company,  and  is  desirous  of  assigning  the  same  to  this  Company  with 
a  view  to  securing  the  necessary  funds  with  which  to  carry  on  the  business  of  this 
Company  and  to  provide  a  working  capital  therefor,  said  stock  to  be  held  by  said 
Company  at  all  times  in  trust,  and  to  be  disposed  of  under  the  directs  n  of  the 
Board  of  Directors  of  said  Company  with  a  view  to  securing  the  necessary  funds 
with  which  to  carry  on  the  business  of  this  Company  ;  and 

Whereas  the  Board  of  Directors  of  this  Company  believe  that  the  acceptance  of 
such  stock  is  necessary  to  secure  funds  with  which  to  carry  on  the  business  of  this 
Company  and  to  provide  a  working  capital  therefor:  Now,  therefore,  be  it 

Resolved,  that  the  President  and  Secretary  of  this  Company  be,  and  they  hereby 
are,  authorized  upon  the  transfer  by  said  Company  of  said 

shares  of  the  capital  stock  of  this  Company  in  trust,  to  make  and  execute  on  behalf 
of  this  Company  a  deed  of  trust  to  read  in  substance  as  follows,  to  wit : 

This  Agreement  entered  into  this  day  ,  19     ,  by  and  be- 

tween of  the  City  of  ,  State  of  ,  party  of  the 

first  part,  and  the  Company,  a  corporation  organized  and  existing  under 

the  laws  of  the  State  of  ,  party  of  the  second  part ; 

Witnesseth  as  follows  : 

First.  That  in  consideration  of  the  mutual  covenants  herein  contained,  said 
party  of  the  first  part  does  hereby  assign,  transfer,  and  set  over  unto  saitl  partj  of 
the  second  part  shares  of  the  capital  stock  of  said  Company 

of  the  par  value  of  dollars  each,  to  be  held  by  said  party  of  the  second 

part  in  trust,  and  to  be  disposed  of  under  the  direction  of  the  Board  of  Directors  of 
said  party  of  the  second  part,  with  a  view  to  securing  the  necessary  funds  with 
which  to  carry  on  the  business  for  which  said  Company  was  formed,  and 

to  provide  a  working  capital  therefor. 

Second.  Said  party  of  the  second  part  hereby  accepts  the  assignment  and 
transfer  of  said  shares  of  the  capital  stock  of  said  Company 

to  be  held  by  and  'disposed  of  by  it  for  the  purposes  above  stated. 

Third.  Said  party  of  the  second  part  further  covenants  and  agrees  thai  it  will  at 
all  times  hold  and  dispose  of,  under  such  terms  and  conditions  as  its  Board  of  Direc- 
tors shall  prescribe,  said  shares  of  the  capital  stock  of  said 
Company  for  the  sole  and  exclusive  use  and  benefil  of  said  stockholders  of  said 
Company,  with  a  view  to  securing  adequate  and  sufficient  working 
capital  with  which  to  carry  on  the  business  for  which  said  Company  was 
formed. 

In  Witness  Whereof,  said  parties  of  the  first  and  second  parts  have  hereunto  set 
their  hands  and  seals  this  day  of,  l'J 

,  Party  of  the  first  part. 
( 'ompany. 

By 

,  Pretident. 

Attest : 

,  Secretary- 

I'arly  of  the  second  pari. 

Upon  motion  duly  made  and  secouded,  and  by  the  affirmative  rote  of  al]  present, 

it  was 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

Resolved,  that  this  Company  endeavor  to  sell  the  above  stock  for  the  purposes 
outlined,  and  that  the  President  and  Secretary  be,  and  they  hereby  are,  authorized 
to  sell  said  stock  on  behalf  of  this  Company  upon  such  terms  as  to  them  may  seem 
most  advantageous  to  this  Company,  and  that  they  report  progress  in  the  sale  of 
such  stock  from  time  to  time,  and  whenever  required  by  the  Board  of  Directors. 

(If  preferred  a  resolution  may  be  passed,  fixing  the  minimum  price  at  which  the 
stock  may  be  sold.) 

20.    (Insert  the  following  clause  for  New  York  only.) 

In  compliance  with  the  laws  of  the  State  of  New  York,  the  Secretary  was 
ordered  to  file  a  duplicate  original  of  the  certificate  of  incorporation  of  the  Company 
in  the  office  of  the  County  Clerk  of  County. 

No  further  business  was  presented,  and  on  motion  the  meeting  adjourned. 

,  Secretary. 


Approved : 


,  Chairman. 
APPENDIX. 


Secretary's  Oath. 

State  of  1  ss  • 

County  of  >  .  .    . 

I,  Secretary  of  the  Company,  a  corporation  organized  and  existing 

under  the  laws'  of  the  State  of  ,  being  first  duly  sworn,  do  hereby  swear 

that  I  will  faithfully  perform  the  duties  of  Secretary  of  the  Company 

as  prescribed  by  the  laws  of  and  by-laws  of  the  Company  and 

by  the  resolutions  of  the  Board  of  Directors  of  said  Company. 

Subscribed  and  sworn  to  before  me  this  day  of  ,  191  . 

,  Notary  Public. 

Waiver  of  Notice.     First  Meeting  of  Directors. 

We,  the  undersigned,  constituting  the  full  Board  of  Directors  of  the 
Company,  a  corporation  organized  and  existing  under  the  laws  of  the  State  of 
,  do  hereby  waive  notice  of  the  organization  meeting  of  the  Board  of 
Directors  of  said  Company,  and  of  the  nature  and  character  of  the  business  to  be 
thereat  transacted.  We  hereby  agree  that  said  organization  meeting  may  be  held 
at  the  office  of  the  Company  in  the  City  of  ,  State  of  ,  on  the 

day  0f  ,  at  o'clock  in  the  noon  of  said  day.     We  fur- 

ther consent  that  any  business  may  be  transacted  thereat  which  may  be  deemed 
advisable  by  the  directors  present  at  said  meeting. 


Resignation  of  Director. 

I  hereby  tender  my  resignation  as  Director  of  the  Company,  to  take 

effect  when  accepted  by  said  Company. 

COMPOSITE  FORM  OF  BY-LAWS. 

For  New  York,  New  Jersey,  South  Dakota,  Delaware,  Arizona,   West  Virginia, 

Nevada,  etc. 

Article  I.    Title,  Location. 

Section  1.   The  title  of  the  Corporation  is : 

Section  2.   The  principal  office  shall  be  in  the  City  of  ,  State  of 

.     (The  agent  in  charge  of  said  office  upon  whom  process  against  the 
Company  may  be  served  is  .) 

822 


FORMS   AXD    PRECEDENTS. 

Section  3.   The  Company  may  also  have  an  office  in.  the  City  of  , 

State  of  ,  and  also  have  offices  in  such  other  places  as  the  Board  of 

Directors  may  appoint. 

Article  II.    Meetings  of  Stockholders. 

Section  1.  The  annual  meeting  of  the  stockholders  of  the  Company  shall  be 
held  at  the  principal  office   of  the  Company   in  the   City  of  "    ,   State 

of  ,  at  o'clock,       M.,    on  the  day   of  in 

each  year,  if  not  a  legal  holiday,  and  if  a  legal  holiday,  then  on  the  next  sui 
ing  not  a  legal  holiday,  for  the  purpose  of  electing  a  Board  of  Din 

and  for  the  transaction  of  such  other  business  as  may  properly  be  put  before  the 
meeting.  It  shall  be  the  duty  of  the  Secretary  to  cause  notice  of  each  annual 
meeting  of  the  Company,  to  be  given  to  each  stockholder  of  record  of  the  <  iompturj 
(Note  A)  by  publication  thereof  in  a  newspaper  published  in  the  county  where 
such  election  is  held  at  least  once  in  each  week  for  two  successive  weeks  immediately 
preceding  such  meeting;  and  by  mailing  to  each  stockholder,  at  [east  two  weeks 
prior  to  said  meeting,  a  copy  of  such  notice  addressed  to  him  at  his  post-office 
address  as  the  same  shall  appear  on  the  stock  books  of  the  Corpora!  inn. 

(Note  A.  In  New  York  notice  of  annual  meetings  must  be  by  publication  and  mailing 
notices.    In  other  States  the  notice  may  usually  be  given  either  by  publication  or  by  mailing!) 

(Note,  place  of  meeting.)  In  South  Dakota  meetings  should  be  held  at  the  business 
offices  as  provided  in  the  articles  of  incorporation.  In  Delaware  the  first  meeting  of  stock- 
holders may  be  held  within  or  without  the  State;  subsequent  meetings  are  held  in  the  place 
fixed  by  the  by-laws.  In  New  York  and  New  Jersey  within  the  State.  In  Nevada  and 
West  Virginia  meetings  may  be  held  outside  of  the  State  if  the  by-laws  so  provide. 

Section  2.  Special  meetings  of  stockholders  shall,  at  the  request  of  a  majority 
of  the  directors,  or  at  the  request  of  a  majority  of  the  stockholders,  be  called  by  the 
President,  by  mailing  notice  thereof,  stating  the  object  of  and  the  business  to  be 
transacted  at  said  meeting  at  least  ten  days  prior  to  the  date  of  the  meeting,  to 
each  stockholder  of  record  at  his  or  her  post-office  address  as  the  same  appears  on 
the  records  of  the  stock  books  of  the  Corporation. 

Section  3.  A  majority  in  amount  of  the  stock  outstanding  having  voting 
powers,  represented  by  the  holders  thereof  in  person  or  by  proxy,  shall  be  requisite 
at  every  meetiug  to  constitute  a  quorum,  except  when  otherwise  provided  by  statute 
or  by  the  certificate  of  incorporation. 

Section  4.  No  stockholder  shall  be  entitled  to  vote  at  any  regular  or  special 
meeting  of  the  stockholders  of  the  corporation  either  in  person  or  by  proxy  onleas 
his  name  shall  appear  as  such  stockholder  on  the  transfer  books  of  the  corporation 
at  least  days  immediately  preceding  such  meeting. 

(Note  A.  In  New  York  stock  transfer  books  may  be  closed  within  forty  days  next 
preceding  the  date  of  any  corporate  election.  In  New  Jersey,  Nevada,  and  Delaware  within 
twenty  days  of  such  election.     In  West  Virginia  no  definite  date  is  fixed.) 

(Where  cumulative  voting  for  directors  has  been  provided  for,  insert  the  follow- 
ing provision  (Note  B).) 

In  all  elections  for  directors,  each  stockholder  may  cumulate  his  shares,  and 
give  one  candidate  as  many  votes  as  the  number  of  his  shares  of  stock  shall  equal, 
or  distribute  them  on  the  same  principle  among  as  many  candidates  as  be  shall 
think  fit. 

(Note  B.  Cumulative  voting,  if  desired,  should  always  be  provided  for  In  the  certifi- 
cate of  incorporation.  In  West  Virginia  cumulative  voting  for  directors  is  require. 1  l>y  it&tntfl 
and  must  appear  in  by-laws.  In  Nevada  stockholders  have  no  right  of  voting  cnmohUin  Ij 
unless  articles  of  incorporation  or  by-laws  otherwise  provide.) 

Section  5.  The  directors  shall  cause  the  secretary  or  other  officer  haying 
charge  of  the  stock  transfer  book  and  the  stock  books  oi  the  corporation  to  make, 

at  least  ten  days  before  every  election  alter  the  firsl  election,  a  full,  true,  and  o 

plete  list,  in  alphabetical  order,  of  all  stockholders  entitled  to  vote  at  the  ensuing 
election,  with  the  residence  of  each,  and  the  number  of  shares  held  by  each,  vhiou 

823 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

list  shall,  at  all  times  during  the  usual  hours  of  business,  be  kept  at  such  principal 
and  registered  office  open  to  the  inspection  of  any  stockholder  at  said  office. 

(Note.     The  foregoing  by-law  is  obligatory  only  in  New  Jersey  and  Nevada.) 

Section  6.  Two  inspectors  of  election  shall  be  elected  at  the  annual  meeting  of 
stockholders  to  hold  office  during  the  year  intervening  between  said  annual  election 
at  which  they  are  chosen,  and  the  succeeding  annual  meeting.  Such  inspectors 
shall  have  power  to  receive  proxies  and  to  pass  upon  the  balloting  of  the  same  ;  to 
decide  all  questions  relative  to  the  right  of  stockholders  to  vote  in  the  election  of 
directors;  and  shall  also  receive  and  count  all  ballots  for  directors.  Before  such 
inspectors  shall  be  qualified  to  act,  they  shall  first  be  duly  sworn  to  faithfully  per- 
form  the  duties  of  their  office  prescribed  by  the  statutes  of  the  State  and  the  by- 
laws of  the  corporation.  No  person  who  is  a  candidate  for  the  office  of  director 
shall  act  as  inspector  at  any  election  for  directors. 

Section  7.  (For  New  York  only.)  Two  inspectors  of  election  shall  be  elected 
at  each  annual  meeting  of  the  stockholders  to  conduct  the  election  of  directors  for 
the  ensuing  year,  except  that  the  inspectors  who  are  to  serve  for  the  first  year  of 
the  Corporation  shall  be  appointed  by  the  Board  of  Directors  at  their  first  meeting. 
Such  inspectors  shall  be  sworn  to  the  faithful  discharge  of  their  duty,  and  in  event 
of  the  absence,  inability,  or  refusal  of  either  to  serve,  the  meeting  may  appoint  an 
inspector  in  his  place. 

Section  8.  At  the  annual  meeting  of  stockholders  the  following  shall  be  the 
order  of  business : 

1.  Calling  of  meeting  to  order  by  President  or  other  presiding  officer.^ 

2.  Reading  notice  of  meeting  by  Secretary,  and  affidavit  showing  service  of  said 
notice  on  all  stockholders  of  record. 

3.  Reports  of  officers. 

4.  Appointment  of  inspectors  of  election  of  directors. 

5.  Election  of  directors. 

6.  Miscellaneous  business. 

Section  9.  At  all  meetings  of  stockholders,  upon  all  questions  except  the  elec- 
tion of  directors,  all  voting  shall  be  viva  voce,  unless  the  statute  of  the  State  of 
require  a  stock  vote  to  be  taken.  In  the  election  of  directors  at  the 
annual  meeting,  or  otherwise,  the  Secretary  of  the  Corporation  may  be  instructed, 
by  a  motion  duly  made  and  carried,  to  cast  the  vote  of  all  stockholders  present  for 
the  election  of  directors,  to  be  designated  in  the  motion  so  made. 

Article  III.    Directors. 

Section  1.  The  property  and  business  of  the  Corporation  shall  be  managed  by 
a  Board  of  Directors,  in  number,  of  whom  at  least  (Note  A)  shall 

be  a  resident  of  ,  shall  be  chosen  from  the  stockholders  annually,  and 

shall  hold  office  until  others  are  chosen  and  qualified  in  their  stead.     The  directors 
shall  each  hold  at  least  (Note  B)  shares  of  stock. 

(Note  A.  In  New  York,  New  Jersey,  and  Delaware  at  least  one  director  shall  be  a  resi- 
dent of  the  State;  in  Arizona,  Nevada,  and  South  Dakota  omit  provision  as  to  residence;^  in 
West  Virginia  directors  need  not  be  residents  of  the  State  if  by-laws  so  provide.  In  West 
"Virginia  number  of  directors  must  be  set  out  in  by-laws.) 

(Note  B.  In  New  York,  New  Jersey,  Arizona,  West  Virginia,  South  Dakota,  and 
Nevada  each  director  should  ordinarily  hold  at  least  one  share ;  in  Delaware,  three  shares.) 

Section  2.  Any  vacancies  occurring  in  the  Board  of  Directors  before  the  ex- 
piration of  the  term  of  any  director  shall  be  filled  by  a  majority  vote  of  the  remain- 
ing directors  at  any  regular  or  special  meeting  of  the  Board. 

Section  3.  The  Board  of  Directors  may  be  convened  at  any  time  by  the 
President,  upon  two  days'  notice  given  to  each  director.  In  the  event  of  the 
refusal  of  the  President  to  call  a  meeting  of  the  Board,  said  meeting  may  be 
called  at  any  time  by  a  majority  of  the  Board  upon  two  days'  notice  to  each  mem- 
ber thereof. 

824 


FORMS    AND    PRECEDENTS. 

Section  4.  The  Board  of  Directors  may,  if  they  see  fit,  adopt  additional  rules 
and  regulations  conformable  to  law  for  their  own  government  and  control. 

Article  IV.     Meetings  of  Directors. 

Section  1.  Meetings  of  the  Board  of  Directors  of  this  Company  or  of  the 
Executive  Committee  appointed  thereby,  may  be  held  either  at  the  principal  office 
of  the  Company  at  ,  County  of  ,  and  State  of  ,  or 

at  the  business  office  of  the  Company  to  be  opened  and  maintained  by  it  at  the  City 
of  ,  State  of 

Article  Y.    Powers  of  Directors. 

Section  1.  The  Board  of  Directors  shall  have  management  of  the  business  of 
the  Company,  and  in  addition  to  the  powers  and  authorities  by  these  by-laws  ex- 
pressly conferred  upon  them,  may  exercise  all  such  powers,  and  do  all  such  acts 
and  things  as  may  be  exercised  or  done  by  the  Corporation,  but  subject,  neverthe- 
less, to  the  provisions  of  the  statute  of  the  charter  and  of  these  by-laws,  and  to  any 
regulations  from  time  to  time  made  by  the  stockholders,  provided  that  no  regula- 
tions so  made  shall  invalidate  any  prior  act  of  the  directors  which  would  have  been 
valid  if  such  regulation  had  not  been  made. 

Section  2.  Without  prejudice  to  the  general  powers  conferred  by  the  last  pre- 
ceding clause  and  the  other  powers  conferred  by  these  by-laws,  it  is  hereby  ex- 
pressly declared  that  the  Board  of  Directors  shall  have  the  following  powers,  that  is 
to  say  : 

a.  To  purchase  or  otherwise  acquire  for  the  Company  any  property,  rights,  or 
privileges  which  the  Company  is  authorized  to  acquire  at  such  prices  and  on  such 
terms  and  conditions  and  for  such  consideration  as  they  think  fit. 

b.  At  their  discretion  to  pay  for  any  property  or  rights  acquired  by  the  Com- 
pany, either  wholly  or  partially  in  money,  or  in  stock,  bonds,  debentures,  or  other 
securities  of  the  Company. 

c.  To  appoint  and  at  their  discretion  to  remove  or  suspend  subordinate  man- 
agers, officers,  assistants,  clerks,  agents,  and  servants  permanently  or  temporarily, 
as  they  may  from  time  to  time  think  fit,  and  to  determine  their  duties,  and  fix,  and 
from  time  to  time  change,  their  salaries  or  emoluments,  and  to  require  security  in 
such  instances  and  in  such  amounts  as  they  think  fit. 

d.  To  confer  by  resolution  upon  any  officer  of  the  Company  the  right  to  choose, 
remove,  or  suspend  such  subordinate  officers,  agents,  or  factors. 

e.  To  appoint  any  person  or  persons  to  accept  and  hold  in  trust  for  the  Com- 
pany auy  property  belonging  to  the  Company,  or  in  which  it  is  interested,  or  for 
any  other  purpose,  and  to  execute  and  do  all  such  duties  and  things  as  maybe  requi- 
site in  relation  to  any  such  trust. 

f.  To  determine  who  shall  be  authorized  to  sign  on  the  Company's  behalf  bills, 
notes,  receipts,  acceptances,  endorsements,  checks,  releases,  contracts,  and  documents. 

ff.  From  time  to  time  to  provide  for  the  management  of  the  atl'airs  of  the  Com- 
pany at  home  or  abroad  in  such  manner  as  they  think  fit,  and,  in  particular,  from 
time  to  time  to  delegate  any  of  the  powers  of  the  Board  of  Directors  (which  may 
be  lawfully  delegated  (Note  A)  to  any  committee,  officer,  or  agent,  and  to  appoint 
any  persons  to  be  the  agents  of  the  Company,  with  such  powers  (including  the 
power  to  sub-delegate)  and  upon  such  terms  as  may  be  thought  fit. 

(Note  A.    Insert  for  New  York  only.) 

Article  VI.     Executive  Committek  and  Other  Committees. 

Section  1.    The  Board  of  Directors  may  appoint  of  their  own  number 

to  act  as  an  Executive  Committee  to  serve  during  the  life  of  the  board  that  ap- 
pointed it. 

(The  powers  of  the  Executive  Committee  depend  upon  the  statutes,  and  there- 
fore the  above  will  vary  with  reference  to  particular  powers  that  may  be  delegated 
by  the  board  to  committees.) 

825 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

Section  2.  The  Executive  Committee  shall  have  entire  control  and  supervision 
of  all  of  the  property  and  business  affairs  of  the  corporation,  and  shall  have  and  exer- 
cise all  the  powers  and  privileges  which  are  possessed  and  exercised  by  the  Board 
of  Directors. 

Section  3.  The  Board  of  Directors  may  appoint  such  other  committees  as  may 
seem  to  them  advisable. 

Article  VII.    Officers. 

Section  I.  The  newly  elected  Board  of  Directors  shall  meet  as  soon  as  prac- 
ticable after  the  annual  meeting  of  stockholders  for  the  purpose  of  organization.  At 
such  meeting  the  board  shall  elect  all  the  officers  of  the  Corporation  prescribed  by 
the  by-laws,  and  shall  appoint  such  subordinate  officers  as  to  the  board  may  seem 
proper  and  necessary.  All  of  such  officers  shall  serve  until  the  next  annual  election. 
Vacancies  occurring  among  the  officers  may  be  filled  by  the  Board  of  Directors  for 
the  unexpired  term  at  any  regular  or  special  meeting  of  the  board. 

Section  2.  The  President  shall  preside  at  all  meetings  of  the  stockholders  and 
of  the  Board  of  Directors.  Subject  at  all  times  to  the  control  of  the  Board  of 
Directors,  he  shall  have  general  charge  of  the  busiuess  of  the  corporation,  and 
shall  execute  in  its  name  all  contracts,  bonds,  and  other  obligations.  In  conjunction 
with  the  (here  fill  in  the  name  of  the  other  officer  who  is  authorized  to 

sign  stock  certificates)  he  shall  sign  all  certificates  of  the  shares  of  the  capital  stock 
of  the  Company.  . 

Section  3.  The  first,  second,  and  third  Vice-Presidents  shall,  in  the  absence 
or  incapacity  of  the  President,  perform  the  duties  of  that  officer  in  succession  accord- 
ing to  their  rank  unless  the  board  shall  otherwise  determine. 

Section  4.  The  Treasurer  shall  be  the  fiscal  officer  of  the  Company,  and  as 
such  shall  be  the  custodian  of  all  moneys,  bonds,  notes,  and  other  securities  belong- 
ing to  the  corporation.  He  shall  have  power  to  indorse  in  behalf  of  the  corporation 
alf  checks,  notes,  or  other  obligations,  payable  to  the  order  of  the  corporation,  and 
shall  deposit  the  same  to  the  credit  of  the  corporation  in  some  bank  designated  by 
the  Board  of  Directors  of  the  corporation  for  that  purpose.  He  shall  have  author- 
ity (if  some  officer  is  to  sign  with  him  at  this  point,  fill  in  the  following,  "  in  con- 
junction with  the  President")  to  sign  all  checks,  notes,  and  bills  made  by  the 
Company.  He  shall  sign  with  the  President  all  certificates  of  shares  of  the 
capital  stock  of  the  Company  (Note  A).  He  shall  cause  to  be  kept  full  and 
complete  books  showing  all  receipts  and  disbursements  made  by  him  for  and  in 
behalf  of  the  corporation. 

(Note  A.  The  President  and  Secretary  must  sign  in  South  Dakota.  In  New  York, 
Arizona,  West  Virginia,  New  Jersey,  ordinarily  the  President  and  Secretary  or  Treasurer. 
In  Delaware,  the  President  and  Treasurer.) 

Section  5.  The  Secretary  shall  keep  the  minutes  of  the  meetings  of  the  stock- 
holders and  of  the  Board  of  Directors.  He  shall  be  the  custodian  of  the  seal 
of  the  corporation,  and  shall  affix  the  same  to  all  contracts  authorized  by  the 
Board  of  Directors  of  the  corporation.  He  shall  attend  to  the  sending  out  of  all 
notices  of  meetings  of  the  stockholders  and  of  the  Board  of  Directors.  In  con- 
junction with  the  President  he  shall  sign  all  certificates  of  stock  of  the  corporation. 
(See  Sec.  4,  Note  A.)  He  shall  be  sworn  to  the  faithful  performance  of  the  duties 
of  his  office.     (See  Note  A.) 

(Note  A.    Necessary  in  Delaware,  Nevada,  and  New  Jersey,  and  usually  provided.) 

The  following  section  should  be  inserted  where  counsel  is  provided  for : 
Section  6.  The  counsel  of  the  Company  shall  prepare  all  such  contracts  and 
agreements  required  in  the  business  of  the  Company  as  may  be  referred  to  him  by 
its  officials ;  he  shall  inspect  and  pass  upon  all  instruments  as  may  be  presented  to 
the  Company  and  be  of  sufficient  importance  to  justify  such  examination.^  He 
shall  also  advise  with  the  officers  of  the  Company  in  such  legal  matters  pertaining  to 
the  affairs  of  the  Company  as  may  require  his  consideration. 

826 


FORMS    AXD    PRECEDENTS. 


Article  YIIL    Capital  Stock. 


Section  1.  Subscriptions  to  the  capital  stock  shall  be  payable  as  and  when 
directed  by  the  Board  of  Directors  of  the  Company. 

(Note.  If  preferred  stock  is  provided  for,  the  provisions  and  condition  of  its  issue  should 
be  set  forth  here. 

If  stock  is  to  be  made  full  paid  in  the  beginning,  in  consideration  of  the  transfer  of  property, 
etc.,  Section  1  may  be  omitted.) 

Section  2.  The  certificates  for  shares  of  the  capital  stock  of  the  Company  shall 
be  hi  such  form,  not  inconsistent  with  the  certificate  of  incorporation,  as  shall  be 
prepared  or  be  approved  by  the  Board  of  Directors.  The  certificates  shall  be  signed 
by  the  President  or  a  Vice-President,  and  also  by  the  Treasurer  (or  Secretary)  (see 
Art.  VII,  see.  4,  Note  A).  All  certificates  shall  be  consecutively  numbered. 
The  name  of  the  person  owning  the  shares  represented  thereby,  with  the  number  of 
such  shares  and  the  date  of  issue,  shall  be  entered  on  the  Company's  books.  All 
certificates  surrendered  to  the  Company  shall  be  cancelled,  and  no  new  certificate 
shall  be  issued  until  the  former  certificate  for  the  same  number  of  shares  shall  have 
been  surrendered  and  cancelled. 

Section  3.  Shares  in  the  capital  stock  of  the  Company  shall  be  transferred  only 
on  the  books  of  the  Company  by  the  holder  thereof  in  person,  or  by  his  attorney, 
upon  surrender  and  cancellation  of  certificates  for  a  like  number  of  shares. 

Section  4.  Whenever  the  capital  stock  of  the  Corporation  is  increased  each 
stockholder  shall  be  entitled  to  subscribe  for  an  amount  of  such  increased  capital 
stock  equal  in  proportion  to  that  which  the  number  of  shares  of  stock  owned 
by  him  bears  to  the  total  number  of  shares  of  stock  issued  and  outstanding  at  the 
time  of  such  increase. 

Article  IX.    Dividends. 

Section  1.  The  Board  of  Directors  may  declare  dividends  from  the  surplus  or 
from  the  net  profits  of  the  corporation  at  such  times  as  may  be  deemed  advisable. 

Article  X.     Seal. 

Section  1.  The  Board  of  Directors  shall  provide  a  suitable  seal,  containing 
within  the  circle  the  words  "  Corporate  Seal,  19  "     and  around  the  margin 

of  the  single   circle   the   words  "  Company,  (insert   State   of 

Incorporation)". 

Article  XI.   Notice. 

Section  1.  Whenever,  under  the  provisions  of  these  by-laws,  notice  is  required 
to  be  given  to  any  director,  officer,  or  stockholder,  it  shall  not  be  construed  to  be 
limited  to  personal  notice,  but  such  notice  may  be  given  in  writing  by  depositing 
the  same  in  the  post-office  or  letter-box  in  a  postpaid  wrapper,  addressed  to  such 
director,  officer,  or  stockholder,  at  his  or  her  address  as  the  same  appears  in  the 
books  of  the  corporation,  and  the  time  when  the  same  shall  be  mailed  shall  be 
deemed  to  be  the  time  of  the  giving  of  such  notice. 

Article   XII.  Waiver  of  Notice. 

Section  1.  Any  notice  required  to  be  given  either  by  statute  or  by  any  by-law 
of  the  corporation,  may  be  waived  in  writing  by  the  party  to  whom  such  notice  is 
to  be  sent. 

Article  XIII.  Amendments. 

Section  1.  Any  by-law  may  be  amended  at  any  annual  meeting  of  stockhold- 
ers without  notice  thereof  being  given  in  advance  of  such  meeting;  or  the  same 
may  be  amended  at  any  special  meeting  of  the  stockholders,  provided  notice  of  the 

827 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

proposed  amendment  is  given  in  the  notice  of  said  meeting.  Tor  the  purpose  of 
amending  by-laws,  provided  a  quorum  be  present,  a  majority  vote  of  the  stockhold- 
ers represented  at  said  meeting,  shall  be  sufficient. 

(Where  the  statutes  of  the  state  permit  the  delegation  of  power  to  adopt  or 
amend  by-laws  by  the  stockholders  to  the  directors,  the  following  clause  may  be 
inserted  in  lieu  of  the  foregoing:) 

Section  2.  These  by-laws  may  be  amended  at  any  directors'  meeting  by  a 
majority  vote  of  the  full  Board  of  Directors,  provided  the  proposed  amendment  is 
inserted  in  the  notice  of  the  meeting. 

Section  3.  In  all  cases,  whether  amended  by  the  Board  of  Directors  or  by 
the  stockholders,  a  copy  of  such  amended  by-laws  shall  be  sent  to  each  stockholder 
within  ten  days  after  the  adoption  of  the  same. 

(Note  A.  In  South  Dakota  and  West  Virginia  the  Board  of  Directors  may  not  be  given 
such  power  to  "  make,  etc."  by-laws.  Certificate  of  incorporation  should  generally  provide 
for  amendments  bv  directors  where  this  power  is  desired.) 

(Note  B.     What  constitutes  a  valid  vote  depends  upon  the  statutes  of  each  State.) 

BY-LAWS   OF  UNITED  STATES  STEEL  CORPORATION, 
AS   ON  APRIL  30,   1907. 

Article   I.   Stockholders. 

Section  1.  Annual  meeting.  The  annual  meeting  of  the  stockholders  of  the 
Company  shall  be  held  annually  at  the  principal  office  of  the  Company  in  the  State 
of  New  Jersey,  at  twelve  o'clock,  noon,  on  the  third  Monday  of  April  in  each  year, 
if  not  a  legal" holiday,  and  if  a  legal  holiday  then  on  the  next  succeeding  Monday 
not  a  legal  holiday,  for  the  purpose  of  electing  directors,  and  for  the  transaction  of 
such  other  business  as  may  be  brought  before  the  meeting ;  and  the  terms  of  office 
of  the  directors  of  the  several  classes  shall  continue  until  the  election  of  their  suc- 
cessors at  such  meeting  as  provided  in  Article  II.  hereof.  It  shall  be  the  duty  of 
the  Secretary  to  cause  notice  of  each  annual  meeting  to  be  published  once  in  each 
of  the  four  calendar  weeks  next  preceding  the  meeting  in  at  least  one  newspaper 
in  each  of  the  following  places :  Jersey  City,  N.  J.,  New  York,  N.  Y.,  Chicago, 
111.,  and  Pittsburg,  Pa.  Nevertheless  a  failure  to  publish  such  notice,  or  any 
irregularity  in  such  notice,  or  in  the  publication  thereof,  shall  not  affect  the  validity 
of  any  annual  meeting,  or  of  any  proceedings  at  any  such  meeting. 

Section  2.  Special  Meetings.  Special  meetings  of  the  stockholders  may  be 
held  at  the  principal  office  of  the  Company  in  the  State  of  New  Jersey,  whenever 
called  in  writing,  or  by  vote  by  a  majority  of  the  Board  of  Directors. 

Notice  of  each  special  meeting,  indicating  briefly  the  object  or  objects  thereof, 
shall  by  the  Secretary  be  published  once  in  each  of  the  four  calendar  weeks  next 
preceding  the  meeting,  in  at  least  one  newspaper  in  each  of  the  following  places : 
Jersey  City,  N.  J.,  New  York,  N.  Y.,  Chicago,  111.,  and  Pittsburg,  Pa.  Neverthe- 
less if  all' the  stockholders  shall  waive  notice  of  a  special  meeting,  no  notice  ot 
such  meetino-  shall  be  required ;  and  whenever  all  the  stockholders  shall  meet  in 
person  or  by  proxy,  such  meeting  shall  be  valid  for  all  purposes  without  call  or 
notice,  and  at  such  meeting  any  corporate  action  may  be  taken. 

Section  3.  Quorum.  At  any  meeting  of  the  stockholders  the  holders  ot  one 
third  of  all  of  the  shares  of  the  capital  stock  of  the  Company,  present  in  person  or 
represented  by  proxy,  shall  constitute  a  quorum  of  the  stockholders  for  all  pur- 
poses, unless  the  representation  of  a  larger  number  shall  be  required  by  law,  and  in 
that  case  the  representation  of  the  number  so  required  shall  constitute  a  quorum 

If  the  holders  of  the  amount  of  stock  necessary  to  constitute  a  quorum  shall  tail 
to  attend  in  person  or  by  proxy  at  the  time  and  place  fixed  by  these  by-laws  for  an 
annual  meeting,  or  fixed  by  notice  as  above  provided  for  a  special  meeting  called 
by  the  directors,  a  majority  in  interest  of  the  stockholders  present  in  person  or  by 
proxy  may  adjourn,  from  time  to  time,  without  notice  other  than  by  announcement 
at  the  meeting,  until  holders  of  the  amount  of  stock  requisite  to  constitute  a 
quorum  shall  attend.     At  any  such  adjourned  meeting  at  which  a  quorum  shall  be 

828 


FORMS    AXD    PRECEDENTS. 

present,  any  business  may  be  transacted  which  might  have  been  transacted  at  the 
meeting  as  originally  notified. 

Section  4.  Organization.  The  chairman  of  the  Board,  and  in  his  absence  the 
chairman  of  the  Finance  Committee,  and  in  the  absence  of  both  the  President  shall  call 
meetings  of  the  stockholders  to  order,  and  shall  act  as  chairman  of  such  meetings. 

The  Board  of  Directors  may  appoint  any  stockholder  as  chairman  of  any  meet- 
ing in  the  absence  of  the  chairman  of  the  Board  and  of  the  chairman  of  the  Finance 
Committee  and  of  the  President. 

The  Secretary  of  the  Company  shall  act  as  secretary  at  all  meetings  of  the  stock- 
holders ;  but  in  the  absence  of  the  Secretary  at  any  meeting  of  the  stockholders  the 
presiding  officer  may  appoint  any  person  to  act  as  secretary  of  the  meeting. 

Section  5.  Voting.  At  each  meeting  of  the  stockholders,  every  stockholder 
shall  be  entitled  to  vote  in  person,  or  by  proxy  appointed  by  instrument  in  writing 
subscribed  by  such  stockholder  or  by  his  duly  authorized  attorney,  and  delivered  to 
the  inspectors  at  the  meeting ;  and  he  shall  have  one  vote  for  each  share  of  stock 
standing  registered  in  his  name  at  the  time  of  the  closing  of  the  transfer  books  for 
said  meeting.  The  votes  for  directors,  and,  upon  demand  of  any  stockholder,  the 
votes  upon  any  question  before  the  meeting,  shall  be  by  ballot. 

At  each  meeting  of  the  stockholders  a  full,  true,  and  complete  list,  in  alphabeti- 
cal order,  of  all  of  the  stockholders  entitled  to  vote  at  such  meeting,  aud  indicating 
the  number  of  shares  held  by  each,  certified  by  the  Secretary  or  by  the  Treasurer, 
shall  be  furnished.  Only  the  persons  in  whose  names  shares  of  stock  stand  on  the 
books  of  the  Company  at  the  time  of  the  closing  of  the  transfer  books  for  such 
meeting,  as  evidenced  by  the  list  of  stockholders  so  furnished,  shall  be  entitled  to 
vote  in  person  or  by  proxy  on  the  shares  so  standing  in  their  names. 

Prior  to  any  meeting,  but  subsequent  to  the  time  of  closing  the  transfer  books 
for  such  meeting,  any  proxy  may  submit  his  powers  of  attorney  to  the  Secretary 
or  to  the  Treasurer  for  examination.  The  certificate  of  the  Secretary  or  of  the 
Treasurer,  as  to  the  regularity  of  such  powers  of  attorney,  and  as  to  the  number  of 
shares  held  by  the  persons  who  severally  and  respectively  executed  such  powers  of 
attorney,  shall  be  received  as  prima  facie  evidence  of  the  number  of  shares  represented 
by  the  holder  of  such  powers  of  attorney  for  the  purpose  of  establishing  the 
presence  of  a  quorum  at  such  meeting  and  of  organizing  the  same,  and  for  all  other 
purposes. 

Section  6.  Inspectors.  At  each  meeting  of  the  stockholders  the  polls  shall  be 
opened  and  closed,  the  proxies  and  ballots  shall  be  received  and  be  taken  in  charge, 
and  all  questions  touching  the  qualification  of  voters  and  the  validity  of  proxies 
and  the  acceptance  or  rejection  of  votes,  shall  be  decided  by  three  inspectors. 
Such  inspectors  shall  be  appointed  by  the  Board  of  Directors  before  or  at  the  meet- 
ing, or,  if  no  such  appointment,  shall  have  been  made,  then  by  the  presiding  officer 
at  the  meeting.  If  for  any  reason  any  of  the  inspectors  previously  appointed  shall 
fail  to  attend  or  refuse  or  be  unable  to  serve,  inspectors  in  place  of  any  so  failing 
to  attend  or  refusing  or  unable  to  attend,  shall  be  appointed  in  like  manner. 

Article  II.    Board  of  Directors. 


Directors. 


Section  1.  Number,  Classification,  and  Term  of  Office.  The  business  and  the 
property  of  the  Company  shall  be  managed  and  controlled  by  the 
Board  of  Directors. 

As  provided  in  the  certificate  of  incorporation,  the  directors  shall  be  classified  in 

respect  of  the  time  for  which  they  shall  severally  hold  office,  by  dividing  them  into 

three  classes,  each  class  consisting  of  one-third  of  the  whole  Dumber 

Classification.  ()f  lh(.  B();u.d  of  jjjrectors-     Thc  directors  of  the  first  class  shall   be 

elected  for  a  term  of  one  year;  the  directors  of  the  second  class  shall  be  elected  for 
a  term  of  two  years,  and  the  directors  of  the  third  class  shall  be  elected  for  a  term 

of  three  years.  At  each  annual  election,  the  successors  to  the  directors 
eachdass  °^  'ne  c     8  W'",M'  'l'1'"1  s'i;i"  expire  in  that  year,  shall  be  elected  to 

hold  office  for  the  term  ol  three  years,  so  that  the  term  of  office,  of  one 
class  of  directors  shall  expire  in  each  year. 

829 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

The  number  of  directors  shall  be  twenty-four ;  but  the  number  of  directors  may 
be  altered  from  time  to  time  by  the  alteration  of  these  by-laws. 
dumber  of  ju  case  0f  aUy  increase  of  the  number  of  directors,  the  additional 

directors  shall  be  elected  by  the  directors  then  in  office  ;  one-third  of 
such  additional  directors  for  the  unexpired  portion  of  the  term  of  one  year ;  one- 
third  for  the  unexpired  portion  of  the  term  of  two  years,  and  one-third  for  the 
unexpired  portion  of  the  term  of  three  years,  so  that  each  class  of  directors  shall  be 
increased  equally. 

Every  director  shall  be  a  holder  of  at  least  one  share  of  the  capital  stock  of 
tors  ^he  Company.     Each  director  shall  serve  for  the  term  for  which  he 

must  be  shall  have  been  elected,  and  until  his  successor  shall  have  been  duly 

Stockholders,    chosen. 

At  all  elections  of  the  directors,  the  polls  shall  remain  open  for  at  least  one  hour, 
Polls  open  unless  every  registered  owner  of  shares  has  sooner  voted  in  person 
one  hour.  or  by  proxy,  or  in  writing  has  waived  the  statutory  provision. 

Section  2.     Vacancies.     In  case  of  any  vacancy  in  the  directors  of  any  class 
through  death,  resignation,  disqualification  or  other  cause,  the  remain- 
Vacancies         ing  directors,  by  affirmative  vote  of  a  majority  thereof,  may  elect  a 
successor  to  hold  office  for  the  unexpired  portion  of  the  term  of  the 
director  whose  place  shall  be  vacant,  and  until  the  election  of  his  successor. 

Such  vacancy  shall  be  filled  upon  and  after  nominations  therefor  shall  have  been 
made  by  the  Einance  Committee. 

Section  3.     Place  of  Meeting,  etc.     The  directors  may  hold  their  meetings,  and 

may  have  an  office  and  keep  the  books  of  the  Company  (except  as  other- 

Meetine  w*se  m^  ^e  Provided  f°r  Dv  ^aw)  m  suca  place  or  places  in  the 

State  of  New  Jersey  or  outside  of  the  State  of  New  Jersey,  as  the 

Board  from  time  to  time  may  determine. 

Section  4s.  Regular  Meetings.  Regular  meetings  of  the  Board  of  Directors 
Reeular  sna^  ^e  ue^  moutWv  on  the  last  Tuesday  of  each  month,  if  not  a  legaL 

Monthly  holiday,  and  if  a  legal  holiday,  then  on  the  next  succeeding  Tuesday 

Meetings.         not  a  le^al  holiday.     No  notice  shall  be  required  for  any  such  regular 
monthly  meeting  of  the  Board. 

Section  5.     Special  Meetings.     Special  meetings  of  the  Board  of  Directors 
shall  be  held  whenever  called  by  direction  of  the  chairman  of  the 
M^ti^es  Board,  or  the    chairman   of  the  Einance  Committee,  or   the   presi- 

dent, or  of  one-third  of  the  directors  for  the  time  being  in  office. 
The  secretary  shall  give  notice  of  each  special  meeting  by  mailing  the  same  at 
least  two  days  before  the  meeting,  or  by  telegraphing  the  same  at  least  one  day 
before  the  meeting,  to  each  director ;  but  such  notice  may  be  waived 
Rehired  ^y  any  director.     Unless  otherwise  indicated  in  the  notice  thereof, 

any  and  all  business  may  be  transacted  at  a  special  meeting.  At  any 
meeting  at  which  every  director  shall  be  present,  even  though  without  any  notice, 
any  business  may  be  transacted. 

Section  6.     Quorum.     Ten  directors  shall  constitute  a  quorum  for  the  trans- 
action of  business  ;  but  if  at  any  meeting  of  the  Board  there  be  less  than 
Quorum.  a  quorum  present,  a  majority  of  those  present  may  adjourn  the  meet- 

ing from  time  to  time. 

The  affirmative  vote  of  at  least  one-third  of  all  the  directors  for  the  time  being 
in  office  shall  be  necessary  for  the  passage  of  any  resolution. 

Section  8.  Order  of  Business.  At  meetings  of  the  Board  of  Directors,  busi- 
Order  of  ness  shall  be  transacted  in  such  order  as,  from  time  to  time,  the  Board 

Business.  may  determine  by  resolution. 

At  all  meetings  of  the  Board  of  Directors,  the  chairman  of  the  Board,  or  in  his 
Presiding  absence  the  chairman  of  the  Finance  Committee,  or,  in  the  absence  of 
Officer.  both  of  these  officers,  the  president,  shall  preside. 

Section  9.     Contracts.     Inasmuch  as  the  directors  of  this  Company  are  men 
of  large  and  diversified  business  interests,  and  are  likely  to  be  connected  with  other 
corporations  with  which  from  time  to  time  this  Company  must  have 
Contracts.         business  dealings,  no  contract  or  other  transaction  between  this  Com- 
pany and  any  other  corporation  shall  be  affected  by  the  fact  that  directors  of  this 
830 


FORMS    AND    PRECEDENTS. 

Company  arc  interested  in,  or  are  directors  or  officers  of,  such  other  corporation,  if, 
at  the  meeting  of  the  Board,  or  of  the  committee  of  this  Company,  making,  author- 
izing,  or  confirming  such  contract  or  transaction,  there  shall  be  present 
o/at  least  tin  a  quorum  of  directors  not  so  interested  ;  and  any  director  individually 
disinterested  may  be  a  party  to,  or  may  be  interested  in,  any  contract  or  transaction 
Directors.  Qj-  y^  Company,  provided  that  such  contract  or  transaction  shall 
he  approved  or  be  ratified  by  the  affirmative  vote  of  at  least  ten  directors  not 
so  interested. 

The  Board  of  Directors  in  its  discretion  may  submit  any  contract  or  act  for 
approval  or  ratification  at  any  annual  meeting  of  the  stockholders,  or  at  any  meet- 
ing  of  the  stockholders  called  for  the  purpose  of  considering  any  such 
Stockholders  act  or  contract ;  and  any  contract  or  act  that  shall  be  approved  or  be 
of  Acts  or  ratified  by  the  vote  of  the  holders  of  a  majority  of  the  capital  stock  of 
Contracts.  ^ie  Company  which  is  represented  in  person  or  by  proxy  at  such 
meeting  (provided  that  a  lawful  quorum  of  stockholders  be  there  represented  in  per- 
son or  by  proxy)  shall  be  as  valid  and  as  binding  upon  the  corporation  and  upon  all 
the  stockholders  as  though  it  had  been  approved  or  ratified  oy  every  stockholder 
of  the  corporation. 

Section  10.  Compensation  of  Directors.  For  his  attendance  at  any  meeting  of 
Compensation  the  Board  of  Directors,  or  of  any  committee,  every  director  shall  re- 
of  Directors,     ceive  an  allowance  of  twenty  dollars  for  attendance  at  each  meeting. 

Section  11.  Election  of  Officers  and  Committees.  At  the  first  regular  meeting 
of  the  Board  of  Directors  in  each  year  (at  which  a  quorum  shall  be  present)  held 
Election  of  nex*  a^er  tue  annua^  meeting,  the  Board  of  Directors  shall  proceed  to 
Officers  and  the  election  of  the  executive  officers  o£  the  Company,  and  of  the 
Committees.  Finance  Committee  to  be  elected  by  the  Board  of  Directors  under 
the  provisions  of  Article  III.  and  Article  IV.  of  the  By-Laws. 


Article  III.     Finance  Committee. 

Section  1.     The  Board  of  Directors  shall  elect  from  the  directors  a  Finance 

Committee,  and  shall  designate  for  such  committee  a  chairman,  who 

Committee        SDa^  continue  to  be  chairman  of  the  committee  during  the  pleasure  of 

the  Board  of  Directors. 

The  Board  of  Directors  shall  fill  vacancies  in  the  Finance  Committee  by  election 

from  the  directors  ;  and  at  all  times  it  shall  be  the  duty  of  the  Board 

haCafmd'        °^  Directors  to  keep  the  membership  of  such  committee  full,  with  due 

W      e  '       regard  to  the  qualifications  for  such  membership  indicated  in   this 

Article  of  the  By-Laws. 

All  action  by  the  Finance  Committee  shall  be  reported  to  the  Board  of  Direc- 
tors at  its  meeting  next  succeeding  such  action,  and  shall  be  subject 
Committee        to  revision  or  alteration  by  the  Board  of  Directors  ;   provided  that 
to  be  reported   no    rights   or  acts   of  third   parties   shall   be   affected   by  any   such 
to  Board.  revision  or  alteration. 

The  Finance  Committee  shall  fix  its  own  rules  of  proceeding,  and  shall  meet 
where  and  as  provided  by  sucli  rules,  or  by  resolution  of  the  Board  of 
Rules  of  Directors,  but  in  every  case  the  presence  of  at  least  four  members 

shall  be  necessary  to  constitute  a  quorum. 
In  every  case  the  affirmative  vote  of  a  majority  of  all  of  the  members  of  I  lie  com- 
mittee present  at  the  meeting  shall  be  necessary  to  its  adoption  of  any  resolution. 
Section  2.     The  Finance  Committee  shall  consist  of  seven  members,  besides 

the  chairman  of  the    Board  and  the  president,  each  of  wh ,  by  virtue  of  his 

office,  shall  be  a  member  of  the  Finance  Committee.  So  far  as 
Membership,  ppaeticable  each  of  the  seven  elected  members  of  the  Finance  Com- 
mittee shall  be  a  person  of  experience  in  matters  of  finance.  Unless  otherwise 
ordered  by  the  Board  of  Directors,  each  elected  member  of  the  Finance  Committee 
shall  continue  to  be  a  member  thereof  until  the  expiration  of  his  term  of  office  as  a 
director. 

831 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

The  Finance  Committee  shall  have  special  charge  and  control  of  all  financial 
affairs  of  the  Company.    The  general  counsel,  the  treasurer,  the  comp- 
Powers  and      trailer,  and  the  secretary,  and  their  respective  offices,  shall  be  under 
Duties.  tjie  ^jrect  control  and  supervision  of  the  Finance  Committee. 

During  the  intervals  between  the  meetings  of  the  Board  of  Directors,  the 
Finance  Committee  shall  possess,  and  may  exercise,  all  the  powers  of  the  Board  of 
Directors  in  the  management  of  all  the  affairs  of  the  Company,  including  its  pur- 
chases of  property,  and  the  execution  of  legal  instruments  with  or  without  the  cor- 
porate seal,  in  such  manner  as  said  committee  shall  deem  to  be  best  for  the  interests 
of  the  Company,  in  all  cases  in  which  specific  directions  shall  not  have  been  given 
by  the  Board  of  Directors. 

During  the  intervals  between  the  meetings  of  the  Finance  Committee,  and  sub- 
ject to  its  review,  the  chairman  of  the  Board  and  the  chairman  of  the 
Chairman         Finance  Committee  together,  shall  possess  and  may  exercise  any  of 
cnairman.        ^e  p0wers  0f  tQe  committee,  except  as  from  time  to  time  shall  be 
otherwise  provided  by  resolution  of  the  Board  of  Directors. 

Except  as  otherwise  provided  by  the  By-Laws,  or  by  resolution  of  the  Board  of 
Salaries  fixed  Directors,  all  salaries  and  compensations  paid  or  payable  by  the  Corn- 
by  Finance       pany  shall  be  fixed  by  the  Finance  Committee. 

Committee.  j^0  director  not  an  executive  officer  shall  become  a  salaried  em- 

ployee of  the  Company  except  by  special  vote  of  the  Finance  Committee. 

Article  IV.     Advisory  Committee. 

The  Board  of  Directors  shall  elect  from  the  directors  an  Advisory  Committee. 
The  committee  shall  consist  of  three  members,  besides  the  president  of  the  corpo- 
ration, who  by  virtue  of  bis  office  shall  be  a  member  and  chairman  of 
Advisory  tne  committee.    This  committee,  from  time  to  time,  shall  consider  and 

Committee.  ^^  recommendations  concerning  such  questions  relating  to  manu- 
facturing, transportation,  or  operation  as  may  be  submitted  to  the  committee  by  the 
president. 

Article  V.     Officers. 

Section  i.     Officers.    The  executive  officers  of  the  Company  shall  be  a  chair- 
Officers  man  "of  the   Board   of  Directors,  a  president,  a  vice-president,    or 
more  than  one  vice-president,  a  general  counsel,  a  treasurer,  a  secre- 
Xlties'              tary,  and  a  comptroller,  all  of  whom  shall  be  elected  by  the  Board 
of  Directors. 

The  Board  of  Directors  may  appoint  such  other  officers  as  they  shall  deem 

necessary,  who  shall  have  such  authority  and  shall  perform  such  duties 

Other  Officers.  &g  from  time  to  time  may  Re  prescribed  by  the  Board  of  Directors. 

One  person  may  hold  more  than  one  office. 

In  its  discretion,  the  Board  of  Directors  by  the  vote  of  a  majority  thereof  may 
leave  unfilled  for  any  such  period  as  it  may  fix  by  resolution,  any  office  except  those 
of  president,  treasurer,  secretary,  and  comptroller. 

Section  2.     All  officers  and  agents  shall  be  subject  to  removal  at  any  time  by 

the  affirmative  vote  of  a  majority  of  the  whole  Board  of  Directors.     All  officers, 

agents,  and  employees,  other  than  officers  appointed  by  the  Board  of 

Term  of  Office.  DirectorSj  suau  hold  office  at  the  discretion  of  the  committee  or  of  the 

officer  appointing  them. 

Each  of  the  salaried  officers  of  the  corporation  shall  devote  his  entire  time,  skill, 
and  energy  to  the  business  of  the  corporation,  unless  the  contrary  is  expressly  con- 
sented to  bv  the  Board  of  Directors  or  the  Finance  Committee.  No  vacations  shall 
be  taken  by  any  of  such  officers,  except  by  consent  of  the  Board  of  Directors  or  the 
Finance  Committee. 

The  Finance  Committee  shall  have  power  to  remove  all  officers,  agents,  and 
employees  of  the  Company,  except  officers  elected  or  appointed  by  the 
Removal.  Bo&rd  of  Directors. 

832 


FORMS   AXD    PRECEDENTS. 

Section  3.    Towers  and  Duties  of  the  Chairman  of  the  Board.     The  chairman 
of  the  Board  of  Directors  shall  preside  at  all  meetings  of  the  stockholders  and  of 
ir  the  Board  of  Directors;  and  by  virtue  of  his  office  shall  be  a  member 

Powlrsluid  of  the  Finance  Committee.  He  shall  have  supervision  of  such  mat- 
Duties,  ters  as  may  be  designated  to  him  by  the  Board  of  Directors  or  the 
Finance  Committee. 

SECTION  i.  Powers  and  Duties  of  the  President.  In  the  absence  of  the  chair- 
man of  the  Board  and  the  chairman  of  the  Finance  Committee,  the  president  shall 
President  preside    at    all  meetings  of   the  stockholders   and   of   the    Beard    of 

Powers  and  Directors.  By  virtue  of  his  office  he  shall  be  a  member  of  tin' 
Duties.  Finance  Committee.      Subject  to  the  Board    of   Directors   and   the 

Finance  Committee,  he  shall  have  general  charge  of  the  business  of  the  corporation 
relating  to  manufacturing,  mining,  and  transportation  and  general  operation.  Be 
shall  keep  the  Board  of  "Directors  and  the  Finance  Committee  fully  informed,  and 
shall  freely  consult  them  concerning  the  business  of  the  corporation  in  his  charge. 
He  may  sign  and  execute  all  authorized  bonds,  contracts,  checks,  or  other  obliga- 
tions in'  the  name  of  the  corporation,  and  with  the  treasurer  or  an  assistant  treasurer 
may  sign  all  certificates  of  the  shares  in  the  capital  stock  of  the  corporation.  He 
shall  do  and  perform  such  other  duties  as  from  time  to  time  may  be  assigned  to  him 
bv  t  he  Board  of  Directors. 

Section  5.     Vice-Presidents.      The  Board  of  Directors    may  appoint  a  vice- 
president  or   more    than    one    vice-president.      Each    vice-president 
Presidents        sna^  *iave  SU(m  Powers>  an(l  s^au  perform  such  duties,  as  may  be 
assigned  to  him  by  the  Board  of  Directors. 

Section  6.     The  General  Counsel.     The  General   Counsel  shall  be  the  chief 
consulting  officer  of  the  Company  in  all  legal  matters,  and,  subject  to 
General  t(je  Board  of  Directors  and  the  Finance  Committee,  shall  have  general 

Counsel.  control  of  all  matters  of  legal  import  concerning  the  Company. 

SECTION  7.  Powers  and  Duties  of  Treasurer.  The  treasurer  shall  have  cus- 
tody of  all  the  funds  and  securities  of  the  Company  which  may  have  come  into 
Treasurer  llis  uall(is  >  wlieu  uecessaiT  or  proper  he  shall  endorse  on  behalf  of 
Powers  and  the  Company,  tor  collection,  checks,  notes,  and  .other  obligations, 
Duties.  ailj  snaH  deposit  the  same  to   the  credit  of  the  Company   in  such 

bank  or  banks  or  depositary  as  the  Board  of  Directors  or  the  Finance  Com- 
mittee may  designate  ;  he  shall  sign  all  receipts  and  vouchers  for  payments  made 
to  the  Company  ;  jointly  with  such  other  officer  as  may  be  designated  by  the 
Finance  Committee,  he  shall  sign  all  checks  made  by  the  Company,  and  shall  pay 
out  and  dispose  of  the  same  under  the  direction  of  the  Board  or  of  the,  Finance 
Committee;  he  shall  sign  with  the  President,  or  such  other  person  or  persons  as 
may  be  designated  for  the  purpose  by  the  Board  of  Directors  or  the  Finance 
Committee,  all  bills  of  exchange  and  promissory  notes  of  the  Company  ;  he  may 
sign,  with  the  president  or  a  vice-president,  all  certificates  of  shares  in  the  capital 
stock;  whenever  required  by  the  Board  of  Directors  or  by  the  Finance  Committee, 
he  shall  render  a  statement  of  his  cash  account;  he  shall  enter  regularly,  in  books 
of  the  Company  to  be  kept  by  him  for  the  purpose,  full  and  accurate  account  of  all 
moneys  received  and  paid  by  him  on  account  of  the  Company  ;  he  shall,  at  all 
reasonable  times,  exhibit  his  books  and  accounts  to  any  director  of  the  Company 
upon  application  at  the  office  of  the  Company  during  business  hours;  and  he  shall 
perform  all  acts  incident  to  the  position  of  treasurer,  subject  to  the  control  of  the 
Board  of  Directors  or  of  the  Finance  Committee. 

He  shall  give  a  bond  for  the  faithful  discharge  of  his  duties  in  such  sum  as  the 
Board  of  Directors  or  the  Finance  Committee  may  require. 

Section  8.     Assistant  Treasurers.     The  Board  of  Directors   or   the    Finance 

Committee  mav  appoint  an  assistant  treasurer  or  more  than  one  assistant  treasurer. 

Bacn  assistant   treasurer  shall  have  such   powers  and   shall   perform 

Assistant  sll,.|,  duties  as  may  be  assigned  to  him  In  the  Board  of  Directors,  or 

Treasurers.        ,        .     „.  , ,  •       ■..      ° 

by  the  r  inance  I  lommittee. 

Section  9.    Powers  and  billies  of  Secretary.    The  secretary  shall  keep  the 
aninutes  of  all  meetings  of  tie'  B  lard  of   Directors,  and  tin-  minutes  of  all  mi  i 

833 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

Secretary.  °f  the  stockholders,  and  also  (unless  otherwise  directed  by  the  Finance 
Powers  and  Committee)  the  minutes  of  all  committees,  in  books  provided  for  that 
Duties.  purpose ;  he  shall  attend  to  the  giving  and  serving  of  all  notices  of 

the  Company  ;  he  may  sign  with  the  president,  in  the  name  of  the  company,  all 
contracts  authorized  by  the  Board  of  Directors  or  by  the  Finance  Committee,  and, 
when  so  ordered  by  the  Board  of  Directors  or  the  Finance  Committee,  he  shall 
affix  the  seal  of  the  Company  thereto  ;  he  shall  have  charge  of  the  certificate  books, 
transfer  books,  and  stock  ledgers,  and  such  other  books  and  papers  as  the  Board  of 
Directors  or  the  Finance  Committee  may  direct,  all  of  which  shall,  at  all  reasonable 
times,  be  open  to  the  examination  of  any  director,  upon  application  at  the  office  of 
the  Company  during  business  hours;  and  he  shall  in  general  perform  all  the  duties 
incident  to  the  office  of  secretary,  subject  to  the  control  of  the  Board  of  Directors 
and  of  the  Finance  Committee.  The  offices  of  secretary  and  of  treasurer  may  be 
held  by  one  and  the  same  person. 

Section  10.  Assistant  Secretaries.  The  Board  of  Directors  or  the  Finance 
Committee  may  appoint  one  assistant  secretary  or  more  than  one  assistant  secre- 
tary. Each  assistant  secretary  shall  have  such  powers  and  shall 
Secretaries.  perform  such  duties  as  may  be  assigned  to  him  by  the  Board  of 
Directors  or  by  the  Finance  Committee. 

Section  11.     Comptroller.     The  comptroller  shall  be  the   principal  officer  in 

charge  of  the  accounts  of  the  Company,  and  shall  perform  such  duties  as  from  time 

._  „         to  time  may  be  assigned  to  him  by  the  Board  of  Directors  or  the 

Comptroller.     v-  n  » •++ 

Jtmance  (,/omrnittee. 

Section  12.     Voting  upon  Stocks.     Unless  otherwise  ordered  by  the  Board  of 

Directors  or  by  the  Finance  Committee,  the  chairman  of  the  Board  or  the  chairman 

Votine  uDon      °^  *ue  ^iuauce  Committee  shall  have  full  power  and  authority  in  be- 

Stocks  Owned   half  of  the  Company  to  attend  and  to  act  and  to  vote  at  any  meetings 

in  other  0f  stockholders  of  any  corporation  in  which  the  Company  may  hold 

ompanies.       stock,  and  at  any  such  meeting  shall  possess  and  may  exercise  any 

aud  all  the  rights  and  powers  incident  to  the  ownership  of  such  stock,  and  which, 

as  the  owner  thereof,  the  Company  might  have  possessed  and  exercised  if  present. 

The  Board  of  Directors  or  the  Finance  Committee,  by  resolution,  from  time  to 

time,  may  confer  like  powers  upon  any  other  person  or  persons. 

Article  VI.     Capital  Stock  —  Seal. 

Section  1.     Certificates  of  Shares.     The  certificates  for  shares  of  the  capital 
stock  of  the  Company  shall  be  in  such  form,  not  inconsistent  with  the  certificate  of 
incorporation,  as  shall  be  prepared  or  be  approved  by  the  Board  of 
CertiLri    tes      Directors.     The  certificates  shall  be  signed  by  the  president  or  a  vice- 
president,  and  also  by  the  treasurer  or  an  assistant  treasurer. 
All  certificates  shall  be  consecutively  numbered.     The  name  of  the  person  own- 
ing the  shares  represented  thereby,  with  the  number  of  such  shares  and  the  date 
of  issue,  shall  be  entered  on  the  Company's  books. 

No  certificate  shall  be  valid  unless  it  is  signed  by  the  president  or  a  vice-presi- 
dent, and  by  the  treasurer  or  an  assistant  treasurer. 

All  certificates  surrendered  to  the  Company  shall  be  cancelled,  and  no  new  cer- 
tificate shall  be  issued  until  the  former  certificate  for  the  same  number  of  shares  of 
the  same  class  shall  have  been  surrendered  and  cancelled. 

Section  2.     Tra?isfer  of  Shares.     Shares  in  the  capital  stock  of  the  Company 

shall  be  transferred  only  on  the  books  of  the  Company  by  the  holder 

Snares61  °f       thereof  in  person,  or  by  his  attorney,  upon  surrender  and  cancellation 

of  certificates  for  a  like  number  of  shares. 

Section  3.     Regulations.     The  Board  of  Directors,  and  the  Finance  Committee 

also,  shall  have  power  and  authority  to  make  all  such  rules  and  regulations  as 

Regulations      respectively  they  may  deem  expedient  concerning  the  issue,  transfer, 

and  registration  of  certificates  for  shares  of  the  capital  stock  of  the 

Company. 

The  Board  of  Directors  or  the  Finance  Committee  may  appoint  a  transfer 

834: 


FORMS  AND   PRECEDENTS. 

Transfer  agent  and  a  registrar  of  transfers,  and  may  require  all  stock  certifi- 

Agent.  cates  to  bear  the  signature  of  such  transfer  agent  and  of  such  registrar 

Registrar.         of  transfers. 

Section  4.  Closing  of  Transfer  Books.  The  stock  transfer  books  shall  be 
closed  for  the  meetings  of  the  stockholders,  and  for  the  payment  of  dividends, 
Closing  of  during  such  periods  as  from  time  to  time  may  be  fixed  bj  the  Board 
Transfer  of  Directors  or  by  the  Finance  Committee,  and  during  such  periods 

Books.  n0  stock  shall  be  transferable. 

Section  5.     Dividends.     The  Board  of  Directors  may  declare  dividends  from 
the  surplus  or  from  the  net  profits  of  the  Company. 
Dividends.  r^g  dates  for  the   declaration  of  dividends   upon  the   preferred 

stock  and  upon  the  common  stock  of  the  Company  shall  be  the  days  by  these  By- 
Laws  fixed  for  the  regular  monthly  meetings  of  the  Board  of  Directors  in  the 
months  of  April,  July,  October,  and  January  in  each  year,  on  which 
Dates  for  ^ays  the  Board  of  Directors  in  its  discretion  shall  declare  what,  if 

Dec  ara  on.  ^^  dividends  shall  be  declared  upon  the  preferred  stock  and  tiie 
common  stock,  or  either  of  such  stocks. 

The  dividends  upon  the  preferred  stock,  if  declared,  severally  and  respectively 
Preferred ;  shall  be  payable  quarterly  upon  the  thirtieth  day  of  May,  of  August, 
when  payable.  0f  November,  and  the  last  day  of  February  in  each  year. 

The  dividends  upon  the  common  stock,  if  declared,  severally  and  respectively, 
Common ;  shall  be  payable  quarterly  on  the  thirtieth  day  of  June,  of  September, 
when  payable.  0f  December,  and  of  March  in  each  year. 

If  the  date  herein  appointed  for  the  payment  of  any  dividend  shall  in  any  year 
fall  upon  a  legal  holiday,  then  the  dividend  payable  on  such  date  shall  be  paid  on 
the  nest  day  not  a  legal  holiday. 

Section  6.     Working  Capital.     The  directors  shall  not  be  required  in  January 
in  each  year,  after  reserving  over  and  above  its  capital  stock  paid  in,  as  a  working 
capital  for  said  corporation,  such  sum,  if  any,  as  shall  have  been  fixed 
Working  by  the  stockholders,  to  declare  a  dividend  among  its  stockholders  of 

Capital.  tj-)e  wn0|e  of  jts  accumulated  profits  exceeding  the  amount  so  reserved, 

and  pay  the  same  to  such  stockholders  on  demand ;  but  the  Board  of  Directors  may 
fix  a  sum  which  may  be  set  aside  or  reserved,  over  and  above  the  Company's 
capital  paid  in,  as  a  working  capital  for  the  Company,  and  from  time  to  time  they 
may  increase,  diminish,  and  vary  the  same  in  their  absolute  judgment  and  discretion. 

Section  7-     Corporate  Seal.     The  Board  of  Directors  shall  provide  a  suitable 

seal,  containing  the  name  of  the   Company,  which  seal   shall  be   in 

Corporate         charge  of  the  secretary.     If  and  when  so  directed  by  the  Board  of 

Directors  or  by  the  Finance  Committee,  a  duplicate  of  the  seal  may 

be  kept  and  be  used  by  the  treasurer  or  by  any  assistant  secretary  or  assistant 

treasurer. 

Article  VII.    Amendments. 

Section  1.     The  Board  of  Directors  shall  have  power  to  make,  amend,  and 

repeal  the  by-laws  of  the  Company,  by  vote  of  a  majority  of  all  of  the  directors,  at 

any  regular  or  special  meeting  of  the  Board,  provided  that  notice  of 

en  en  s.  mtentjon  to  make,  amend,  or  repeal  the  by-laws  in  whole  or  in  part, 
shall  have  been  given  at  the  next  preceding  meeting ;  or  without  any  such  notice, 
by  a  vote  of  two-thirds  of  all  the  directors. 

SUBSCRIPTION  AGREEMENT. 

Whereas,  a  Corporation  is  to  be  organized  under  the  laws  of  the  State  of 
,  to  be  called  the  Company,  for  the  purpose  among  oilier 

things  of  acquiring  title  to  the  following  mining  properties,  more  particularly  de- 
scribed as  follows,  to  wit:   (here  insert  description);  and 

Whereas,  the  capital  stock  of  said  Company  is  to  be  divided  into 
shares  of  the    par   value   of  dollars  per  share,   all  of  said  stock   to   be 

835 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

issued  to  one  in  payment  for  said  mining  properties ;  Now,  in  considera- 

tion of  the  transfer  to  us  of  the  several  number  of  shares  set  opposite  our  names  re- 
spectively hereinafter  subscribed,  we  do  hereby  covenant  and  agree  with  said  (here 
insert  name  of  party  from  whom  mines  are  to  be  purchased)  that  we  will  accept  and 
receive  said  stock  and  pay  for  the  same  at  the  rate  of  dollars  per  share. 

And  for  the  purpose  of  carrying  out  this  agreement  we  hereby  agree  to  pay  to 
and  as  trustees  for  us  on  demand  the  aforesaid  sums  of 

money  so  subscribed  by  us,  to  be  held  by  the  said  trustees  for  us,  and  paid  over  by 
him  to  the  said  (here  insert  names  of  party  from  whom  mines  were  purchased) 
upon  the  delivery  to  the  Company  of  a  government  patent  or  deed  for 

the  mines  and  mining  property  above  described,  and  the  receipt  from  said 
of  the  several  number  of  shares  of  stock  subscribed  by  us  respectively,  and  not 
otherwise. 


WAIVER  OF  NOTICE    OF  FIRST  MEETING  OF  INCORPORATORS. 

The  undersigned,  being  all  the  stockholders  and  incorporators  of  the 
Company,  a  Corporation  created  under  the  laws  of  the  State  of  ,  by  virtue 

of  a  charter  issued  by  the  Secretary  of  State  of  said  State,  bearing  date  the 
day  of  ,  190     ,  desiring  to  hold  a  meeting  for  the  purpose  of  organizing 

said  Corporation  immediately,  do  hereby  waive  notice  (and  publication  of  notice)  of 
said  first  meeting  of  stockholders  of  said  Corporation,  and  we  do  hereby  assent  and 
agree  to  hold  the  first  meeting  of  the  stockholders  of  said  Corporation  at 
on  the  day  of  ,  190     ,  at  o'clock  in  the  noon, 

for  the  purpose  of  adopting  by-laws  and  the  transaction  of  any  other  business  that 
may  legally  be  done  at  such  meeting  of  stockholders ;  and  we  do  further  agree  that 
any  business  transacted  at  such  meeting  shall  be  as  valid  and  legal,  and  of  the  same 
force  and  effect,  as  though  said  meeting  was  held  after  notice  given  and  published. 

Witness  our  signatures  and  seals. 


WAIVER  OF  NOTICE  OF  MEETING  OF  STOCKHOLDERS  FOR 
GENERAL  PURPOSES. 

The  undersigned,  being  all  the  stockholders  of  Company,  a  Corpora- 

tion created  and  organized  under  the  laws  of  the  State  of  ,  by  virtue  of 

a  charter  issued  by  the  Secretary  of  State  of  said  State,  bearing  date  on  the 
day  of  ,  hereby  assent  and  agree  that  a  meeting  of  the  stockholders  of 

said  Corporation  shall  be  held  at  ,  on  the  day  of 

190    ,  at  o'clock  in  the         noon,  for  the  purpose  of  and 

the  transaction  of  other  business.  We  do  hereby  waive  notice  and  the  publi- 
cation of  notice  of  such  meeting,  and  agree  that  any  business  transacted  at  such 
meeting  shall  be  as  valid  and  effective  as  though  held  after  notice  duly  given  and 
published. 

Witness  our  signatures  and  seals. 


FORM  OF  LETTER  ADDRESSED  TO  CORPORATION  OFFERING  TO 
TRANSFER  PROPERTY  IN  EXCHANGE  FOR  CAPITAL  STOCK 
OF  A  CORPORATION. 

To  the  Stockholders  of  the  Company : 

I  am  the  owner  in  fee  of  the  following  described  real  estate  (or,  in  case  of  personal 
property,  the  clause  should  read,  "the  owner  of  the  following  described  personal 
property"),  to  wit:  (here  insert  description  of  property). 

836 


FORMS   AND    PRECEDENTS. 

1  hereby  offer  to  transfer  to  you  the  property  above  described  within 
days  from  date  hereof,  in  consideration  of  the  assignment  to  me  within  the  said  period 
of   time,  of  shares  of  the  capital  stock  of  your  Company.     The  offer 

herein  contained  is  made  subject  to  acceptance  by  your  corporation  within 
days  from  the  date  hereof.     If  the  offer  is  not  accepted  within  said  time,  the  same 
shall  forthwith  become  null  and  void. 

Respectfully  Submitted. 

AGREEMENT  FOR  THE  SALE  OF  REAL  OR  PERSONAL  PROPERTY 
TO   A   CORPORATION  IN  EXCHANGE   FOR  ITS   CAPITAL  STOCK. 

This  agreement  made  this  day  of  ,  19')  .  by  and  between 

of  the  City  of  ,  County  of  ,  State  of  .  party 

of  the  first  part,  and  the  Company,  a  corporation  organized  and  existing 

under  and  by  virtue  of  the  laws  of  the  State  of  ,  party  of  the  second 

part. 

Witness,  For  and  in  consideration  of  the  sum  of  SI. 00  paid  by  each  of  said  parties 
of  the  first  and  second  parts  to  each,  the  receipt  whereof  is  hereby  acknowledged, 
and  in  further  consideration  of  the  mutual  covenants  and  agreements  herein  con- 
tained, it  is  hereby  agreed  by  and  between  the  said  parties  of  this  agreement  as 
follows : 

First.    The  said  party  of  the  first  part  hereby  agrees,  within  days  from 

the  date  of  this  agreement,  to  sell,  convey,  assign,  transfer,  and  deliver  to  the  said 
party  of  the  second  part  the  following  described  real  estate  (or  personal  property), 
to  wit : 

(Here  insert  description  of  the  property  to  be  sold,  conveyed,  transferred,  as- 
signed, and  delivered.) 

Second.  Said  party  of  the  first  part  hereby  warrants  that  it  is  the  owner  in  fee  of 
said  real  estate  above  described  (or,  in  case  of  personal  property,  that  it  is  the  owner 
of  the  personal  property  above  described)  all  of  which  is  hereby  warranted  to  be  free 
and  clear  from  all  liens,  charges,  incumbrances,  taxes,  and  assessments  whatsoever. 

Third.    The  said  party  of  the  second  part  hereby  agrees  that  forthwith,  upon  due 
conveyance  to  it  (in  case  of  personal  property  upon  the  due  transfer,  assignment, 
or  delivery)  of  said  real  estate  by  said  party  of  the  first  part,  it  will,  in  considera- 
tion therefor,  assign,  transfer,  and  deliver  to  said  party  of  the  first  part 
shares  of  the  common  stock  of  the  Company  (party  of  the  second  part 

hereto)  of  the  par  value  of  dollars  per   share,  aggregating  $  in 

amount. 

In  Witness  Whereof,  the  said  parties  of  the  first  and  second  parts  have  hereunto 
set  their  hands  and  seals  this  day  of  ,  190  . 

[seal] 
Co.  [seal.] 
By  ,  Fres. 

Attest :  Sec'y. 

State  of 
County  of 

On  this  day  of  ,  in  the  year  ,  before  me  personally  came 

,  to  me  known  and  known  to  me  to  be  the  individual  described  in, 
and  who  executed  the  foregoing  instrument,  and  who  acknowledged  to  me  that  lie 
executed  the  same. 

,  Notary  Public, 

Co. 
Stale  of 


h 


State  of 
County  of 

On  the  day  in  the  year  before  me  personally  came  ,  to 

me  known,  who  being  by  me  duly  sworn  did  depose,  and   say  that   he   resided  in 

;  that  lie  is  the  President  of  Company,  the  corporation 

described  in  and  which  executed  the  above  instrument;  thai  he  knew  the  seal  of  said 

837 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

corporation;  that  the  seal  affixed  to  said  instrument  was  such  corporate  seal; 
that  it  was  so  affixed  by  order  of  the  Board  of  Directors  of  said  corporation,  and 
that  he  signed  his  name  thereto  by  like  order. 

,  Notary  Public, 

County, 
State  of 


FORM   OF  TRUST  AGREEMENT. 

(This  agreement  will  be  found  very  convenient  where  it  is  desired  to  get  stock  back 
into  the  treasury  as  full-paid  and  non-assessable  stock,  subject  to  sale  below  par  if  desired.) 

Tins  Agreement,  entered  into  this  day  of  ,  190  ,  by  and 

between  of  the  City  of  ,  State  of  , 

party  of  the  first  part,  and  the  Company,  a  corporation  organized 

and  existing  under  the  laws  of  the  State  of  ,  party  of  the  second  part, 

witnesseth  as  follows : 

First.  That  in  consideration  of  the  mutual  covenants  and  agreements  herein 
contained,  said  party  of  the  first  part  does  hereby  assign,  transfer,  and  set  over 
unto  said  party  of  the  second  part  shares  of  the  capital  stock  of  the 

Company,  of  the  par  value  of  dollars  per  share   to  be 

held  by  said  party  of  the  second  part  in  trust,  and  to  be  disposed  of  under  the 
direction  of  the  Board  of  Directors  of  said  party  of  the  second  part  for  the  benefit 
of  the  stockholders  of  said  party  of  the  second  part  with  a  view  to  securing  the 
necessary  funds  with  which  to  carry  on  the  business  of  said 
Company,  and  to  provide  a  working  capital  therefor. 

Second.  The  said  party  of  the  second  part  hereby  accepts  the  assignment  and 
transfer  of  said  shares  of  the  capital  stock  of  said 

Company  to  be  held  by  and  disposed  of  by  it  for  the  purposes  above  stated. 

Third.  Said  party 'of  the  second  part  further  covenants  and  agrees  that  it  will 
at  all  times  hold  and'dispose  of,  at  such  prices  and  under  such  terms  and  conditions 
as  its  Board   of  Directors   may  prescribe,   said  shares   of  said   capital 

stock  of  said  Company,  with  a  view  to  securing  adequate  and  suf- 

ficient capital  with  which  to  carry  out  the  purposes  for  which  said 
Company  was  formed. 

In  Witness  Whereof,  said  parties  of  the  first  and  second  parts  have  hereunto  set 
their  hands  and  seals  this  day  of  ,  190  . 

,  Party  of  the  first  part. 

Company. 

By  ,  President, 

,  Party  of  the  second  part. 

State  of  ) 

County  of  > 

On  this  day  of  ,  190  ,  before  me  personally  came  , 

to  me  known  and  known  to  me  to  be  the  person  described  in  and  who  executed  the 
foregoing  instrument,  and  duly  acknowledged  to  me  that  he  executed  the  same. 

,  Notary  Public. 

County. 

State  of  \  sg 

County  of  \ 

On  this  day  of  ,  190     ,  before  me  personally  came   _  , 

who  being  by  me  duly  sworn  did.  depose  and  say :  that  he  resided  in  the  City  of 
;  that  he  was  the  President  of  the  Company,  the 

corporation  described  in  aud  which  executed  the  foregoing  instrument;  that  he 
knew  the  seal  of  said  corporation;  that  the  seal  affixed  to  such  instrument  was 
such  corporate  seal;  that  it  was  so  affixed  by  order  of  the  Board  of  Directors,  and 
that  he  signed  his  name  thereto  by  like  order. 

,  Notary  Public, 

County. 

838 


FORMS   AND   PRECEDENTS. 


CERTIFICATE   OF  INSPECTOR  OF  ELECTION. 

The  undersigned,  having  been  duly  appointed  Inspector  of  Election  of  directors 
of  the  Company,  pursuant  to  the  statute  in  such  case  made  and 

provided  at  the  annual  meeting  of  the  stockholders  of  said  corporation  held  for  that 
purpose  on  the  day  of  ,190   ,  at  the  office  of  the  company  in  the  City 

of  ,  do  hereby  certify  that  at  such  election  there  were'presenl  and  voting 

shares  of  the  stock  of  said  corporation  with  the  following  result,  to  wit  : 

The  said  persons  above  named  having  received  a  majority  of  all  the  votes  cast 
at  such  election  are  hereby  declared  by  us  to  have  been  elected  directors  by  a 
majority  of  the  whole  number  of  shares  outstanding  in  said  company. 


RESOLUTION  OF  DIRECTORS  AUTHORIZING  THE 
CONTRACTION   OF  A  SPECIFIC  DEBT. 

Whereas,  it  appears  to  this  board  that  dollars  are  necessary  with 

which  to  enable  the  company  to  meet  its  obligations  now  due  and  owing;  and 

Whereas,  there  is  no  money  in  the  treasury  of  the  company  at  the  present  time 
with  which  to  meet  said  obligations,  Now,  therefore, 

Be  it  resolved,  that  the  proper  officers  of  this  corporation  be  and  they  hereby 
are  authorized  to  contract  a  loan  for  this  company  to  the  amount  of 
dollars,  and  to  give  therefor  a  promissory  note  of  this  company  for  said  amount, 
same  to  bear  interest  at  the  rate  of  percent  per  annum  until  paid,  and  to 

become  due  months  after  date  thereof,  and  the  said  officers  are  hereby 

authorized  to  secure  payment  of  said  note  by  giving  a  mortgage  on  such  real  estate 
of  the  company  as  may  be  required  or  as  may  be  expedient. 

I,  ,  Secretary  of  the  Company,  a  corpo- 

ration organized  and  existing  under  the  laws  of  the  State  of  > 

do  hereby  certify  that  the  foregoing  is  a  true  and  correct  copy  of  the  resolution  ot 
the  Board  of  Directors  of  said  corporation,  duly  adopted  at  the  regular  meeting 
of  said  Board  of  Directors  held  at  the  office  of  said  company  on  the  day  of 

,  190  ,  and  that  the  same  is  entered  as  such  in  the  minute  book  of  said 
Board  of  Directors. 

Witness  my  hand  and  the  seal  of  said  corporation  the  day  of  ,  190  . 

,  Secretary. 

(seal.) 

COMBINED  FORM  OF  WAIVER  OF  NOTICE  AND  WAIVER  OF  PUB- 
LICATION OF  NOTICE  OF  SPECIAL  STOCKHOLDERS'  MEETING. 

The  undersigned,  being  all  of  the  stockholders  of  the  Company,  a  cor- 

poration created  and  organized  under  the  laws  of  the  State  of  by  virtue  of 

a  charter  issued  by  the  Secretary  of  State  of  said  State,  beariug  date  the 
day  of         ,  190  ,  hereby  assent  and  agree  that  a  special  meeting  ol  the  stockholders 
of  said  corporation  be  held  at  the  office  of  the  Company,  No.  Street,  in  the 

City  of  ,  State  of  ,  on  the  day  of  ,  190  ,  at 

o'clock  in  the  noon  therein,  for  the  purpose  of  (here  insert  nature  of  business 

to  be  transacted),  and  the  transaction  of  such  other  business  as  may  come  before 
the  meeting.  Wedo  hereby  waive  notice  and  publication  of  notice  ot  such  meet- 
ing, and  agree  that  any  business  transacted  at,  said  meeting  be  valid  in  effect  as 
though  held  after  notice  duly  given  and  published. 

Witness  our  signatures  and  seals  this  day  of  ,  190  . 

(Signatures.) 

s:;i) 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 


FORM   FOR  RESOLUTION  RELATIVE  TO   OPENING  DEPOSIT 
WITH  BANK. 

Resolved,  that  the  Bank  be  and  the  same  hereby  is  designated  as  a 

depository  of  the  funds  of  this  Company,  and  that  ,  the  Treasurer  of  said 

Company,  be  and  he  hereby  is  authorized  from  time  to  time  for  and  on  behalf  of 
this  Company  to  make  or  sign  checks,  drafts,  notes,  obligations,  agreements,  or 
other  instruments ;  to  endorse  checks,  drafts,  or  other  instruments ;  to  accept  drafts 
or  to  procure  loans,  discounts  or  re-discounts,  or  advances  ;  to  do  all  acts  inciden- 
tal to  any  of  the  above  matters  ;  and  to  pay,  adjust,  or  secure  any  transaction,  mat- 
ter, or  liability,  and  to  do  all  acts  therein,  to  pay  all  sums  due  or  to  become  due ;  to 
accept  and  receive  notices  and  demands,  and  generally  to  do  all  acts  and  things  with 
reference  to  any  transaction  in  the  name  of  or  on  behalf  of  this  Company  with  the- 
bank  of  the  City  of  ,  or  in  carrying  on  its  business  relations- 

therewith,  which  any  of  said  persons  may  see  fit ;  Providing,  however,  that  said 
Treasurer  shall  not  make  the  total  liabilities  created  by  him  hereunder  to  exceed 
at  one  time  the  sum  of  dollars. 

This  Resolution  is  to  continue  in  force  untU  formally  rescinded,  and  filing  of  due 
notice  thereof  with  said  Bank. 


FORM  FOR  RESOLUTION  DECLARING  A  DIVIDEND. 

Whereas,  there  is  now  in  the  Treasury  of  this  Company  surplus  profits  arising- 
from  the  carrying  on  of  the  business  of  the  Company  sufficient  to  justify  the  decla- 
ration of  a  dividend  of  per  cent  upon  all  stock  issued  ;  Now,  therefore,  be  it 

Resolved,  that  a  dividend  of  per  cent  on  the  stock  of  the  Company 

issued  and  outstanding  be  and  the  same  hereby  is  declared  out  of  the  surplus  earn- 
ings of  the  corporation  already  accrued  or  hereafter  to  accrue  up  to  and  including 
the  day  of  ,  190   ,  to  which  date  this  dividend  period  extends,, 

payable  on  the  day  of  to  the  stockholders  entitled  thereto  in 

proportion  to  their  respective  holdings  of  stock ;  and  be  it  further 

Resolved,  that  the  President  of  this  Company  be  directed  to  notify  stockholders 
of  record  of  the  declaration  of  such  dividend,  and  to  see  that  the  same  is  paid  when 
due  to  the  aforesaid  stockholders. 


FORM  FOR  POWER    OF  ATTORNEY,  RELATIVE  TO   ACTING  AS 
GENERAL  MANAGER  OF  A  CORPORATION. 

State  of  )  ss 

County  of  £ 

Know  all  Men  by  these  Presents :  That  the  Company,  a  corporation 

organized  and  existing  under  the  laws  of  the  State  of  ,  by  , 

its  president,  and  ,  its  secretary,  does  hereby  make,  constitute,  and  appoint 

of  the  City  of  ,  State  of  ,  its   true,  suffi- 

cient, and  lawful  attorney,  for  it  and  in  its  name,  place,  and  stead,  and  to  its  use,  to 
eonduct  and  carry  on  in  and  about  the  city  of  ,  State  of  ,  all 

and  singular  its  business  as  a  company,  and  in  connection  therewith  to 

purchase   and   acquire   all   material,  that   may   be   necessary   in   the 

promotion   or  extension  of  the  business  of  said  Company,  to  appoint 

superintendents,  agents,  clerks,  and  employees  of  all  grades,  and  to  fix  the  salaries 
of  the  same ;  to  enter  into  contracts  for  and  in  behalf  of  said  Company 

in  the  carrying  on  of  its  business  whenever  and  wherever  necessary ;  to  make  and 
execute,  sign,  seal,  and  deliver  for  it  and  in  its  name  all  bills,  notes,  deeds,  or  other 
instruments  in  writing  whatsoever  which  shall  be  necessary  for  the  proper  conduct 
of  its  said  business ;  to  secure  franchises,  rights,  and  privileges  from  the  Government 
840 


FOR-MS    AND    PRECEDENTS. 

of  and  municipalities  thereof  or  from  corporations,  linns,  unci  individ- 

uals residing  therein ;  to  discharge  at  his  discretion  all  or  any  subordinate  officers 
and  agents,  clerks  or  employees,  now  or  hereafter  in  the  employ  of  said 
Company,  and  to  do  anything  and  everything  that  may  be  necessary  forcouservimr. 
promoting,  or  extending  the  business  of  said  Company  as  carried  on 

in  the  said  State  of 

In  Witness  Whereof,  the  said  Company  lias  caused  these  presents  to 

be  signed  by  its  President,  and  its  corporate  seal  to  be  hereunto  affixed  and  attested 
by  its  Secretary,  this  day  of  ,  190  . 

Company. 
By  ,  President. 

Attest : 

,  Secretary. 

State  of  )  gs 

County  of  $ 

Before  me,  ,  a  Notary  Public  in  and  for  the  County  of  , 

State  of  ,  on  this  day  personally  appeared  ,  known  to  me 

to  be  the  person  whose  name  is  subscribed  to  the  foregoing  instrument,  and  known 
to  me  to  be  the  President  of  the  Company,  a  corporation,  and  ac- 

knowledged to  me  that  he  executed  said  instrument  for  the  purposes  therein 
expressed,  and  as  the  act  of  said  corporation. 

,  Notary  Public. 

GENERAL   POWER  OF   ATTORNEY   TO  ACT   AS  MANAGING 
AGENT  OF  CORPORATION. 

State  of  ) 

County  of  $ 

Know  all  Men  by  these  Presents  :  That  the  Company,  a  Corpo- 

ration organized  and  existing  under  the  laws  of  the  State  of  ,  by  , 

President,  and  ,  Secretary,  does  hereby  appoint  ,  of  the  city  of 

,  State  of  ,  its  true  and  lawful  attorney  for  it  and  in  its  name,  place, 

and  stead,  and  to  its  use,  to  act  for  and  in  behalf  of  the  said  Company  as  its 
managing  agent  in  ;  and  in  connection  therewith  : 

First.    To  represent  the  said  Company  in  any  and  every  capacity, 

and  to  conduct,  administer,  and  take  charge  therein  of  all  affairs,  business,  and 
interests  of  the  said  Company  of  any  and  every  kind,  to  attend  to  its  conserva- 
tion and  protection,  to  pay  the  charges  and  taxes  thereon,  to  lease  and  rent  the 
same  upon  such  terms  and  conditions  as  may  be  by  him  deemed  advantageous  for 
the  Company;  to  recover  and  collect  the  rents  therefor,  dispossess  and  remove 
the  lessees,  and  take  such  other  steps  as  may  be  appropriate  to  a  careful  administra- 
tion of  the  affairs  of  said  Company. 

Third.  To  render  accounts  to  whomsoever  they  may  be  due,  and  to  exact  the 
same  from  whomsoever  ought  to  render  them,  to  make  the  settlement  of  all  claims 
and  accounts  and  approve  and  disapprove  them,  to  ti.x  balances,  to  ask  and  to  give 
compositions,  and  to  give  and  receive  guarantees. 

Fourth.  To  sue  for,  recover,  and  collect  such  accounts  as  may  be  due  at  present 
from  or  in  the  future  that  may  be  owing  to  the  said  Company,  by  whatso- 

ever persons  or  corporations. 

Fifth.  To  take  possession,  and  to  give  and  take  in  pledge,  all  the  properties 
which  the   said  Company  may  have  or  shall  acquire  in  the   future,  or  to 

which  the  said  Company  may  have  or  shall  acquire  rights  in. 

Sixth.  To  issue,  accept,  indorse,  transfer,  and  negotiate  letters  of  exchange, 
checks,  promissory  notes,  due  bills,  drafts,  and  any  other  instruments,  negotiable  or 
not,  negotiable,  and  to  satisfy  or  collect  such  instruments,  to  lix  a  general  limited 
value  upon  bills  of  exchange,  promissory  notes,  or  oi  her  negot  table  or  uon-negot iuble 
instruments  in  the  manner  which  may  be  convenient. 

Seventh.   To  compromise  all  the  rights  and  actions  of  the  said  Com- 

pany,   judicially  or  extra-judicially,    submitting   them,   if  deemed   advisable,    to   the 

decision  of  arbitrators  and  third  parties  in  case  of  disagreement! 

Sll 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

Eighth.  To  sell,  lease,  pledge,  mortgage,  or  give  in  payment  all  the  property 
both  real  and  personal  whicli  at  the  present  the  said  Company  may  pos- 

sess, or  in  the  future  may  possess,  upon  such  terms  and  conditions  as  the  said 
managing  agent  may  deem  convenient  and  proper,  and  which  the  said  managing 
agent  may  decide  to  be  proper. 

Ninth.  To  put  real  or  personal  property  at  such  prices,  and  in  such  amounts, 
and  upon  such  terms  as  may  seem  convenient  and  proper. 

Tenth.   To  deposit  the  moneys  and  things  of  value  of  the  said  Com- 

pany in  banks  or  in  other  places  of  deposit,  and  to  withdraw  the  same  at  will. 

Eleventh.  To  pay  all  the  charges  and  taxes  which  may  affect  any  of  the  property 
of  the  said  Company,  and  to  interpose  protests  against  such  charges 

and  taxes. 

Twelfth.  To  furnish  and  execute  bonds  and  other  securities  whenever  the 
same  may  be  convenient,  either  in  the  management  of  the  business  and  affairs  of  the 
said  Company,  or  in  any  case  in  which  such  bonds  or  securities  may  be 

necessary  or  convenient  in  the  conduct  of  legal  proceedings  before  any  of  the  courts 
of  administrative  authorities. 

Thirteenth.  To  form  and  sign  bills,  commercial  contracts,  bills  of  lading,  mani- 
fests, receipts,  and  whatsoever  other  documents  of  such  nature  may  be  required. 

Fourteenth.  To  satisfy  and  extend  mortgages  upon  both  real  and  personal 
property. 

Fifteenth.    To  solicit  concessions  or  franchises,  patents,  and  privileges. 

Sixteenth.  To  present  bids,  accompanied  by  descriptions,  specifications,  plans, 
and  other  requisites,  with  a  view  to  obtain  contracts  from  State,  municipalities,  and 
individuals. 

Seventeenth.  To  execute  all  documents,  public  and  private,  which  said  managing 
agent  may  deem  necessary  to  the  exercise  of  the  powers  hereby  granted. 

Eighteenth.    To  represent  the  said  Company  for  any  and  all  purposes 

in  all  courts  of  justice  wherever  located,  and  in  connection  therewith  to  retain 
counsel  in  prosecuting  or  defending  action  therein. 

Nineteenth.   To  represent  the  said  Company  in  any  and  every  registry 

and  public  office,  presenting  to  the  same  any  and  all  petitions,  documents,  writings, 
etc.,  for  filing  or  registry,  which  the  said  managing  agent  may  deem  convenient. 


FORM  FOR  CERTIFICATE  OF  AUTHORIZATION  TO  COUNTERSIGN 
CERTIFICATES   OF  STOCK. 

The Compact, 

,  Registrar. 

This  is  to  Certify,  That  at  a  meeting  of  the  Directors  of  the 
Company,  duly  convened  and  held  on  the  day  of  ,  190  ,  the  following 

resolutions  were  adopted : 

Resolved,  That  the  Company  be  and  is   hereby   appointed  the 

Registrar  of  the  shares  of  the  stock  of  this  Company. 

Further  Resolved,  That  said  Company  is  authorized  to  countersign, 

when  signed  by  the  President  and  Secretary  of  this  Company,  an  original  issue  of 
certificates  of  shares  of  this  Company  to  the  number  of  shares  of 

Common  Stock  and  shares  of  Preferred  Stock,  and   to   enter  the 

particulars  of  the  holdings  of  said  shares  in  the  register  from  time  to  time. 

Further  Resolved,  That  the  Company  may  apply  and   act   under 

instructions  of  ,  Counsel  of  this  Company,  in  respect  to  any  legal 

question  arising  in  connection  with  said  Agency. 

Further  Resolved,  That  the  Secretary  be  and  is  hereby  authorized  to  sign,  and 
seal  with  the  Company's  Seal,  a  Certificate  of  Authorization  to  said 
Company  in  the  form  submitted  at  this  meeting. 

That  the  total  authorized  capital  stock  of  said  Company  is  $  ,  divided 

into  $  of  Common  Stock  and  $  of  Preferred  Stock. 

842 


FORMS   AXD    PRECEDENTS. 

That  said  shares  are  the  par  value  of  S  each. 

That  certificates  of  stock  are  now  outstanding. 

That  the  property  for  which  the  above-mentioned  shares  are  issued  has  been 
actually  conveyed  or  transferred  and  delivered  to  the  Company. 

That  the  Officers  authorized  by  the  foregoing  resolutions  to  sign  certificates  of 
stock  will  sign  as  follows  : 

The  President  will  sign 

The  Secretary  wdl  sign 

Names  of  Officers.  Addresses. 

President, 
Vice-President, 
Treasurer, 
Secretary. 
Attorney, 

Names  of  Directors.  Addresses. 


\ 


Business  address  of  the  Company, 

Date  of  Annual  Meeting, 

Notice  for  calling  Annual  Meeting  as  required  by  the  By-Laws.  , 

Signed  and   sealed  in  behalf  of  the  Company  by  authority  of  the  Board  of 
Directors,  this  day  of  ,  190  . 

For  the  Company, 

,  Secretary. 

State  of 
County  of 

On  the  day  of  in  the  year  ,  before  me  personally 

came  ,  to  me  known,  who,  being  by  me  duly  sworn,  did 

depose  and  say  that  he  resided  in  ;  that  he  is  the  of  the 

Company,  the  corporation  described  in  and  which  executed  the  above 
instrument ;  that  he  knew  the  seal  of  said  corporation  ;  that  the  seal  affixed  to  said 
instrument  was  such  corporate  seal ;  that  it  was  affixed  by  order  of  the  Board  of 
Directors  of  said  Corporation,  and  that  he  signed  his  name  thereto  by  like  order. 

,  Notary  Public. 

County. 

(A)  UNDERWRITING  AGREEMENT. 
Company. 

Covering  Year,  First  Mortgage,         per  cent,     Sinking  Fund,  Coupon 

Gold  Bonds  ;  redeemable  at         and  interest. 
Dated         ,  190  .  Due  ,  19     . 

Interest  Payable  and  al  the  office  of  the  Trust  Company, 

Trustee. 

This  Agreement,  made  and   entered  into  this  day  of  ,  190  ,  by 

and  between  of  the  city  of  ,  State  of  ,  parties  of  the 

first  part  (hereinafter  called  "the  Managers"),  and  the  several  subscribers  to  this 
syndicate  agreement,  parties  of  the  second  part  : 

Whereas,  the  parties  of  the  first,  pari  have  organized  a  corporation  known  as  the 

Company,"  under  the  laws  of  the  Stair  of  ,  with  a  capital  of 

divided  into  shares  of  the    par  value  of  %         each,   which    will    issue 

of  first   mortgage,  six    per  cent,  year,  sinking  fund,  coupon  gold    1 'Is, 

subject  to  call  at        ami  accrued  interest,  of  which  will  lie  used  as  part 

payment  of  the  properly  purchased  and  will  be  left,  in  the  treasury  for  its 

use,  leaving  which  are  hereby  underwritten. 

And  Whereat,  the  subscribers  hereto  are  desirous  of  underwriting  a  porti f 

the  proposed  issue  of  bonds,  as  provided  \,\  this  agreement,  and  thereby  participate 

843 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

ing  in  the  profits  to  be  derived  from  the  sale  of  said  bonds  or  becoming  the  owners 
thereof.     Now,  this  agreement  witnesseth  : 

That  in  consideration  of  the  premises,  and  the  mutual  promises  hereinafter  con- 
tained, the  subscribers  severally,  but  not  jointly,  agree  with  the  Managers  and  with 
each  other  as  follows  : 

I.    The  subscribers  severally  subscribe  for  said  first  mortgage,        per  cent, 
year,  sinking  fund,  coupon  gold  bonds,  to  the  amounts  (par  value)  set  opposite 
their  names  respectively,  and  agree  to  take  and  pay  for  said  bonds,  or  any  part 
thereof  allotted  to  them,  in  cash,  at  per  cent  of  par,  together  with  accrued 

interest ;  payment  therefor  to  be  made  to  the  Trust  Company,  hereinafter  called 

"  the  Trustee,"  in  the  City  of  ,  upon  demand  of  the  managers  when  bonds 

or  interim  certificates  representing  the  same  shall  be  ready  for  delivery,  but  payment 
shall  not  be  required  before  ,  190  .     Upon  such  payment,  the  subscriber 

shall  receive  an  interim  certificate  of  the  Trnst  Company  in  lieu  of  said 

bonds,  which  certificate  shall  also  provide  for  the  delivery  of  the  bonds  and  all  cou- 
pons attached  on  ,  190  ,  or  before,  in  the  discretion  of  the  Managers.     Each 
subscriber  upon  the  payment  of  each  exclusive  of  interest  shall  receive 
par  value  of  bonds  aforesaid  aud             par  value  of  the  said  stock. 

IT.  It  is  further  agreed  that  all  bonds  allotted  and  taken  hereunder  shall  be 
held  by  the  parties  of  the  second  part,  subject  to  the  demand  and  control  of  the 
Managers  except  as  hereinafter  provided,  until  ,  190  ,  who  shall,    during 

such  time,  have  full  power  and  discretion  to  sell  the  said  bonds  or  any  part  thereof 
for  the  joint  benefit  of  the  parties  of  the  second  part  at  not  less  than  and  accrued 
interest,  by  either  public  or  private  sale,  and  that  upon  notice  by  the  Managers  to 
any  subscriber  hereto,  the  bonds  allotted  to  him  or  the  part  designated  by  the 
Managers,  shall  be  delivered  to  the  Trustee,  except  such  as  shall  have  been  previ- 
ously withdrawn  from  sale,  as  hereinafter  provided,  and  said  Managers  shall,  within 
thirty  days  after  such  delivery,  pay  to  the  Trustee,  to  be  remitted  to  the  owners  of 
the  bonds  so  deposited,  per  cent  of  their  par  value,  together  with  accrued  interest. 
The  managers  shall,  so  far  as  practicable,  call  from  the  subscribers  hereto,  bonds 
pro  rata. 

III.  It  is  mutually  agreed  by  the  subscribers  hereto  that  this  syndicate  shall 
hold  all  of  the  said  bonds  subscribed  for  as  a  joint  holding  for  a  period  of  six  months 
from  the  day  of  ,  190  ,  unless  said  bonds  are  sooner  sold,  and  that  the  time- 
for  the  joint  holding  of  any  remaining  unsold  bonds  may  be  further  extended  for  a 
period  to  be  determined  by  a  vote  of  two  thirds  in  interest  of  the  subscribers.  Any 
member  of  this  syndicate  authorized  by  the  Managers  may  offer  and  sell  the  bonds, 
as  opportunity  occurs,  at  a  price  to  be  fixed  from  time  to  time  by  the  Managers : 
said  price,  however,  not  to  be  less  than  aud  accrued  interest,  to  the  syndicate, 
except  by  written  consent  of  two-thirds  in  interest  of  the  subscribers  hereto. 

IV.  Any  subscriber  duly  authorized  to  sell  bonds,  shall  be  paid  a  commission 
of  one  per  centum  of  the  par  value  of  the  bonds  sold  by  him,  said  commission  to  be 
paid  by  the  Managers  and  charged  to  the  syndicate  at  the  time  of  such  sale  and  de- 
livery ;  any  syndicate  member  selling  any  bonds  shall  at  the  time  notify  the  Mana- 
gers and  shall  receive  instructions  from  said  Managers  as  to  whether  said  bonds  so 
sold  shall  be  delivered  from  his  holding,  or  be  drawn  by  him  from  the  Managers. 

In  the  event  of  his  being  instructed  to  deliver  his  own  bonds,  he  shall  immedi- 
ately remit  to  the  said  Trustee,  to  the  credit  of  the  Managers,  the  difference  between 
the  cost,  viz. :  aud  interest,  and  the  selling  price  of  the  bonds ;  and  in  the  event 
of  drawing  them  from  the  Managers,  he  shall  pay  the  Trustee,  for  the  credit  of  the 
Managers,  for  the  bonds,  at  the  full  authorized  selling  price,  together  with  accrued 
interest  to  date  of  delivery. 

V.  Any  subscriber  hereto  may  withdraw  his  bonds  from  this  underwriting 
agreement,  provided  such  subscriber  notifies,  in  writing,  the  Managers,  at  the  time 
of  signing  the  underwriting  agreement,  of  his  or  their  intentions  so  to  do;  such 
party  so  withdrawing  bonds  agrees,  during  the  life  of  the  underwriting  agreement 
and  any  extension  thereof,  not  to  offer  for  sale  or  sell  any  of  such  bonds,  and  waives 
profits,  except  stock  hereunder. 

VI.  The  right  and  power  to  enforce  this  agreement,  when  the  same  shall  be- 
come binding,  operative  and  effective,  is  hereby  vested  exclusively  in  the  Managers, 

844 


FOR-MS    AM)    PRECEDENTS. 

who  alone  shall  have  the  right  to  enforce  payment  of  all  obligations  assumed  by  the 
subscribers  hereto. 

VII.  In  case  for  any  reason,  whether  before  or  after  this  agreement  has  other- 
wise become  binding,  operative,  and  effective,  the  Managers  shall  determine  to  aban- 
don this  underwriting  plan,  and  the  organization  of  the  corporation,  and  shall  so 
declare,  then  this  agreement  in  all  its  parts,  including  the  obligation  to  deliver  said 
bonds  or  any  of  the  stock,  shall  be  and  become  forthwith  null  and  void,  and  the  sub- 
scribers hereto  shall  be  notified  accordingly  by  the  Managers,  and  all  moneys  paid 
hereunder  shall  be  returned. 

VIII.  The  Trustee  shall  be  the  depository  of  the  Managers  and  shall  hold  the 
joint  funds  and  profits  arising  hereunder,  and  shall  distribute  the  same  from  time  to 
time  iu  accordance  with  the  directions  of  the  Managers,  prorata  among  the  sub- 
scribers hereto,  except  that  it  shall  pay  therefrom  the  commissions  and  expenses 
arising  hereunder. 

IX.  The  managers  shall  receive  no  compensation  for  their  services  as  Mana- 
gers and  shall  not  be  liable  under  any  of  the  provisions  of  this  agreement,  or  in  or 
for  any  matter  therewith  connected,  provided  reasonable  care  and  discretion  shall 
have  been  exercised  by  them  in  the  discharge  of  their  duties. 

X.  This  agreement  shall  be  binding  upon  the  parties  of  the  second  part  only 
when  subscriptions  hereto  shall  have  been  made  to  the  extent  of  at  least 

Ri^ht  is  reserved  to  reject  any  subscription  or  to  allot  a  less  amount  than   that 
subscribed  for. 

In  Witness  Whereof,  the  parties  of  the  first  part  have  signed  an  original  hereof, 
and  the  subscribers,  parties  of  the  second  part,  have  signed  said  original  or  a  coun- 
terpart thereof,  all  of  which  shall  be  taken  and  deemed  as  one  original  instrument. 

C 
Managers  s __ 

Subscribers.  Address. 


(B)     FORM  FOR  UNDERWRITING  AGREEMENT. 

Company. 

Organized  under  tue  Laws  of  the  State  of 

Authorized  Capital  Stock,  & 
Divided  into  shares  of  $  each  Common  Stock. 

This  Company  is  organized  to  control  the  operation  of  and  all 

inventions  and  patents  relating  thereto  in  the  United  States  of  America  (including 
United  States  ships,  wherever  they  may  be),  Cuba,  Porto  Rico,  the  Hawaiian 
Islands,  the  Philippine  Islands,  Alaska,  the  Aleutian  Islands,  and  the  Danish  West 
Indies. 

Guaranty  Agreement  for  8500,000  Common  Stock. 

,  hereinafter  called  the  "Syndicate  Managers,''  have  entered  into 
an  agreement  with  ,  a  copy  of  which  is  attached  hereto,  as  Schedule 

"  A,"  aud  made  a  part  hereof,  concerning  the  sale  in  accordance  with  the  terms 
of  said  Schedule  "  A  "  of  $2,500,000  par  value  of  the  above  capital  stock. 

The  parties  hereto  desire  to  form  a  syndicate  to  guarantee  the  payment  of  the 
sum  of  §500,000  working  capital  as  provided  in  Schedule  "  A.'' 

Therefore  the  Syndicate  Managers  and  the  subscribers  hereto,  in  consideration 
of  the  agreements  herein  contained,  and  of  the  efforts  and  expenses  incurred  by 
the  Syndicate  Managers  in  connection  with  this  agreement,  agree  as  follows: 

First.    The  Syndicate   Mauagers  shall  undertake  the  Bale  of  shares  of  said    --lock 

iii  accordance  with  the  provision-,  of  Schedule  "A,"  and  shall  have  the  usual 
discretionary  powers  hereunder. 

8  1 5 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

The  subscribers  each  severally  for  himself  and  not  for  any  other  hei-eby  agree 
upon  the  demand  of  the  Syndicate  Managers,  to  pay  to  the  Syndicate  Managers  a 
sum  or  sums  not  to  exceed  the  amount  set  opposite  their  respective  signatures 
hereto  as,  and  when,  and  in  such  instalments  as  such  payments  may  be  called  for 
by  the  Syndicate  Managers,  or,  if  a  portion,  but  not  the  whole  of  said  $500,000 
shall  have  been  procured  by  the  Syndicate  Managers,  by  means  of  such  sales,  to 
pay  in  like  manner  to  the  Syndicate  Managers,  and  upon  their  demand,  such 
portion  of  the  sums  respectively  subscribed  for  by  them  hereunder  (in  the  propor- 
tion which  the  subscription  of  each  bears  to  the  total  subscriptions  hereunder),  as 
shall  be  necessary  to  make  up  the  said  sum  of  $500,000 ;  provided,  however,  that 
said  demand  or  demands  shall  be  made  in  writing  by  the  Syndicate  Managers  at 
least  ten  days  before  the  date  of  the  payment  therein  demanded,  and  that  not  more 
than  one-half  of  the  total  amount  subscribed  shall  be  called  within  sixty  days  from 
the  date  hereof. 

Second.  The  Syndicate  Managers  shall,  if  they  have  succeeded  in  thus  procur- 
ing said  sum  of  $500,000,  endeavor  within  sixty  days  from  the  date  hereof  to  sell 
enough  of  the  remainder  of  said  $2,500,000  par  value  of  said  stock  to  net  the 
further  sum  of  $ 250,000,  as  provided  in  Schedule  "  A,"  and  in  making  any  sales 
of  said  stock  they  shall  do  so  at  the  best  price  which  they  find  to  be  obtainable. 

Third.  This  agreement  shall  become  effective  and  obligatory  upon  the  sub- 
scribers as  soon  as  the  total  sum  of  $500,000  shall  have  been  subscribed  hereunder. 

Fourth.  The  money  received  from  said  sales  of  stock,  and  the  stock  remaining 
in  the  hands  of  the  Syndicate  Managers  after  completing  said  sales,  shall  be  paid 
over,  disposed  of,  and  distributed  as  provided  in  Schedule  "  A." 

Fifth.  The  Syndicate  Managers  shall  not  be  liable  hereunder  except  for  the 
exercise  of  good  faith  and  of  reasonable  diligence,  and  they  may  become  sub- 
scribers hereto  with  like  force  and  effect  as  if  they  were  not  Syndicate  Managers. 

Sixth.  In  case  of  default  of  any  subscriber  hereunder,  the  Syndicate  Managers 
shall  have  the  option  either  to  enforce  this  agreement  against  the  defaulting  sub- 
scriber or  to  declare  forfeited  all  payments  theretofore  made  by  such  defaulting 
subscriber,  and  to  accept  additional  subscriptions  for  the  amount  of  any  payment 
so  in  default,  and  thereupon  to  deprive  each  subscriber  so  in  default  of  any 
participation  whatever  in  this  agreement  or  of  the  benefits  to  be  derived  therefrom. 

In  the  event  of  the  dissolution  of  the  copartnership  of  E.  Rollins  Morse  &  Bro., 
the  survivors  and  successors,  if  any,  of  said  copartnership  shall  become  Syndicate 
Managers  hereunder,  having  the  same  powers  and  duties  as  if  originally  named  as 
Syndicate  Managers. 

This  agreement  shall  bind  and  inure  to  the  benefit  of  the  parties  hereto,  and 
their  respective  executors,  administrators,  and  assigns. 

Separate  copies  of  this  agreement  may  be  executed  and  delivered  with  the 
same  force  and  effect  as  if  all  the  signatures  to  said  separate  copies  were  appended 
to  one  original  agreement. 

New  York,  March  15,  1902. 

Names.  Addresses.  Subscription. 


Schedule  A. 


Agreement,  made  and  entered  into  at  the  City  of  ,  on  the 

day  of  ,  190     ,  by  and  between  ,  of  the  City  of  , 

State  of  ,  hereinafter  called  the  "  Purchaser,"  party  of  the  first  part, 

and  the  firm  of  ,  of  the  City  of  ,  hereinafter  called  the 

"  Syndicate  Managers,"  parties  of  the  second  part,  Witnesseth : 

Whereas,  the    Purchaser   owns   or  has   the   right  to   acquire   the   ownership 
of  $2,500,000   par  value   of  the   share   capital   of  the  Company,  a 

Corporation  organized  under  the  laws  of  the  State  of  ,  whose  total 

846 


FORMS   AND    PRECEDENTS. 

authorized  capital  stock  is  810,500,000,  on  the  organization  of  a  guaranty  or  under- 
writing syndicate  which  will  undertake  to  pay  to  said  Company  the 
sum  of  8500,000,  for  working  capital,  on  or  before  the  daj  of  , 
190  ,  and  ou  further  payment  to  of  the  sum  of  §250,000  on  or 
before  ,  190  ,  which  latter  sum  is  expected  to  be  derived  from  the 
sale  of  a  part  of  said  §2,500,000  of  share  capital  as  hereinafter  provided,  or  if  said 
sum  shall  not  have  been  procured  by  means  of  said  sales,  the  Purchaser,  in  lieu 
thereof,  is  to  deliver  to  said  the  stock  deposited  as  collateral  as 
hereinafter  provided ;  and, 

Whereas,  the  Purchaser  desires  the  services  and  assistance  of  the  Syndicate 
Managers  in  forming  said  Syndicate; 

Now,  therefore,  the  parties  hereto,  in  consideration  of  the  premises  and  of  the 
agreements  herein  contained,  hereby  agree  as  follows  : 

The  Syndicate  Managers  agree  to  use  their  best  endeavors  to  form  a  syndicate 
-on  or  before  the  day  of  ,  to  guarantee  the  payment  of  said 

sum  of  8500,000,  as  called  for  by  the  Syndicate  Managers,  and  all  of  which  shall 
be  paid  in  not  later  than  the  day  of  ,  190     ,  and  to  sell  said 

shares  as  hereinafter  agreed. 

The  Purchaser  agrees  upon  the  completion  of  said  guaranty  syndicate,  and  upon 
the  approval  of  said  syndicate  by  him,  to  deliver  to  the  Syndicate  Managers  said 
S2,500.000  par  value  of  shares,  of  which  amount  the  Syndicate  .Managers  shall 
thereupon   deposit   in   the  Trust   Company  8833,000,    par   value,   as 

collateral  security  for  the  payment  of  said  8250,000,  which  deposit  shall  be  made 
under  an  agreement  approved  by  the  parties  hereto. 

The  Syndicate  Managers  shall  endeavor  to  sell  enough  of  the  82,500,000  par 
value  of  said  shares  to  provide  said  sum  of  8500,000  to  be  paid  as  guaranteed  by 
said  syndicate,  and  enough  more  of  said  82,500,000  of  shares  to  provide  said  sum 
of  8250.000  to  be  paid  to  said  Trust  Company  on  or  before  the  first  day  of 
September,  1902. 

VOTING  TRUST  AGREEMENT. 

This  Agreement  made  this  day  of  ,  191  ,  by  and  between  the 

undersigned,  stockholders  of  the  Company,  parties  of  the  first  part  and 

Trust  Company,  party  of  the  second  part : 

Witnesseth,  that,  in  consideration  of  the  mutual  covenants  and  agreements  here- 
inafter set  forth,  and  in  further  consideration  of  the  sum  of  one  dollar  by  each  of 
the  parties  paid  to  the  others,  the  receipt  of  which  is  hereby  acknowledged,  the  said 
parties  to  this  agreement  hereby  agree  by  and  with  each  other  as  follows,  to  wit: 

First.  The  said  parties  of  the  first  part  do  hereby  assign  and  transfer  and  agree 
to  deliver  unto  the  said  party  of  the  second  part,  the  number  of  shares  of  stock  of 
the  Company  (a  corporation  organized  and  existing  under  the  laws  of  the 

State  of  )  set  opposite  their  respective  names,  to  be  held  by  said  party  of  the 

second  part  until  the  day  of  ,  19     ,  in  trust,  however,  for  said  par- 

ties of  the  first  part,  their  executors,  administrators,  and  assigns  at  all  times  subject 
to  the  terms  and  conditions  hereinafter  set  forth. 

Second.  Said  parties  of  the  first  part  do  hereby  covenant  and  agree  that  said 
party  of  the  second  part  as  voting  trustee  for  said  parties  of  the  lirst  part,  shall,  for 
a  period  of  years  from  date  hereof,  possess,  and  be  entitled  to  exercise, 

without,  restriction  or  restraint  other  than  is  herein  contained,  the  right  to  vote  said 
shares  of  stock  in  said  Company  hereby  conveyed  by  said  parties  of  the 

first  part,  to  said  party  of  the  second  part. 

Third.  The  said  party  of  the  second  part  does  hereby  promise  and  agree  with 
said  parties  of  the  first  part,  tiiat,  every  holder  of  voting  trust  cert itieates  issued  as 
hereinafter  provided  shall,  immediately  upon  the  execution  <>(  this  agreement,  and 
upon  the  delivery  by  him  to  said  party  of  the  second  pari  of  the  Btock  certificates 
hereby  assigned,  receive  from  said  party  of  the  second  part  voting  trust  certificates 
to  an  aggregate  amount  equal  to  the  amount  of  stock  so  delivered,  which  certificate 
shall  be  in  the  following  form,  to  wit: 

847 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

Voting  Trust  Certificate. 

No.- — Shares. 

Issued  by  the  Trust  Company. 

This  is  to  certify,  that  the  (here  insert  name  of  trustee)  have  received  ou 
deposit  from  shares  of  the  stock  of  the  Company 

of  the  par  value  of  $  each,  iu  trust  under  the  provisions  of  an  agreement 

bearing  date  the  day  of  ,  19     ,  entered  into  between  the  owners  of 

the  capital  stock  of  the  said  Company  and  the  undersigned. 

This  is  to  further  certify,  that  (here  insert  name  of  stockholder)  will, 
upon  the  determination  of  the  trust  under  which  the  said  shares  of  stock  of 
Company  were  deposited,  be  entitled  to  receive  from  the  undersigned,  upon  the 
surrender  of  this  certificate  duly  endorsed,  a  certificate  of  shares  of  the  cap- 

ital stock  of  Company,  so  deposited. 

This  is  to  certify,  that  the  undersigned  will  make  payments  to  the  said  (here 
insert  name  of  stockholder)  prior  to  the  determination  of  the  trust  upon  which  the 
said  stock  of  said  Company  was  deposited,  equal  to  the  dividends,  if  any,  if  col- 
lected, by  the  undersigned  as  Trustees  upon  the  total  number  of  shares  of  the 
common  stock  of  said  Company  heretofore  assigned  by  said  (here  insert  name  of 
stockholder)  to  the  undersigned  in  trust;  and  until  the  day  of  ,  19     , 

the  undersigned,  as  voting  trustee,  for  said  shares  of  the  stock  of  said 
Company,  shall  possess  and  be  entitled  to  exercise  the  right  to  vote  in  respect  to 
any  of  such  stock  ;  it  being  expressly  stipulated  and  agreed  that  no  voting  rights 
shall  pass  to  the  holder  thereof  by  virtue  of  his  ownership  of  this  certificate. 

This  certificate  is  transferable  only  on  the  voting  trust  certificate  book  (which 
it  is  hereby  covenanted  and  agreed  shall  be  kept  for  that  purpose  by  the  under- 
signed) either  iu  person  or  by  power  of  attorney  duly  authorized,  according  to 
rules  which  have  been  established  for  that  purpose  by  the  undersigned  and  upon 
surrender  hereof ;  and  until  so  transferred  the  undersigned  may  treat  the  registered 
holder  as  the  owner  hereof  for  all  purposes  whatsoever,  except  that  delivery  of  such 
certificates  herein  shall  not  be  made  without  the  surrender  hereof. 

In     Witness  Whereof,  the  said  Trust  Company  has  caused  these  pres- 

ents to  be  signed  by  its  President  and  its  corporate  seal  to  be  hereunto  affixed,  and 
to  be  attested  by  its  Secretary,  this  dav  of  ,  19     . 

TRUST  COMPANY, 

,  President. 
Attest : 

,  Secretary. 

Fourth.  That  each  and  all  of  the  covenants  and  agreements  contained  in  the 
foregoing  form  of  voting  trust  certificate  are  hereby  made  part  and  parcel  of  this 
agreement,  and  shall  be  and  are  hereby  made  binding  upon  the  several  parties  to 
this  agreement,  their  executors,  administrators,  successors,  and  assigns. 

Fifth.  At  any  time  until  the  expiration  of  this  agreement  as  hereinbefore  pro- 
vided, the  said  party  of  the  second  part  may  receive  any  additional  full-paid  shares 
of  the  capital  stock  of  the  Company,  either  common  or  preferred,  upon 

the  terms  and  conditions  of  this  agreement,  and  it  shall  deliver  in  exchange  therefor 
voting  trust  certificates  as  hereinbefore  provided. 

Sixth.  Iu  voting  stock  held  by  it,  the  said  party  of  the  second  part  shall  exer- 
cise its  best  judgment  and  discretion  at  all  times  in  voting  for  the  election  of  suit- 
able directors  for  said  Company,  to  the  end  that  the  affairs  of  the  Company 
shall  be  carefully  and  intelligently  managed,  and  in  voting  on  all  other  matters 
which  may  come  before  it  at  any  stockholders'  meeting  of  said  Company,  shall  exer- 
cise like  judgment  and  discretion. 

Seventh.  It  is  hereby  covenanted  and  agreed  that  the  said  party  of  the  second 
part  shall  not  be  liable  or  incur  any  responsibility  by  reason  of  its  acts  of  omission 
or  commission  in  the  premises,  except  for  wilful  misconduct  or  gross  negligence  in 
the  execution  of  the  trust  hereby  created,  and  which  is  hereby  accepted  by  said 
party  of  the  second  part. 

In  Witness  Whereof,  the  several  parties  to  this  agreement  have  hereunto  set 
their  hands  and  seals  this  day  of  ,  191  . 

848 


FORMS    AND    PRECEDENTS. 


FORM   FOR  MINUTES   OF  MEETING  OF  STOCKHOLDERS 
AUTHORIZING  BOND  ISSUE. 

Minutes  of  a  special  meeting  of  the  stockholders  of  the  Company, 

held  at  the  office  of  the  Company  in  the  City  of  ,  State  of  * , 

on  the  day  of  ,  190     ,  at  o'clock  in  the        noon. 

The  following  stockholders  were  present  in  person : 

Names.  No.  of  Shares. 

By  proxy: 

Names.  Names  of  Proxy.  No.  of  Shares. 

The  meeting  was  called  to  order  by  the  President,  and  the  Secretary  proceeded 
to  take  the  minutes  : 

The  Secretary  reported  that  due  and  proper  notice  of  the  meeting  had  been  sent 
to  each  stockholder,  and  presented  the  affidavit  of  the  Secretary  to  thai  effect.  On 
motion  duly  made  and  seconded,  a  copy  of  said  affidavit  was  ordered  spread  upon 
the  minutes : 

(Insert  copy  of  affidavit  and  notice  of  meeting.) 

The  proxies  above  mentioned  were  presented  and  ordered  tiled. 

The  following  resolution  was  then  presented  to  the  meeting  : 

Whereas,  it  seems  expedient  to  the  stockholders  of  the  Company  that 

bonds  of  the  said  Company  be  issued  to  the  aggregate  amount  of  thousand 

dollars  (S  ),  each  bond  to  be  of  the  amount  of  dollars  (S  ), 

the  entire  issue  to  be  disposed  of  on  such  terms  and  conditions  as  the  Board  of 
Directors  of  the  Company  may  hereafter  by  resolution  determine,  the  said  issue  of 
bonds  to  be  secured  by  a  mortgage  or  trust  deed  covering  all  the  property  both  real 
and  personal  of  said  Company  wherever  situated,  such  mortgage  or  trust  deed  to 
run  to  the  Trust  Company,  of  ,  as  Trustee  tor  the  use  and 

benefit  of  the  purchasers  of  said  bonds  ;  Now,  therefore,  be  it 

Resolved,  that  the  Board  of  Directors  of  this  Company  he  and  they  hereby  are 
empowered  to  provide  by  appropriate  resolution  for  the  issuing  of  a  series  of  bonds 
of  the  denomination  of  dollars  (S  )  each,  aggregating 

dollars  in  all,  each  bond  to  read  substantially  as  follows:  (insert  copy  of  bond  and 
coupons  attached).  The  said  bonds  to  be  disposed  of  on  such  terms  and  conditions 
as  the  Board  of  Directors  may  hereafter  by  resolution  determine,  and  to  be  secured 
by  a  mortgage  or  trust  deed  running  to  the  of  the  City  of  , 

County,  ,  as  Trustee,  to  read  as  follows,  to  wit : 

(Insert  copy  of  trust  deed,  etc.) 

It  was  moved  and  seconded  that  the  foregoing  resolution  be  adopted. 

Ballot  having  been  duly  had,  and  all  the  stockholders  having  roted,  the  chair- 
man announced  that  votes  had  been  cast  in  favor  of  the  adoption  of  the 
foregoing  resolution,  and  that  there  were  no  votes  cast  in  opposition  thereto.  The 
chairman  then  announced  that  there  having  been  more  than  a  majority  of  the  total 
stock  of  the  Company  cast  in  favor  of  the  adoption  of  the  resolution,  the  said  reso- 
lution was  therefore  duly  adopted. 

No  further  business  was  presented  and  on  motion  the  meeting  adjourned. 

,  Secretary. 

Approved: 

,  Chairman. 

FORM  FOR  MINUTES  OF  MEETING  OF  DIRECTORS  AUTHOR- 
IZING BOND   ISSUE. 

Minutes  of  a  meeting  of  the  Board  of  Directors  of  the  Company,  held 

at  the  office  of  the  Company,  in  the  city  of  ,  State  of  ,  on  the 

day  of  ,  190     ,  at  o'clock  in  the  noon. 

Present,  ,  being  all  (or  a  majority)  of  the  Hoard  of  Directors. 

The  meeting  was  called  to  order  liy  the  President,  and  the  Secretary  proceeded 
to  take  the  minutes  ; 

849 


INCORPORATION    AND    ORGANIZATION   OP    CORPORATIONS. 

The  Secretary  presented  a  waiver  of  notice  of  the  meeting  signed  by  all  the 
Directors,  and.  on  motion  duly  made  and  seconded  a  copy  thereof  was  ordered 
spread  upon  the  minutes : 

(Insert  waiver.) 

The  minutes  of  the  last  meeting  of  the  Board  were  read  and  approved. 

The  chairman  then  presented  a  copy  of  a  resolution  duly  passed  by  the  stock- 
holders of  the  Company  at  a  meeting  duly  held  at  the  office  of  the 
Company,  in  the  city  of  ,  State  of  ,  at  o'clock  of  said  day, 
providing  for  the  issuance  of  a  series  of  bonds  of  the  amount  of  dollars 
each,  aggregating  dollars  in  amount,  bearing  per  cent  interest 
and  maturing  ,  190  .  Said  bonds  to  be  secured  by  a  mortgage  or  deed 
of  trust  running  to  ,  of  the  city  of  ,  as  Trustee,  on  the  property 
of  the  Company  wherever  situated,  and  empowering  the  Board  of  Directors  of  the 
Company  to  provide  by  appropriate  resolution  for  the  issuing  of  said  series  of  bonds 
to  be  disposed  of  on  such  terms  and  conditions  as  this  Board  may  by  resolution 
determine. 

On  motion  duly  made  and  seconded,  the  following  resolution  was  then  unani- 
mously adopted : 

Whereas,  it  has  been  deemed  expedient  by  the  stockholders  of  the 
Company  that  bonds  of  the  said  Company  in  the  amount  of  dollars  each 

be  issued  to  the  aggregate  amount  of  dollars,  said  bonds  to  be  according 

to  the  following  tenor  and  effect,  to  wit: 

(Insert  form  of  bond.) 
And 

Whereas,  the  stockholders  of  the  Company  have  provided  that  said 

issue  of  bonds  to  the  amount  of  dollars  shall  be  secured  by  a  mortgage 

or  deed  of  trust  covering  all  the  property,  both  real  and  personal,  of  said  Company 
wherever  situated,  such  mortgages  or  deed  of  trust  to  run  to  the  of  the 

city  of  ,  as  Trustee,  for  the  use  and  benefit  of  the  purchasers  of  said  bonds, 

and  to  be  in  form  and  substance  as  follows,  to  wit :  (here  insert  copy  of  deed  of 
trust)  ;  and 

Whereas,  said  resolution  just  referred  to  provided  that  the  entire  issue  of  bonds 
therein  provided  for  should  be  disposed  of  on  such  terms  and  conditions  as  this 
Board  should  by  resolution  determine ;  now,  therefore,  be  it 

Resolved,  that  the  proper  officers  of  this  Company  be  and  they  hereby  are  directed 
and  empowered  to  proceed  to  issue  said  series  of  bonds  hereinbefore  referred  to, 
aggregating  dollars  in  amount,  and  they  are  hereby  further  directed  and 

empowered  to  execute  for  and  in  behalf  of  said  Company  the  said  mortgage 

or  deed  of  trust  running  to  the  of  the  city  of  as  Trustee,  for  the 

use  and  benefit  of  the  purchasers  of  said  bonds,  all  as  hereinbefore  set  forth ;  and  be 
it  further 

Resolved,  that  the  said  officers  of  said  Company  be  and  they  hereby 

are  empowered  to  dispose  of  said  bonds  at  their  discretion  at  the  best  price  obtain- 
able, the  same  to  be  not  less  than  dollars  for  each  bond  of  the  denomination 
of  dollars  (and  to  give  as  a  bonus  to  all  purchasers  of  said  bonds  if  they 
think  it  expedient  so  to  do,  shares  of  the  treasury  stock  of  said 
Company  of  the  par  value  of  dollars  per  share  for  each  bond  of  said 
Company  by  them  purchased  of  the  denomination  of  dollars 
as  herein  provided  for). 

(On  motion  duly  made  and  carried  the  proper  officers  of  the  Company  were 
authorized  to  take  the  necessary  steps  to  secure  a  permit  from  the  State  of 
authorizing  the  said  Company  to  do  business  in  said  State.) 

No  further  business  was  presented,  and  ou  motion  the  meeting  adjourned. 

,  Secretary- 

Approved : 


850 


FORMS  AND    PRECEDENTS. 


CERTIFICATE  OF  PAYMENT   OF   CAPITAL  STOCK. 

We,  the  President  and  a  majority  of  the  Board  of  Trustees  of  the  of 

the   State  of  ,  do  hereby  certify  that  the  authorized  capital  stock  of  said 

company  is  S  ,  of  which  $  has  been  paid  in,  and  that  there  are 

debts  of  said  Company  amounting  to  $ 

,  President. 


Trustees 


I,  ,  Secretary  of  the  of  the  ,  do  hereby 

swear  that  the  facts  stated  in  the  above  certificate   are  true   to  the   best  of  my 
knowledge  and  belief. 


Subscribed  and  sworn  to  before  me  this  day  of  January,  A.  D.  1905. 


Notary  Public  for  the  State  of 

Note. — When  there  are  no   debts,  insert  word  "no"   and   strike   out    "amounting 

to  § 

FORM   OF  TRUST  DEED  TO    BE  EXECUTED   BY  A  CORPORATION 
IN  CONNECTION   WITH  A  BOND   ISSUE. 

This  Indenture  made  this  day  of  ,  190  ,  by  and  between 

the  Company,    a   stock   corporation   duly  organized   and    existing 

under  the  laws  of  the  State  of  ,  party  of  the  first  part  hereinafter 

called  the  Company  and  the  Trust  Company,  a  corporation  organ- 

ized and  existing  under  the  laws  of  the  State  of  ,  as  Trustee  for  the 

purposes  hereinafter  set  forth,  party  of  the  second  part: 

Witnesselh,  Whereas,  the  said  party  of  the  first  part  is  a  corporation  duly  or- 
ganized and  existing  under  the  laws  of  the  State  of  ,  and  has  acquired 
several  plants  and  properties  hereinafter  described,  and 

Whereas,  the  Company  in  the  exercise  of  the  powers  in  that  behalf  possessed 
by  it  and  in  accordance  with  the  resolutions  duly  adopted  by  its  Board  of  Directors 
and  by  its  stockholders  at  a  meeting  duly  and  regularly  called  and  held,  has  deter- 
mined to  make  aud  issue  its  coupon  bonds  in  the  aggregate  amount  of 
dollars  ($  )  payable  in  gold  coin  of  the  United  States  of  the  present  standard 

of  weight  and  fineness,  said  bonds  to  be  coupon  bonds  of  the  par  value  of 
dollars  (8  )  each,  each  of  which  bonds  is  to  bear  a  distinctive  number, 

running   consecutively  from   one   (1)   to  hundred  (  )   and    bearing   in- 

terest at  the  rate  of  per  cent  per  annum  from  the  first  day  of  , 

190  ,  payable  semi-annually  in  like  gold  coin  on  the  first  day  of  and 

in  each  year,  and 

Whereas,  the  said  party  of  the  first  part  under  and  pursuant  to  the  power  and 
authority  aforesaid  has  determined  to  secure  the  prompl  paymenl  of  the  principal 
and  interest  of  all  of  said  bonds  by  executing  aud  delivering  to  the  Trustee  a  mort- 
gage or  deed  of  trust  in  the  terms  of  this  indenture,  conveying  the  plants  and  prop- 
hereinafter  described  and  set  forth,  and  to  that  end  a  mortgage  or  deed  of 
trusl  securing  said  bonds  in  the  form  of  this  indenture  was  submitted  bo  and  ap- 
proved by  the  Board  of  Directors  and  by  the  holders  of  the  entire  capital  Btoci  of 
the  said  Company,  at  a  meeting  of  said  directors  and  of  said  stockholders  respec- 
tively, duly,  and  regularly  called  and  held  for  said  purposes,  and  tin-  President  or 
Vice-President  and  the  Secretary  or  Assistant  Secretary  of  the  Company  were  dulj 
authorized  at  said  meeting  on  behalf  of  said  Company  as  its  act  and  deed  and  under 
its  corporate  seal  to  execute  and  deliver  the  same  to  the  Trustee  ;  and 

85  l 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

Whereas,  the  form  of  bonds  and  the  coupons  to  be  attached  thereto,  and  of  the 
certificate  to  be  signed  by  the  Trustee  for  the  authentication  of  said  bonds  were  at 
said  meeting  severally  and  respectively  submitted  and  approved  by  said  resolutions 
of  the  Board  of  Directors  and  of  all  the  stockholders  of  the  Company,  and  are  sub- 
stantially of  the  following  tenor,  to  wit : 


FORM   FOR   REFUNDING  BOND   ISSUE  SECURED  BY  TRUST  DEED. 

This  Indenture,  made  this  day  of  ,  in   the   year  of  our 

Lord  ,  between  the  ,  a  corporation  duly  created,  organized, 

and  existing  under  and  by  virtue  of  the  laws  of  the  State  of  ,  and  here- 

inafter termed  "  the  Company,"  or  "  the  said  Company,"  party  of  the  first  part,  and 
the  Trust  Company  ,  a  corporation  duly  created,  organized, 

and  existing  under  and  by  virtue  of  the  laws  of  the  State  of  ,  and  here- 

inafter termed  "  the  Trustee,"  or  "  the  said  Trustees,"  party  of  the  second  part, 

Witnesseth:  That  Whereas,   heretofore  and  on,  to  wit,  the  day  of 

,  ,  the  properties,  affairs,  and  concerns  of  ,  here- 

inafter termed  and  ,   hereinafter  termed  >  both 

being   corporations  organized   under  the   laws   of  the    State  of  ,  were 

consolidated  into  one  organization,  having  all  the  properties,  rights,  privileges,  and 
franchises  of  said  and  said  ,  and  being  amenable  to  all  their 

liabilities  as  appears  by  the  certificate  filed  in  the  office  of  the  Secretary  of  State  of 
the  State  of  ,  on  the  day  of  ,  .setting 

forth  the  facts  of  such  consolidation,  and  also  all  other  matters  required  in 
original  certificates  of  incorporation,  winch  said  certificate  was  filed  in  the  offices  of 
the  Clerks  and  Recorders  of  the  several  Counties  in  the  State  of  ,  in 

which  the  same  by  the  laws  of  said  State  was  required  to  be  filed,  and  thereby 
such  consolidation  was    perfected,  aud  the  said  and  became 

,  party  hereto  of  the  first  part ; 

And  Whereas  the  and  the  did,  at  or  after  the  time  of  such 

consolidation,  and  prior  to  the  date  hereof,  severally,  by  proper  conveyances  and 
instruments,  convey  to  the  said  Company,  party  of  the  first  part,  certain  property, 
real,  personal,  and  mixed,  and  all  the  effects,  rights,  powers,  privileges,  and  fran- 
chises of  such  consolidating  corporations  respectively,  which  said  several  convey- 
ances have  been  duly  recorded  in  the  offices  of  the  Clerks  and  Recorders  of  the 
respective  counties  in  said  State  of  ,  where  such  property  and  effects  are 

situated,  and  said  consolidating  companies  did  severally  cause  to  be  deposited  with 
the  directors  of  the  said  Company  all  the  transfer  books,  seals,  books,  and  papers 
of  each  of  the  Companies  so  uniting,  and  the  said  Company  is  now  in  possession 
thereof,  and  of  all  and  singular  the  property  and  effects  iu  said  several  conveyances 
mentioned  and  described  ; 

And  Whereas  the  said  theretofore  had  made  and  executed  under  its 

corporate  seal,  and  delivered  to  ,  as  Trustee,  its  certain  deed  of  trust 

bearing  date  the  day  of  ,  ,  which  was  duly  recorded 

in  the  several  proper  counties  in  the  State  of  ,  in  and  by  which  deed  of 

trust  the  conveyed  to  said  ,  as  Trustee,  all  the  certain  real 

estate  and  property  in  said  deed  of  trust  particularly  described,  for  the  purpose  of 
securing  the  payment  of  the  principal  and  interest  of  its  certain  bonds  bearing  even 
date  therewith,  to  be  issued  under  and  pursuant  to  the  provisions  thereof  to  an 
aggregate  amount  not  exceeding  ,  which  said  bonds  were  of  the  denom- 

ination of  each,  and  numbered  consecutively  from  one  (1)  upwards  to 

thirty-five  hundred  (3500),  both  inclusive,  and  which,  by  their  terms,  were  to  become 
due  and  payable  in  gold  coin,  twenty  years  after  their  said  date,  and  to  bear  interest 
at  the  rate  of  six  per  cent  per  annum,  payable  in  like  gold  coin  semi-annually,  on 
the  in  each  year,  and  of  and  under  which  deed  of  trust  is  now 

the  Trustee ; 

And  Whereas  the  prior  to  the  said  consolidation,  and  on,  to  wit,  the 

day   of  ,  ,  had  made    and    executed   under   its   cor- 

852 


FORMS   AND    PRECEDENTS. 

porate  seal,  and  delivered  to  the  ,  as  Trustee,  its  certain  mortgage  or 

deed  of  trust  dated  on   that  day,  and  on  the  day  of 

respectively,  its   first,  second,  aud  third  supplemental  »es  or  deeds  of 

trust,  all  of  which  were  thereafter  duly  recorded  in  the  offices  of  the   Recordi 
the  counties  in  the  State  of  in  which  the  property  therein  described  was 

situated,  in  and  by  which  deeds  of  trust  the  said 

,  as  Trustee,  all  the  certain  real  estate  and  property  in  said  deeds  of 
trust  described,  for  the  purpose  of  securing  the  payment  of  the  principal  and  in: 
of  its  certain  bonds  (bearing  even  date  with  said  original  deed  of  trust),  to  he  issued 
thereunder  pursuant  to  the  provisions  thereof  to  an  aggregate  amount  not  exceed- 
ing ,  which  said  bonds  were  of  the  denomination  of  .and 
numbered  consecutively  from  one  (1)  upwards  to  twelve  hundred  (1200).  both  inclu- 
sive, and  which,  by  their  terms,  were  to  become  due  and  payable  in  gold  coin  on 
,  ,  and  to  bear  interest  at  the  rate  of  six  per  cent  per  annum,  pay- 
able in  like  gold  coin  semi-annually  on  the  days  of  and 
in  each  year; 

And  Whereas  the  said  Company  has  assumed  the  obligations  of  the 
to  pay  the  principal  and  interest  of  such  of  its  bonds  of  the  date  of  as 

are  outstanding  and  unpaid; 

And  Whereas  there  exists  an  indebtedness  of  principal,  with  accrued  interest,  of 
,  a   corporation   organized  aud  existing  under  the  laws  of 
of  ,  all  the.  property  of  which  was  prior  to  the  consolidation  afon 

purchased  subject    to  said  indebtedness,  and  conveyed  to  the  ,  which 

indebtedness  is  secured  by  two  mortgages  or  trust  deeds,  namely,  one  executed  by 
,  Trustee,  to  and  others,  dated  ,  and  one  execut  1 

by  to  ,  Trustee,   dated  ,  which  indebtedness  has 

also  been  assumed  by  said  Company  ; 

And  Whereas  the  said  deeds  of  trust  of  the  and  of  the 

hereinbefore  mentioned,  provided,  among  other  things,  for  the  creation  of  sinking 
funds  for  the  redemption  and  payment  of  the  bonds  by  said  deeds  of  trust  respect- 
ively secured,  all  of  which  will  more  fully  aud  at  large  appear  by  reference  to  said 
trust  deeds  ; 

And  Whereas  the  said  Company,  being  desirous  of  meeting  all  the  said  obligations 
which  have  been  assumed  by  it  as  aforesaid,  and  of  retiring  all  the  bonds  of  the 
and  of  the  ,  issued   and   outstanding  as   aforesaid,   and  of 

paying  the  said  indebtedness  of  ,  or  exchanging  the  same  for  or  redeem- 

ing the  same  with  the  proceeds  of  bonds  to  be  issued  under  and  secured  1>\  I  b 
presents,  to  the  end  that  said  several  trust  deeds  and  the  liens  thereby  created 
maybe  cancelled  and  discharged  of  record  ;  and  also  of  securing  the  means  to  de- 
velop, work,  and  improve  its  property,  to  open,  mine,  work,  and  improve  and 
operate  its  coal,  iron,  and  other  mines,  aud  to  make  the  necessary  and  convenient 
erections  aud  improvements  appertaining  thereto,  and  to  construct,  complete, 
equip,  maintain,  and  operate  the  certain  furnaces,  foundries,  and  manufacturing 
establishments  in  manner  and  form  as  is  contemplated  by  its  said  articles  of  in- 
corporation, and  to  increase  and  to  extend  its  business; 

And  Whereas  the  authority  of  the  stockholders  of  the  said  consolidating  com- 
panies, owning  more  than  two  thirds  of  the  capital  stock  of  each  of  them,  and  more 
than  three  fourths  of  all  preferred  stock,  for  the  mortgaging  by  said  compauy  of  all 
its  real  and  personal  estate,  franchises,  privileges,  rights,  and  liberties,  to  secure  the 
payment  of  the  aforesaid  indebtedness  and  the  general  mortgage  bonds  issued  here- 
under up  to  the  aggregate  sum  of  bv  a  mortgage  or  Ami  of  trust  upon 
its  property  and  franchises,  and  conferring  upon  the  Board  of  Directors  of  said 

Company  the  power  and  authority  to  carry  the  same  into  effect,  has  been  dul\  given 
and  entered  of  record  in  the  minutes  of  both  Baid  companies,  and  is  also  Bel  forth  in 
the  articles  of  consolidation  incorporating  Baid  <  lompanv  ; 

And  W&ereas,  at  a  meeting  of  the  Board  of  Directors  of  said  Company  there- 
after held,   to   wit,   on   the  day  of  ,  ,  at    the  City  of 

,  ,  it  was  resolved  that    pursuant    to  the  authorization    bv  the 

stockholders  hereinabove  recited,  and  the  articles  of  incorporation  of  Baid  <  lompany, 
the  proper  officers  of  this  Company  be,  and  they  are,  authorized  and  directed  to 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

prepare  such  bonds  and  to  execute  a  mortgage  or  deed  of  trust  as  aforesaid,  secur- 
ing said  last-mentioned  bonds,  the  same  to  be  disposed  of  as  is  hereinafter  provided  ; 
And  Whereas,  in  pursuance  of  sucli  authority,  the  proper  officers  of  said  Com- 
pany have  determined  that  said  bonds  shall  be  in  the  following  form : 

UNITED   STATES  OF  AMERICA, 
State  or 

No.  % 

(Name  of  Company.) 

(Of  .) 

General  Mortgage  Five  Per  Cent  Sinking  Fund  Gold  Bond. 

Know  all  Men  by  these  Presents,  That  the  ,  a  corporation  duly 

organized  under  the  laws  of  the  State  of  ,  hereby  promises  to  pay  to  the 

bearer,  or,  in  case  this  bond  shall  be  registered  in  accordance  with  the  terms  of  the 
endorsement  hereupon,  then  to  the  registered  owner  hereof,  at  the  office  or  agency 
of  the  said  company  in  the  City  of  New  York,  one  thousand  dollars  in  gold  coin  of 
the  United  States  of  the  present  standard  of  weight  and  fineness,  on  the 
day  of  ,  ,  with  interest  thereon  in  like  gold  coin  at  the  rate  of 

five  per  cent  per  annum,  payable  semi-annually  at  the  same  place,  upon  presentation 
and  surrender  of  the  coupons  hereto  annexed,  on  the  days  of  and  in 

each  year  until  the  said  principal  sum  shall  be  full  paid.  And  if  any  default  shall  be 
made  in  the  payment  of  the  interest  upon  this  bond,  and  such  default  shall  continue 
for  a  period  of  six  mouths,  the  whole  amount  of  the  principal  sum  of  this  bond  may 
thereupon  become  due  and  payable,  as  provided  for  in  the  mortgage  or  deed  of 
trust  hereinafter  mentioned. 

This  bond  is  one  of  a  series  of  6000  bonds,  all  of  like  tenor,  date,  and  amount, 
numbered  consecutively  from  1  to  6000,  both  inclusive,  all  of  which  are  secured  by 
a  certain  mortgage  or  deed  of  trust  bearing  even  date  herewith,  and  duly  executed 
and  delivered  by  the  to  the  ,  as  Trustee,  conveying  and  as- 

signing to  said  last-named  company  sundry  lands,  leaseholds,  mining  rights,  and 
other  properties,  real  and  personal,  therein  specified  and  referred  to,  in  trust,  among 
other  things,  to  secure  the  payment  of  the  entire  issue  of  said  bonds,  with  interest, 
as  aforesaid. 

The  holder  hereof  is  entitled  to  the  benefit  of,  and  subject  to  the  obligations  of, 
the  sinking  fund  provided  for  in  the  said  mortgage  ;  it  being  understood,  however, 
that  no  bonds  can  be  compulsorily  redeemed  by  lot,  as  therein  provided,  at  less  than 
105  per  cent  and  accrued  interest. 

This  bond  shall  not  become  valid  until  the  certificate  endorsed  hereon  shall  have 
been  duly  signed  by  the  said  Trustee. 

In  Witness  Whereof,  the  said  has  caused  these  presents  to  be  sealed 

with  its  corporate  seal  and  to  be  signed  by  its  President  or  one  of  its  Vice-Presidents 
and  Secretary  or  Assistant  Secretary,  this  day  of  , 

,  President. 
Attest : 

,  Secretary. 

(Registration  Clause.) 

This  bond  may  be  registered  in  the  owner's  name  on  the  Company's  books  in  the 
City  of  ,  or  at  any  other  place  which  the  Company  may  determine,  such 

registry  being  noted  on  the  bond  by  the  Company's  Transfer  Agent,  after  which  no 
transfer  shall  be  valid  unless  made  on  the  Company's  books  by  the  registered  owner, 
and  similarly  noted  on  the  bond,  but  the  same  may  be  discharged  from  registry  by 
being  transferred  to  bearer,  after  which  it  shall  be  transferable  by  delivery,  but  it 
may  be  again  registered  as  before. 

The  registry  of  the  bond  as  above  shall  not  restrain  the  negotiability  of  the 
coupons  by  delivery  merely,  but  the  coupons  may  be  surrendered  and  the  interest 

854 


FORMS   AXD    PRECEDENTS. 

made  payable  only  to  tlie  registered  owner  of  the  bond,  such  surrender  to  be  certi- 
fied thereon,  as  follows  :  This  is  to  certify  that  the  coupons  representing  the  several 
instalments  of  interest  to  become  due  on  the  within  bond  have  been  surrendered  to 
the  ,  and  cancelled,  and  interest  on  this  bond,  when  hereafter  due,  will 

be  payable  to  the  registered  owner  hereof,  as  certified  hereon,  or  to  his  order. 
Dated 

,  Transfer  Agent* 
(Coupon.) 

S 
The  will  pay  to  the  bearer,  at  its  office  or  agency  in  the  City  of 

,  ,  in  U.  S.  gold  coin,  on  the  day  of 

,  being  six  months'  interest  on  its  General  Mortgage  Bond,  dated 
No. 

,  Treasurer. 
(Trustee's  Certificate.) 

It  is  hereby  certified  that  this  bond  is  one  of  the  series  of  bonds  mentioned  in 
the  mortgage  or  deed  of  trust  within  referred  to. 

(Name  of  Trust  Co.) 

;  Tnu 
By 

,  Vice-President. 

And  Whereas  each  of  said  bonds  has  annexed  to  it  one  hundred  coupons  repre- 
senting the  several  semi-annual  instalments  of  interest  to  become  due  thereon,  as 
hereinbefore  set  forth,  all  of  which  are  of  similar  tenor  except  as  to  numbers  and 
dates  of  payment,  and  are  each  for  in  gold  coin  of  the  United  States  ; 

And  Whereas  the  said  Company,  being  authorized  by  the  laws  of  the  State  of 
to  borrow  money  for  the  purposes  aforesaid,  and,  as  security  therefor, 
to  mortgage,  pledge,  and  convey  all  and  singular  its  properties  and  effects  herein- 
after described  to  secure  the  payment  of  the  same,  and  under  and  pursuant  to  the 
authority  conferred  by  said  laws,  and  of  the  stockholders  and  directors  aforesaid,  in 
order  to  provide  funds  for  the  purposes  aforesaid,  and  to  secure  the  payment  of  all 
and  singular  the  said  bonds  issued  or  to  be  issued  under  and  pursuant  to  the  terms 
of  this  instrument,  together  with  the  interest  thereon,  has  determined  to  and  does 
make,  execute,  and  deliver  this  its  deed  of  trust  in  manner  and  form  as  herein  stated  : 

Now,  therefore,  This  Indenture  Further  Witnesseth,  that  the  said  Company,  in 
consideration  of  the  premises,  and  of  dollar,  lawful  money  of  the  United 

States,  to  it  paid  by  the  said  Trustee  at  or  before  the  ensealing  or  delivery  of  these 
presents,  the  receipt  whereof  is  hereby  acknowledged,  in  order  to  secure  the  due 
and  punctual  payment  of  the  principal  and  interest  of  the  bonds  to  be  issued  by 
it  as  herein  provided,  and  outstanding  at  any  time  hereafter,  and  the  faithful 
performance  of  the  covenants  herein  contained,  hath  granted,  bargained,  sold, 
alienated,  transferred,  assigned,  conveyed,  and  confirmed,  and  by  these  presents 
doth  grant,  bargain,  sell,  alienate,  transfer,  assign,  convey,  and  confirm  unto  said 
Trustee,  and  to  its  successor  or  successors  in  trust  herein,  all  the  right,  title,  and 
interest,  claim,  and  demand,  whatsoever,  which  the  said  Company  now  has  or  is 
entitled  to,  or  which  it  may  at  any  time  hereafter  acquire  or  become  entitled  to,  in 
and  to  the  following  described  real  estate,  premises,  and  property,  to  wit  : 

All  and  singular  the  several  lots,  tracts,  pieces,  and  parcels  of  mining  and  other 
lands  of  the  Company  situated  in  the  State  of  ,  as  follows,  to  wit : 

Together  with  the  appurtenances,  mines,  and  mining  rights  (hereunto  belong- 
ing or  in  any  wise  appertaining;  all  houses,  buildings,  structures,  and  fixtures 
erected,  or  to  be  erected  upon,  and  in  any  way  connected  with,  any  of  the  afore- 
mentioned lands  and  real  estate;  including  all  iron,  coal,  and  other  mines j  and 
mining  property,  machinery,  and  fixtures;  all  the  coke  ovens,  furnaces,  foundries, 
mills,  machine  shops,  steel  plants,  and  manufactories  of  every  kind,  name,  and 
nature,  whether  the  same  are  now  constructed,  in  operation,  or  shall  be  hereafter 
constructed  or  operated  upon  said  premises,  or  any  part  thereof,  including  all  stock 
in  trade,  tools,  equipment,  machinery,  material,  and  property  of  whatever  kind  or 

855 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

nature,  'whether  affixed  to  the  freehold  or  movable,  and  owned  by  the  said  company 
at  the  time  of  the  execution  of  these  presents,  or  at  any  time  hereafter,  appurtenant 
to  any  such  properties,  together,  also,  with  all  the  property,  rights,  title,  and  interest 
which  the  said  Company  now  has  in  and  to  the  conduit  pipes,  pumps,  and  ma- 
chinery used  for  carrying  and  conveying  water  for  manufacturing  purposes,  or  to 
its  factories,  whether  the  same  be  on  the  lands  aforesaid  or  on  other  lands,  and  all 
titles,  rights,  and  easements  connected  therewith,  together  with  all  renewals,  re- 
placements, repairs,  additions,  betterments,  developments,  and  improvements  now 
made,  or  which  shall  at  any  time  hereafter  be  made  upon  or  to  any  of  the  said  trust 
properties,  together  with  all  franchises  of  the  said  Company  of  every  nature  relating 
thereto,  including  all  its  mills,  water-powers,  ditches,  canals,  and  the  reversion  and 
reversions,  remainder  and  remainders,  revenues,  incomes,  rents,  issued  and  profits 
thereof,  and  all  the  estate,  right,  title,  and  interest,  property,  possession,  claim,  and 
demand  whatsoever,  as  well  in  law  as  in  equity,  present  aud  future,  of  the  said 
Company  of,  in,  and  to  all  and  singular  the  property  and  effects  hereinbefore  de- 
scribed, and  every  part  of  the  same,  and  every  parcel  thereof,  with  the  appurte- 
nances ;  also,  all  revenues,  benefits,  advantages,  and  profits  to  the  said  Company  at 
any  time  accruing  from  or  out  of  the  same,  or  the  business  and  operations  thereof 
and  connected  with  said  properties. 

To  have  and  to  hold  the  said  properties,  the  same  being  herein  designated 
as  the  "  trust  properties ; "  subject,  however,  as  to  so  much  of  said  trust  properties 
as  is  embraced  in  the  trust  deeds  executed  by  the  said  and  said  , 

and   those   executed  upon  the    lands  of  the  ,   respectively,   as   afore- 

said, to  the  liens  thereof,  respectively,  and  subject  also  to  all  valid  and  existing  rail- 
road and  ditch  rights  of  way,  and  other  lawful  public  easements,  unto  the  said 
Trustee,  its  successor  or  successors,  to  its  and  their  only  proper  use,  benefit,  aud 
behoof  forever. 

In  Trust,  nevertheless,  for  the  equal  pro  rata  benefit  and  security  of  all 
persons  and  parties,  corporate  bodies  and  partnership  firms  who  may  hold  any  of 
the  bonds  issued  hereunder,  in  conformity  with  the  provisions  herein  contained, 
and  at  any  time  hereafter  outstanding,  without  any  discrimination,  preference,  or 
priority  of  any  one  bond  over  another  by  reason  of  priority  in  time  of  its  actual 
issue  or  negotiation,  or  otherwise,  with  all  the  powers  and  upon  the  terms  and 
conditions,  and  upon  the  trusts  and  for  the  purposes  hereinafter  reserved,  created, 
declared,  expressed,  and  contained,  as  follows  : 

Article  First.  —  The  said  $  of  bonds,  in  the  form  hereinbefore 

specified  to  be  issued  and  intended  to  be  secured  by  these  presents,  and  hereinafter 
designated  as  "  general  mortgage  bonds,"  shall  be  disposed  of  in  the  following 
manner : 

I.  bonds,  being  those  numbered  from  one  to  twelve  hundred,  both 
inclusive,  shall  be  forthwith  certified  by  said  Trustee  and  delivered  to  the  President 
of  said  Company,  to  be  by  it  sold  and  the  proceeds  used  as  its  Board  of  Directors 
shall  deem  proper  in  the  transaction  of  its  business  as  aforesaid. 

II.  The  remaining  bonds,  being  those  numbered  from  twelve  hun- 
dred and  one  to  six  thousand,  both  inclusive,  or  out  of  the  proceeds  thereof,  a  sum 
not  exceeding  ,  shall  be  reserved  and  deposited  with  said  Trustee  for 
the  protection  of  the  purchasers  of  bonds  issued  hereunder  and  for  the  purpose  of 
enabling  said  Company  to  withdraw  by  exchange  or  pay  the  bonds  heretofore 
issued  by  the  ,  and  those  heretofore  issued  by  the  ,  and  the 
said   secured  indebtedness    of  the    .                  ,  amounting  in  the   aggregate  _  to 

(exclusive  of  interest  or  deduction  on  account  of  payments  to  sinking 
funds  heretofore  made),  as  hereinafter  provided,  which  bonds  and  indebtedness  are 
hereinafter  designated  and  referred  to  as  "  prior  bonds  "  secured  by  the  several 
deeds  of  trust  hereinbefore  in  that  regard  respectively  referred  to. 

III.  No  interest  shall  be  or  become  payable  upon  any  of  the  said  forty-eight 
hundred  general  mortgage  bonds  as  long  as  they  shall  remain  in  the  possession  of 
the  Trustee,  unissued,  and  when  they  shall  have  been  authenticated  by  the  certificate 
of  the  Trustee,  and  when  and  as  they  shall  be  issued,  and  delivered  to  owners  or 
holders,  all  coupons  thereon  which  shall  have  matured  prior  to  the  date  of  such 
issue  and  delivery  shall  be  detached  and  cancelled. 

856 


FORMS  AND   PRECEDENTS. 

Article  Second.  —  I.     Whenever  the  said  Company  sliall  deliver  and  hand 
over  to  the  said  Trustee  prior  bonds  of  any  or  either  of  the  issues  aforesaid,  the 
said  Trustee  shall,  ou  receiving  the  same,  deliver  to  said  Company  (or  to  Mich 
person  or  persons  as  may  be  designated  by  resolution  of  the  Board  of  Directors  of 
the  Company)  general   mortgage   bouds  in  its   hands,  duly  authenticated   In    its 
certificate,  to  an  amount  equal  to  the  amount  of  principal  of  such  prior  bonds 
delivered  to  it  by  or  for  the  Company,  or  the  said  Trustee  may  from  tune  to  time 
countersign,  issue,  and  deliver  to  said  Company  such   of  said  general  mortfi 
bonds  as  may  be  in  its  hands  at  the  time,  either  all  at  one  time,  or  from  tin 
time,  in  such  amounts  as  maybe  required  by  the  Company  on  receiving  the  par 
value  thereof  in  gold  coin  of  or  equal  to  the  standard  in  such  prior  bonds  mentioned, 
the  sums  so  received  by  said  Trustee  to  be  returned  to  said  Company  on 
entation  by  it  to  said  Trustee  of  prior  bonds,  dollar  for  dollar,  if  the  same  be  so 
presented  before  or  at  the  maturity  of  said  prior  bonds :   provided,  thai  the  Trustee 
may  loan  out  such  moneys  with  the  consent  of  the  Company,  on  call,  at 
of  interest  as  it  may  deem  advantageous,  on  such  security  as  it  may  (hem  sufficient, 
or  on  prior  bonds  aforesaid,  or  on  bonds  secured  hereby  aud  issued  hereunder,  at 
market  value,  not  above  par. 

II.  "Whenever  the  said  Company  shall  deliver  to  said  Trustee  a  certificate  exe- 
cuted by  the  Trustee  of  and  under  the  mortgage  hereinbefore  referred  to, 
to  the  effect  that  certain  of  the  bonds  secured  thereby  have  been  cancelled  in  accord- 
ance with  the  sinking-fund  provisions  of  the  mortgage  or  deed  of  trust  securing  the 
same,  which  certificate  shall  specify  the  date  of  cancellation  and  the  numbers  of  the 
bonds  so  cancelled,  the  Trustee  hereunder  shall,  on  receiving  the  same  from  time  to 
time,  deliver  to  said  Company  general  mortgage  bonds  in  its  hands,  duly  authenti- 
cated by  its  certificate,  to  an  amount  equal  to  the  amount  of  principal  of 'such  prior 
bonds  so  shown  to  have  been  cancelled. 

III.  Whenever  the  said  Company  shall  deliver  to  the  said  Trustee  a  certificate 
executed  by  the  Trustee  of  the  mortgage  hereinbefore  referred  to,  to  the 
effect  that  certain  moneys  have  been  paid  into  its  hands  or  collected  by  it  for  the 
purposes  of  and  in  accordance  with  the  sinking-fund  provisions  of  the  mortgag 
deed  of  trust  securing  the  same,  which  certificate  shall  in  the  first  instance  specify 
the  amount  of  such  moneys  so  received  by  the  said  last-mentioned  Trustee  up  i 
including  the  date  of  such  certificate,  aud  each  and  any  subsequent  certificate  speci- 
fying the  amount  of  such  moneys  so  received,  and  the  date  on  which  they  were  re- 
ceived, the  Trustee  shall,  from  time  to  time,  on  presentation  of  such  certificate  or 
certificates,  in  amounts  of  or  multiples  thereof,  deliver  to  said  Company 
(or  to  such  person  or  persons  as  may  be  designated  in  an  order  of  the  said  Com- 
pany) general  mortgage  bonds  in  its  hands,  authenticated  by  its  certificate,  to  an 
amount  equal  to  the  amount  in  said  certificate  named ;  provided  that  nothing  herein 

lined  sliall  authorize  the  Trustee  to  deliver  general  mortgage  bonds  in  exchange 
for  any  bonds  which  may  have   been   purchased  by  the  Trustee  of  and  under  said 
mortgage  for  the  benefit  of  the  sinking  fund  under  said  mortgage,  and 
which  may  be  still  held  by  said  Trustee. 

IV.  Whenever  said  Company  shall  have  paid  dollar  indebtedness  of 
the  ,  and  shall  deliver  to  the  Trustee  certified  copies  of  the  records  of  the 
proper  counties  showing  the  release  of  the  trust  deeds. securing  the  same,  the  Trus- 
tee shall  thereupon  deliver  to  the  Company  general  mortgage  bonds,  authenticated 
by  its  certificate,  to  the  amount  of                   dollars  of  principal. 

Article  Third.  —  Upon  maturity  of  such  prior  bonds  respectively,  said  Trns- 

-iiall  apply  any  moneys  that  may  have  been  received  by  it,  and  remain  in  its 
hand-  as  aforesaid,  to  the  payment  of  principal  of  such  prior  bonds  as  may  at  the 
time  be  outstanding. 

All  prior  bonds  which  may  be  received  bj  said  Trustee  shall  be  cancelled  forth- 
with, and  delivered  so  cancelled  to  the  Trustee  of  the  mortgage  which  was  given  to 
secure  the  same. 

Article  Fourth.  —  Until  default  shall  be  made  by  the  said  Company,  il 

cessors  or  assigns,  in  the  due  and  punctual  observance  and  performance  of  ah\  "lie 

or  more  of  the  covenants  and  agreements  herein  contained  on  the  pari  and  bi  half  of 
the  said  Company  to  be  kept  and  performed  (and  possession  taken  bj  said  Trustee 

857 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

by  virtue  hereof),  the  said  Company,  its  successors  and  assigns,  shall  be  suffered 
aiid  permittted  to  remain  in  the  actual  possession  of  all  and  singular  the  trust  prop- 
erties hereinbefore  mentioned  and  described,  and  of  the  whole  thereof,  to  use  and 
employ  the  same  and  every  part  thereof,  to  sell  in  the  course  of  trade  the  personal 
property  and  products  so  intended  for  sale,  and  to  sell  any  machinery,  equipment, 
tools  or  other  personal  property  covered  by  these  presents,  which  shall  either  have 
been  replaced  by  other  similar  articles  of  equal  value  or  which  shall  cease  to  be 
necessary  for  the  efficient  operation  of  the  Company's  business ;  and  to  exercise  and 
enjoy  all  the  rights  and  franchises  appertaining  thereto,  and  to  collect,  receive,  and 
have  the  income,  rents,  revenues,  issues,  and  profits  thereof,  and  use  the  same  in 
auy  manner  which  will  not  impair  the  lien  created  by  these  presents ;  and  the  min- 
ing of  coal  or  other  minerals  or  cutting  timber  from  said  lands  shall  not  be  deemed 
such  impairment. 

Article  Flfth.  —  The  Company  may  at  any  time  in  its  own  discretion  contract 
for  the  sale  of,  and  sell  and  convey  any  portion  of  the  surface  of  the  lands  hereinbe- 
fore described,  and  not  required  by  it  iu  its  operations,  upon  the  payment  to  said 
Trustee  of  the  sum  of  per  acre  for  the  land  so  sold  and  conveyed ;  reserv- 

ing, however,  in  all  such  sales  and  conveyances,  the  right  to  said  Company,  its  suc- 
cessors and  assigns,  to  extract  and  dispose  of  all  coal  or  other  minerals  beneath  such 
surface  without  let  or  hindrance  from  or  responsibility  to  the  purchasers  of  such 
surface  on  account  of  the  operations  carried  on  beneath  the  surface  for  the  purpose 
of  extracting  such  coal  or  other  minerals ;  and  upon  the  receipt  by  the  Trustee  of 
said  per  acre,  and  of  an  affidavit  by  the  President  or  General  Manager 

of  the  Company  that  the  portion  of  the  surface  sought  to  be  released  is  not  required 
by  it  in  its  operations,  it  shall  execute  a  release  to  the  purchaser  of  all  the  interest 
so  conveyed,  which  shall  operate  as  a  release  of  the  same  from  the  lien  of  these 
presents.  The  said  affidavit  of  the  President  or  General  Manager  of  the  Company 
shall  be  sufficient  and  conclusive  evidence  to  the  Trustee  of  the  truth  of  the  facts 
stated  therein.  The  said  Company  may  also,  with  or  without  compensation  there- 
for, in  its  discretion,  grant  over,  through,  or  upon  the  lands  covered  by  these  pres- 
ents, free  from  the  lien  thereof,  rights  of  way,  of  reasonable  extent,  for  such  railways, 
ditches,  highways,  tunnels,  or  other  improvements  as  may  be  either  advantageous 
or  not  injurious  to  its  own  business  operations ;  subject,  however,  to  the  right  of 
said  Company  to  extract  all  coal  and  minerals  as  aforesaid,  when  the  same  can  be 
done  without  injury  to  such  rights  of  way. 

All  moneys  received  by  the  Trustee  under  this  article  shall  be  held  and  applied 
by  it  to  and  for  the  purposes  of  the  sinking  fund,  hereinafter  created ;  provided,  that 
if  at  the  time  of  the  receipt  thereof  any  prior  bonds  which  are  a  lien  on  the  land  so 
sold  should  be  outstanding,  then  in  case  any  such  money  shall  be  received  by  the 
Trustee  from  or  on  account  of  any  parcel  of  land  now  subject  to  the  trust  deeds  se- 
curing the  prior  bonds,  the  Trustee  shall  turn  over  such  money  to  the  Trustee  or 
Trustees  thereunder  for  the  time  being,  to  be  held  and  disposed  of  by  it  or  them  as 
therein  prescribed. 

Article  Sixth.  —  I.  The  said  Company  shall  and  will  well  and  truly  pay  off 
and  discharge,  or  cause  to  be  paid  off  and  discharged,  each  and  every  tax,  assess- 
ment, or  other  liability  and  governmental  charge  which  may  from  time  to  time 
be  lawfully  levied  or  imposed  by  competent  authority  upon  the  said  trust  prop- 
erties, or  upon  any  part  thereof,  the  hen  whereof  might  or  could  be  held  to 
be  superior  to  the  hen  of  these  presents,  so  that  the  priority  of  these  presents 
shall  at  all  times  be  duly  maintained  and  preserved.  The  Company  shall  keep 
the  said  mines,  mining  property,  coke  ovens,  and  other  establishments,  manufac- 
tories, and  manufacturing  establishments,  hereinbefore  mentioned,  in  good  work- 
ing order  and  condition,  and  shall  and  will  from  time  to  time  make  all  needful  and 
proper  repairs,  renewals,  replacements,  alterations,  additions,  betterments,  develop- 
ments, and  improvements  of  all  and  singular  said  property,  mines,  and  premises,  so 
that  the  business  thereof,  and  of  every  part  thereof,  shall  be  preserved,  developed, 
and  maintained. 

II.  The  Company  shall  well  and  truly  pay,  or  cause  to  be  paid,  the  said  prior 
bonds  and  indebtedness  and  the  interest  thereon  at  maturity,  and  shall^  and  will 
well  and  truly  observe  and  perform  all  the  covenants  and  agreements  in  said  several 

858 


FORMS    AND    PRECEDENTS. 


trust  deeds  securing  said  prior  bouds,  respectively  contained,  in  sncb  maimer  that 
the  rights  of  the  holders  of  general  mortgage  bonds  issued  hereunder,  and  the 
security  afforded  them  bv  these  presents  shall  noi  be  in  any  wise  impaired  or  prej- 
udiced, and  will  not  do  or  suffer  any  matter  or  thing  whatsoever  whereby  the  hen 
of  these  presents  might  or  could  be  diminished  or  impaired;  provided  thai  nothing 
herein  contained  shall  prevent  either  the  substitution  or  exchange  of  general  mort- 
gage bonds  secured  by  these  presents  for  the  prior  bonds  aforesaid  cow  outstanding, 
orthe  payment  of  such  prior  bonds  with  the  proceeds  of  the  sale  or  negotiation  oi 
any  general  mortgage  bonds  secured  hereby,  as  herein  provided,  or  the  release,  by 
the  said  Trustee,  of  any  portion  of  the  said  lands  and  premises  which  may  be  sold 
under  and  according  to  the  stipulations  herein  contained,  or  the  performance  oi  any 
of  the  conditions  of  this  indenture. 

III.  As  between  the  Company  and  the  Trustee,  all  the  machinery,  tools,  and 
other  personal  property  used  and  to  be  used  in  connection  with  the  said  trust  prop- 
erties shall  be  considered  fixtures,  and  be  held  to  be  covered  by  the  lieu  of  these 

^Article  Seventh.  — If  default  shall  be  made  in  the  payment  of  any  semi- 
annual instalment  of  interest  mentioned  in  the  said  general  mortgage  bonds,  accord- 
ing to  the  tenor  or  effect  of  said  bonds,  and  if  such  default  shall  continue  tor  the 
penod  of  six  months,  then  the  Trustee  or  its  successor  or  successors  m  the  in.si, 
mav,  at  its  or  their  option,  and  upon  being  requested  in  writing  by  the  holders  ol  a 
maioritv  in  amount  of  the  said  bonds  then  outstanding,  shall,  declare  the  principal 
of  all  of  the  said  bonds  to  be  immediately  due  and  payable,  and  thereupon  the 
principal  of  all  of  said  bonds  shall  become  due  and  payable  forthwith.  Such  dec- 
laration may  be  made  by  notice  in  writing  to  the  said  Company  or  by  publication 
thereof  once  in  some  daily  newspaper  published  in  the  City  of  New  J  ork.  In  case 
of  any  sale  of  the  mortgaged  premises  pursuant  to  any  decree  of  foreclosure  ami 
sale  based  upon  this  mortgage,  the  principal  of  all  of  the  bonds  secured  hereby 
shall  become  forthwith  due  and  payable  without  any  declaration  to  that  effect  or 
notice  thereof.  ,  f  .., 

In  case  default  shall  ha  made  by  said  Company  in  the  performance  of  any  of  the 
covenants  and  agreements  contained  in  the  several  prior  bonds,  or  in  the  trust 
deeds  securing  the  same,  so  as  to  entitle  the  Trustee  or  Trustees  therein,  or  either 
of  them,  to  exercise  the  power  of  entry  provided  for  therein;  or  in  case  the  said 
Companv  shall,  at  any  time,  make  default  (a)  in  paying  the  principal  or  interest,  or 
.any  part' thereof,  which,  in  and  by  said  general  mortgage  bonds,  it  has  promised  to 
pay  on  any  day  whereon  the  same  shall  be  payable  and  shall  have  been  demanded ; 
OT  (b)  in  paving  all  or  any  part  of  the  taxes  and  assessments  which  shall  at  any 
time  be  lawfully  imposed  upon  the  properties  covered,  or  intended  to  be  covered, 
by  these  presents,  as  each  shall  respectively  fall  due;  or  (c)  in  setting  apart  and 
applying,  at  the  times  and  in  the  manner  hereinafter  directed,  the  sinking  fund 
hereinafter  provided  for,  or  some  part  thereof;  and  in  case  one  or  more  persons 
holding  a  majority  of  said  general  mortgage  bonds,  as  to  which  such  defaults  or 
one  or  more  of  them,  exist,  shall  have  made  a  demand  upon  said  trustee  in  writing 
to  that  effect,  then,  upon  the  continuance  of  such  defaults,  or  one  or  more  ot  them, 
for  six  months,  it  shall  be  lawful  for  said  Trustee: 

I.  To  enter  into  and  upon  all  and  singular  the  trust  properties  covered,  or  in- 
tended to  be  covered,  bv  these  presents,  and  to  take  the  same,  and  each  and  all  ol 
them,  into  its  own  possession,  and  to  control,  manage,  and  operate  the  same,  by 
itself,  or  by  its  agents,  attorneys,  and  employees,  as  it  shall  think  proper,  m  hke 
manner  as  the  said  Company  theretofore  had  or  mighl  have  done  ;  and  to  collect, 
use,  and  dispose  of  the  products,  earnings,  rents,  profits,  revenues,  and  income 
thereof  (first)  in  and  toward  paying  the  expense  of  operating  said  properties,  and 
of  keeping  the  same  in  good  and  efficient  working  condition  and  repair,  including  a 
•reasonable  compensation  to  the  said  Trustee  for  managing  and  operating  the  same, 
and  also  the  fee's  of  counsel  employed  by  it  in  that  behall ;  and,  ,  any  sui?lus  shaU 
remain,  then  (second)  to  use  such  surplus  in  making  good  the  defaull  oi  defaults 
which  mav  have  so  occurred,  whether  before  or  after  its  takuig  possession  as  afore- 
said,  to  (or  for  the  benefit  of)  the  parties  who  may  has.,  suffered  thereby,  ana. 
upon  and  after  having  so  made  good  all  SUCH  defaults,  ,n  trust  to  restore  .he  s,id 

N.V.I 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

trust  properties  to  the  said  Company  in  like  manner  as  it  had  held  the  same  before 
such  defaults  had  occurred  ;  or 

II.  In  case  any  one  or  more  of  the  defaults  in  this  article  mentioned  shall  have 
occurred,  and  continued  for  more  than  six  months,  and  upon  a  like  written  demand 
upon  said  Trustee  to  that  effect,  made  by  one  or  more  persons  holding  a  majority 
of  said  general  mortgage  bonds  as  to  which  such  defaults,  or  any  one  or  more  of 
them,  shall  exist,  then  in  trust  to  sell,  or  cause  to  be  sold,  the  said  trust  prop- 
erties, or  so  much  thereof  as  shall  be  necessary  for  that  purpose,  at  public  auction,  at 

,  ,  after  having  given  notice  of  the  time  and  place  and  terms 

of  sale,  by  publishing  the  same  once  in  each  week  for  nine  consecutive  weeks  im- 
mediately preceding  such  sale,  in  one  newspaper  published  in  the  City  of  New  York 
and  in  one   newspaper   published  in  the  City  of  ,  ;  and 

upon  such  sale  or  sales  to  execute  and  deliver  to  the  purchase  or  purchasers  of 
the  property  sold,  both  in  its  own  name  and  in  the  name  of  the  Company,  and  as 
its  attorney  in  fact,  irrevocable  (hereby  duly  appointed  and  authorized),  such  good 
aud  sufficient  deeds  of  conveyance,  or  other  instruments  of  assignment  or  transfer, 
as  may  be  necessary  or  convenient;  to  vest  in  the  purchaser  or  purchasers  all  the 
estate,  right,  title,  and  interest,  both  of  the  said  Trustee  and  of  the  said  Company, 
of,  in,  and  to  the  property  so  purchased ;  and  in  trust,  to  receive,  collect,  use,  and 
apply  the  net  proceeds  of  such  sales,  after  deducting  therefrom  all  expenses  incurred 
in  making  such  sales,  including  a  reasonable  compensation  to  the  said  Trustee 
for  administering  this  trust,  and  also  the  fees  of  counsel  employed  by  it  in  that  be- 
half, in  and  towards  the  payment  in  full  (or  if  not  in  full,  then  pro  rata),  of  the  in- 
terest first,  and  then  of  the  principal,  due  upon  any  and  all  the  said  general 
mortgage  bonds  then  outstanding  and  unpaid,  in  such  manner  that,  after  such  pay- 
ments shall  have  been  made,  the  amounts  remaining  unpaid  upon  each  bond, 
whether  of  principal  or  interest,  shall  be  equal  one  with  another. 

III.  Nothing  in  this  article  contained  shall  be  construed  as  to  prevent  or 
hinder  the  said  Trustee  from  applying  to  any  Court  of  competent  jurisdiction, 
after  any  default  in  the  performance  of  any  of  the  terms  and  provisions  hereof,  for 
a  judicial  foreclosure  of  these  presents,  or  for  any  relief,  provisional,  interlocutory, 
or  final,  to  which  it  may  be  entitled  in  any  proceeding,  either  at  law  or  in  equity, 
to  enforce  or  secure  any  rights  herein  conferred.  I3ut  no  bondholder  or  bond- 
holders shall  take,  begin,  institute,  or  prosecute,  or  have  the  right  to  require  the 
Trustee  to  take,  begin,  institute,  or  prosecute,  any  suit  or  suits,  proceeding  or  pro- 
ceedings, to  enforce  the  provisions  of  or  to  foreclose  this  mortgage,  until  after  the 
expiration  of  the  period  of  six  months  from  the  date  of  any  such  default.  And  no 
bondholder  or  bondholders  shall,  at  any  time,  take,  begin,  institute,  or  prosecute 
auy  suit  or  suits,  proceeding  or  proceedings,  until  after  he  or  they  shall  have 
requested  the  Trustee  in  writing  to  take,  begiu,  or  institute  such  suit  or  suits, 
preceeding  or  proceedings,  and  offered  proper  indemnity,  as  hereinafter  provided, 
and  the  Trustee  shall  have  thereupon  refused  to  comply  with  such  request.  The 
Trustee  shall  have  the  right  to  require  the  person  or  persons  presenting  any  such 
request,  or  auy  request  or  demand  mentioned  or  provided  for  in  this  mortgage,  to 
furnish  proof,  by  affidavit  or  affidavits  of  the  signers,  as  to  the  ownership  of  the 
bonds  represented  by  him  or  them,  and  of  his  or  their  authority  to  subscribe  such 
request,  in  case  the  same  shall  be  subscribed  by  any  other  persons  than  the  owner ; 
and,  if  such  proof  be  so  required,  the  said  request  shall  be  without  effect  until 
such  proof  shall  have  been  furnished  to  the  Trustee. 

IV.  Any  of  the  general  mortgage  bonds  or  prior  bonds  and  overdue  coupons 
thereon  shall  be  received  in  payment  of  the  purchase  money  of  any  property  sold  as 
aforesaid  as  equivalent  to  so  much  cash  of  the  said  pnrchase  money  as  would  be 
distributable  and  payable  thereon  ;  provided  that,  in  case  of  auy  such  sale  or  sales 
under  and  by  virtue  of  the  power  conferred  by  this  instrument,  the  Trustee  shall 
sell  the  trust  properties  in  such  order  as  may  be  in  writing  directed  by  said  Com- 
pany, provided  reasonable  notice  thereof  shall  be  given  to  the  Trustee. 

Article  Eighth.  —  I.  For  the  purpose  of  providing  against  any  depreciation 
of  the  security  reserved  herein  by  reason  of  the  mining  out  of  coal  and  iron  from 
the  aforesaid  trust  properties,  the  Company  shall  set  aside  and  reserve  from  and 
after  the  first  day  of  ,  and  while  the  lien  of  these  presents  con- 

860 


FORMS   AXD   PRECEDENTS. 

tinues,  the  sum  of  two  cents  per  ton  on  each  ton  of  coal,  and  five  cents  per  ton  on- 
each  ton  of  iron  ore,  mined  from  any  of  the  lands  now  or  lien  after  covered  l>v  this 
mortgage,  such  reservation  to  be  tor  the  purposes  of  a  sinking  hind  on  the  condition 
hereinafter  set  forth. 

II.  On  or  before  the  first  day  of  in  each   year,  commencing  with 

, -while  the  lieu  of  these  presents  shall  continue,  the  Companj  shall 
account  to  the  Trustee  for  all  moneys  reserved  as  aforesaid  for  the  purposes  of  a 
sinking  fund.  The  Company  shall  have  the  right  to  invest  the  moneys  so  reserved 
by  it  in  the  purchase  of  coal  aud  iron  lands  which  may  be  necessary  or  desirable  for 
the  use  of  the  Company,  at  the  fair  value  thereof.     On  or  before  the  first   daj  of 

iu  each  year  the  Company  shall  deliver  to  the  Trustee  a  supplemental 
mortgage  or  deed  of  trust  which  shall  vest  the  title  to  the  lands  so  purchased,  if 
any,  in  the  said  Trustee,  subject  to  all  the  trusts,  powers,  conditions,  and  provisions 
herein  contained,  and  shall  pay  over  to  the  said  Trustee  the  reservations  of  said 
sinking  fund  which  shall  not  have  been  invested  iu  coal  or  iron  lauds  as  above  pro- 
vided; provided,  that  such  delivery  shall  be  accompanied  by  the  affidavil  of  the 
President,  General  Manager,  or  one  of  the  Vice-Presidents  of  the  Company  showing 
the  entire  amount  of  moneys  reserved  during  the  preceding  year  and  the  amount 
invested  in  the  purchase  of  lands,  and  setting  forth  that  the' lauds  purchased  on 
account  of  said  sinking  fund  were  necessary  or  desirable  for  the  use  of  the  Com- 
pany ;  that  the  price  paid  for  the  same  was  the  fair  cash  value  thereof,  and  thai  said 
property  had  been  purchased  for  the  Company  in  good  faith  for  the  consideration 
expressed ;  and  shall  be  further  accompanied  by  a  certified  copy  of  resolution  adi 
by  the  Board  of  Directors  of  the  Com pany  authorizing  or  approving  the  purchase  of 
the  aforesaid  coal  and  iron  lands  and  the  execution  and  delivery  of  the  supplemental 
mortgage  above  provided  for,  which  affidavit  and  certificate  shall  be  conclusive 
evidence  to  the  Trustee  of  the  truth  of  the  statements  therein  contained;  provided, 
further,  that  the  owners  of  a  majority  in  amount  of  the  outstanding  bonds  shall  have 
the  right  at  any  time  to  require  all  sinking-fund  reservations  thereafter  accruing 
to  be  paid  in  cash;  and  whenever  one  or  more  persons  holding  a  majority  of  said 
general  mortgage  bonds  shall  have  made  a  demand  upon  said  Trustee  in  writing  to 
that  effect,  the  entire  sinking-fund  reservation  shall  be  payable  in  cash  from  that. 
time  until  the  maturing  of  the  said  general  mortgage  bouds" 

III.  Immediately  upon  the  receipt  of  moneys  for  the  sinking  fund,  or  from  sales 
of  land,  as  provided  in  Article  Five,  the  Trustee  shall  proceed  to  invest  the  same  in 
the  outstanding  general  mortgage  bonds  secured  by  this  deed  of  trust  by  purchas- 
ing them  in  the  open  market  at  the  best  price  for  which  they  can  be  obtained  ;  in 
no  event,  however,  paying  more  than  par  aud  live  per  centum  premium  with  accrued 
interest. 

IV.  In  case  the  Trustee  shall  not  be  able  to  purchase  the  bonds  at  the  price 
herein  limited,  then,  and  in  that  event,  the  Trustee  shall,  on  or  before  the  first  day 
of  ,  in  each  year,  draw  by  lot  from  the  entire  number  of  bonds  which 
shall  have  been  outstanding  on  the  first,  day  of  previous  thereto  such  a 
number  of  bonds  for  redemption  as  it  shall  have  funds  to  redeem  at  par  aud  li\< 
cent  premium,  and  the  holders  of  said  bonds  so  drawn  shall  be  forthwith  notified 
by  advertisement  published  daily  (Sundays  excepted)  for  two  weeks  iu  two  news- 
papers in  the  City  of  New  York,  and  in  one  newspaper  in  , 

that  their  bonds  will  be  redeemed  at  live  percent  above  par  with  accrued  interest 
on  tlic  first  day  of  then  next  ensuing,  and  such   bonds  shall   thereupon 

cease  to  draw  interest  from  the  date  fixed  for  redemption,  and  shall  be  redeemed 
by  the  said  Trustee  on  and  after  that,  day,  aud  at  the  price  aforesaid,  out  of  the 
moneys  placed  iu  its  hands  on  acci  lid  sinking  fund. 

V.  All  bonds  that,  shall,  from  lime  to  lime,  lie  purchased   or  redeemed    through 

the  sinking  fund  herein  created  shall  be  destroyed  forthwith  by  the  said  Trustee  in 

the  presence  of  some  officer  or  other  person  to  be  designated  by  the  Company,  and 
said  Trustee  shall  certify  to  said  Company,  in   writing,  the  fact  of  such   destruction 

and  the  numbers  of  the  bonds  so  destroyed. 

Aetk  i.k  Ninth.  —  I.    In    case  said  Trustee  shall  be  required  by  the  holdi 
bonds  secured  by  these  presents  ho  enforce  any  of  their  rights  berebj     ecured,  if 
shall  not  be  required  to  incur  any  expense  or  liability  in  connection  therewith  until 

861 


INCORPORATION  AND   ORGANIZATION   OF  CORPORATIONS. 

it  shall  be  satisfactorily  indemnified  by  the  parties  requiring  such  action  to  be- 
taken. 

II.  All  powers  in  these  presents  conferred  upon  the  said  Trustee  (except  as 
otherwise  herein  specifically  provided)  shall  be  deemed  discretionary,  and  it  shall 
incur  no  liability  in  exercising  any  such  powers,  provided  it  acts  in  good  faith  in 
exercising  the  same. 

III.  The  Trustee  shall  not  be  answerable  for  the  default  or  misconduct  of  any 
attorney,  clerk,  or  agent  appointed  by  it  in  pursuance  hereof,  if  such  attorney,  clerk, 
or  agent  be  selected  with  reasonable  care,  nor  for  any  error  or  mistake  made  by  it 
in  good  faith,  but  only  for  gross  negligence  or  willful  default  in  the  discharge  of  its 
duties  as  such  Trustee.  The  Trustee  shall  not  be  individually  liable  for  any  debts 
contracted  or  any  liabilities  incurred  by  it,  nor  for  any  damage  to  persons  or  property 
injured,  nor  for  salaries  or  non-fulfilments  of  contracts,  during  any  period  in  which 
the  Trustee  shall  manage  the  trust  property  upon  entry  as  aforesaid,  but  all  such 
debts  and  liabilities  shall  be  and  constitute  a  first  charge  upon  the  trust  funds  and 
properties. 

The  Trustees  shall  be  entitled  to  such  just  and  reasonable  compensation  for  all 
services  which  may  hereafter  be  rendered  by  it  in  this  trust  as  may  be  agreed  upon 
between  it  and  the  Company,  or,  in  the  absence  of  such  agreement,  as  may  be  fixed 
by  any  court  of  competent  jurisdiction;  and  the  services  of  such  Trustee  shall  be 
deemed  to  be  continuous  during  the  entire  period  while  these  presents  shall  remain 
in  force  or  effect,  and  it  remains  such  Trustee ;  and  said  Trustee  shall  be  paid  by 
the  Company,  or  out  of  the  income  of  the  trust  properties  from  time  to  time  as  re- 
quired, and  until  paid  shall  be  secured  hereby.  The  said  Trustee  shall  be  entitled 
to  be  fully  reimbursed  in  respect  thereof  before  any  distribution  is  made  for  prin- 
cipal or  for  interest  upon  any  bonds  or  coupons  secured  hereby. 

Article  Tenth.  — The  said  Trustee,  or  any  Trustee  or  Trustees  hereafter  ap- 
pointed, may  resign  and  be  discharged  of  the  trust  created  by  this  indenture,  by 
giving  notice  in  writing  to  the  Company,  and  to  the  general  mortgage  bondholders, 
by  publication  thereof,  at  least  six  times  a  week  for  four  successive  weeks,  in  a  news- 
paper published  in  the  City  of  New  York,  New  York,  and  in  a  newspaper  published 
in  the  City  of  ,  ,  such  resignation  not  to  take  effect  until  at 

least  thirty  days  after  the  last  publication  of  such  notice  ;  and  in  case  of  the  disso- 
lution of  said  Trustee,  or  of  its  resignation,  incapacity  to  act,  or  removal  as  Trustee 
hereunder,  it  shall  be  the  duty  of  the  Company,  or  of  its  President,  or  Secretary,  to 
call  a  meeting  of  the  holders  of  the  general  mortgage  bonds  secured,  or  intended  to 
be  secured  hereby,  by  publishing  a  notice  at  least  six  times  each  week,  for  at  least 
four  weeks,  in  a  newspaper  published  in  the  City  of  New  York,  New  York,  and  in 
a  newspaper  published  in  the  City  of  ,  ,  such  meeting  of  hold- 

ers of  said  bonds  to  be  held  in  the  City  of  New  York,  not  less  than  ten  days  after 
the  last  publication  of  each  or  either  of  said  notices,  for  the  purpose  of  filling  the 
place  of  said  Trustee ;  and  a  majority  in  interest  of  the  holders  of  said  bonds,  so 
attending  such  meeting,  or  legally  represented  thereat,  shall  be  competent  to  elect 
a  new  Trustee,  and  shall  at  such  meeting  proceed  to  elect  a  suitable  person  or  per- 
sons or  corporation  to  act  as  Trustee  or  Trustees  to  fill  such  vacancy,  and  the  per- 
son or  persons  or  corporation  so  elected  shall  immediately  upon  such  election,  and 
upon  filing  with  the  Company  an  acceptance  in  writing  of  such  trust,  become  vested 
with  all  the  estate,  trust,  rights,  power,  and  duties  of  the  said  Trustee,  as  prescribed 
herein ;  and  thereupon  all  the  powers  hereunder,  and  all  the  estate,  right,  title,  and 
interest  in  the  said  trust  properties  of  the  Trustee  who  shall  have  become  incapable, 
or  have  resigned,  or  have  been  removed,  shall  wholly  cease  and  determine;  but, 
nevertheless,  the  Trustee  or  Trustees  resigning,  or  being  removed  as  aforesaid,  shall, 
upon  request  in  writing  of  the  new  Trustee  or  Trustees,  execute  and  deliver  to  it, 
him  or  them  all  such  conveyances  and  other  instruments  as  shall  be  fit  and  expedi- 
ent, for  the  purpose  of  assuring  to  such  new  Trustee  or  Trustees  the  legal  estate  in 
the  trust  properties  ;  provided  that  the  expense  of  the  preparation  and  execution  of 
such  new  instruments  shall  be  defrayed  by  the  Company,  or  other  parties  in  in- 
terest ;  and  provided,  further,  that  nothing  herein  contained  shall  be  so  construed 
as  to  deprive  any  Trustee,  or  his  or  its  representatives,  of  any  right  to  such  com- 
pensation or  reimbursement  as  such  Trustee  is  or  may  be  justly  entitled  to,  for  any 

862 


FORMS    AND    PRECEDENTS. 

service  actually  rendered,  or  expense  incurred  under  this  indenture ;  and  in  case  of 
such  election  of  anew  Trustee  or  Trustees,  as  aforesaid,  the  Company  hereby  cove- 
nants to  make,  execute,  and  deliver  such  other  or  further  instruments,  deeds,  inden- 
tures, or  assurances  as  may  be  necessary  to  enable  the  person  or  persons  or  corpora- 
tion so  elected  to  execute  and  carry  out  the  trusts  hereby  created  and  declared  as 
fully  and  perfectly  iu  all  respects  as  he,  they,  or  it  could  have  executed  and  carried 
out  the  same,  if  originally  made  the  party  of  the  second  part  to  this  indenture; 
and  it  is  hereby  declared  and  agreed,  that  in  case  the  holders  of  said  bonds 
shall  fail  or  omit  to  appoint  a  new  Trustee  or  Trustees,  in  the  manner  aforesaid, 
within  ninety  days  after  the  incapacity  of  any  Trustee  shall  occur,  or  within  nil 
days  after  the  resignation  or  removal  of  any  Trustee,  the  President  of  the  Com- 
pany shall  thereupon  become  such  Trustee,  and  shall  serve  as  such,  and  shall  be 
subject  to  all  the  duties,  and  be  vested  with  all  the  powers  herein  or  hereby 
created,  granted,  and  conferred  upon  the  said  party  of  the  second  part,  until  a 
majority  in  interest  of  the  holders  of  the  outstanding  bonds  shall  elect  a  Trustee 
or  Trustees,  in  the  manner  aforesaid.  It  is  further  expressly  agreed  that  all  cov- 
enants, stipulations,  promises,  and  undertakings  herein  contained,  by  or  on  behalf 
of  the  Company,  shall  bind  aud  be  binding  upon  its  successors  or  assigns,  whether 
so  expressed  or  not. 

Article  Eleventh.  —  I.  These  presents,  and  the  trusts,  conditions,  and  pow- 
ers hereby  imposed  or  granted,  may  be  altered,  curtailed,  enlarged,  or  added  to  in 
any  manner  that  shall  be  agreed  upon  between  the  said  Company  and  the  said 
Trustee,  provided  that  such  alterations,  curtailments,  enlargements,  or  additions 
shall  have  first  been  approved  by  holders  of  two  thirds  in  amount  of  all  the  then 
outstanding  general  mortgage  bonds  secured  by  these  presents,  at  a  meeting  of 
general  mortgage  bondholders  to  be  summoned  by  said  Trustee  at  the  request  of 
the  Board  of  Directors  of  said  Company,  and  upon  a  two  weeks'  written  notice  of 
the  time,  place,  and  purpose  of  said  meeting,  to  be  sent  by  mail  to  all  such  bond- 
holders whose  places  of  residence  can  be  ascertained,  and  by  publication  thereof 
daily  (Sundays  excepted)  for  two  weeks  immediately  previous  to  such  meeting,  in 
two'  newspapers  published  in  the  City  of  New  York,  aud  in  one  newspaper  pub- 
lished in  the  City  of  , 

II.  The  approval  by  the  requisite  numoer  of  bondholders  of  such  alterations, 
curtailments,  enlargements,  or  additions  shall  be  evidenced  by  some  instrument  in 
writing  duly  executed  by  them  under  their  hands  and  seals,  in  person  or  by  at- 
torney duly  authorized,  which  instrument  shall  be  lodged  with  the  said  Trustee  as 
its  authority  for  assenting  thereto. 

III.  The  alterations,  curtailments,  enlargements,  or  additions,  when  so  ap- 
proved, shall  be  embodied  in  an  indenture  under  seal  duly  executed  by  and  between 
the  said  Company  and  the  said  Trustee,  in  such  manner  as  to  entitle  the  same  to  be 
recorded  in  every  recording  office  where  these  presents  shall  have  been,  or  shall  be 
intended  to  be,  recorded.  When  said  indenture  shall  have  been  so  executed  and 
delivered  to  the  said  Trustee,  these  presents  shall  forthwith  be  deemed  to  have  been 
altered,  curtailed,  enlarged,  or  added  to,  in  accordance  therewith,  and  the  Trustee 
shall  cause  said  indenture  to  be  recorded  in  such  recording  offices  as  shall  be  by 
law  required,  to  give  notice  to  all  persons  affected,  or  to  be  affected  thereby,  but  the 
said  Trustee  shall  have  power  to  refuse  to  agree  to  any  such  alterations,  curtail- 
ments,  enlargements,  or  additions,  in  case  it  shall  think  that  the  same  shall  unrea- 
sonably impair  or  prejudice  the  rights  of  the  bondholders  who  do  not  assent 
thereto. 

Article  Twelfth.  —  It  is  hereby  expressly  further  mutually  agreed  t  h.it  when- 
ever and  as  often  as  any  contingency  shall  arise  on  which  the  act  inn  of  a  majority  in 
interest  of  the  holders  of  general  mortgage  bonds  Becured  hereby  shall  be  oontrol- 
ling,  or  in  which  the  said  bondholders  have  by  the  provisions  hereof  any  discretion- 
ary voice  or  power,  the  Trustee  hereunder  may  call  a  meeting  of  the  holders  of  such 
bonds,  at  the  time  outstanding,  in  manner  hereinafter  provided;  and,  until  other- 
wise prescribed  by  said  bondholders,  such  meetings  shall  be  held  at  the  I  litj  ol  New 
York,  and  notice  of  the  objects,  time,  and  place  of  such  meeting  shall  be  nun  by 
publishing  the  same  in  two  newspapers  published  in  the  Citj  of  New  York,  and 
also  in  a  newspaper  published  in  ,  ,  twice  a  week  for  at  least 


8G3 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

eight  successive  weeks  (the  last  publication  to  take  place  on  the  day  in  such  notice 
mentioned  for  such  meeting),  and  by  depositing  in  the  Post  Office,  in  the  City  of 
New  York,  at  the  time  or  previous  to  the  first  publication  thereof,  a  written  or 
printed  copy  of  such  notice  properly  enveloped  and  directed  to  each  and  every  owner 
or  owners  of  and  one  or  more  of  said  bonds  standing  registered  in  his  or  their 
names,  at  his  or  their  registered  place  of  residence,  with  the  postage  prepaid 
thereon ;  provided  that  the  expense  of  publishing  and  giving  such  notice  shall  be  a 
liability  of  the  Company  hereunder,  and  may  be  defrayed,  if  necessary,  out  of  any 
trust  funds  in  the  hands  of  said  Trustee. 

II.  It  shall  be  the  duty  of  the  Trustee  to  call  any  such  meeting,  whenever  the 
Company  or  the  holder  or  holders  of  general  mortgage  bonds  to  an  aggregate 
amount  not  less  than  shall  in  writing  request  the  Trustee  so  to  do,  and 
at  the  same  time  tender  to  the  Trustee  an  adequate  amount  to  cover  the  expenses 
of  calling  and  holding  such  meeting ;  and  if  the  Trustee  shall  fail  to  call  such  meet- 
ing in  manner  aforesaid  within  thirty  days  after  such  request  and  tender,  or  if  the 
said  Trustee  shall  have  resigned  or  become  otherwise  incapacitated,  the  President 
of  the  Company  or  the  holder  or  holders  of  such  bonds  to  the  amount  aforesaid  may 
call  such  meeting  in  manner  herein  provided,  and  at  any  meeting  a  majority  in 
interest  of  the  holders  of  said  bonds  outstanding  may  prescribe  and  establish  such 
rules  and  by-laws  as  they  may  deem  proper  for  the  calling  of  future  similar  meetings 
and  the  regulation  of  proceedings  thereof,  and  alter,  repeal,  or  amend  the  same  at 
pleasure. 

III.  At  any  meeting  so  convened  the  holders  of  said  bonds  shall  be  competent 
to  exercise  in  person  or  by  proxy  all  the  powers  and  authorities  conferred  upon 
them  by  these  presents,  and  a  majority  in  interest  shall  constitute  a  quorum  for  the 
transaction  of  any  business,  provided'  that  less  than  a  quorum  may  adjourn  from 
time  to  time,  and  that  each  bond  shall  entitle  the  holder  or  holders  thereof  to  one 
vote,  and  that  a  majority  of  votes  represented  shall  govern  in  all  cases  wherein  a 
majority  in  interest  of  all  bonds  outstanding  is  not  hereby  required. 

Article  Thirteenth.  —  The  Company  further  agrees  for  itself,  its  successors 
and  assigns,  that  it  shall  and  will,  from  time  to  time  and  at  all  times  hereafter 
during  the  continuance  of  the  lien  of  these  presents,  and  as  often  as  requested  by 
the  Trustee,  execute,  acknowledge,  and  deliver  all  such  further  deeds  of  conveyance 
and  assurances  in  the  law  for  the  better  securing  unto  the  Trustee  upon  the  trusts 
herein  expressed  the  trust  properties  herein  provided  for,  with  all  appurtenances 
thereto,  as  may  be  requested  by  the  Trustee. 

Article  Fourteenth.  —  Incase  the  Company  shall  well  and  truly  pay,  or  cause 
to  be  paid,  all  the  bonds  to  be  issued  hereunder,  or  entitled  to  the  protection  of 
this  indenture,  and  the  coupons  thereto  attached,  at  the  times  and  in  the  manner 
therein  specified,  and  shall  well  and  truly  keep  and  perform  the  covenants  and 
undertakings  herein  and  hereby  required  to  be  kept  and  performed  by  it,  according 
to  the  true  intent  and  meaning  of  this  indenture,  then,  and  in  that  case,  all  the 
trust  properties  hereby  conveyed  shall  revert  to  the  Company,  and  the  estate,  right, 
title,  and  interest  of  the  said  Trustee  aforesaid,  its  successor  or  successors,  shall 
thereupon  cease,  determine,  and  become  void,  and  the  said  Trustee  shall,  by  some 
appropriate  instrument,  declare  the  lien  of  these  presents  to  be  discharged  and  shall 
execute  such  deeds,  assignments,  or  other  instruments  as  shall  be  necessary  or 
convenient  to  free  the  above  trust  properties  therefrom ;  otherwise  the  same  shall 
be  continued  and  remain  in  full  force  and  virtue. 

This  Indenture  is  executed  and  delivered  to  the  said  Trustee  in  several 
counterparts  for  the  purpose  of  simultaneous  record  in  the  proper  offices  in  each 
of  the  several  Counties  of  and  wherein  the  trust  properties 

or  some  part  thereof  is  situated,  but  all  of  such  counterparts  so  executed  and  de- 
livered each  as  an  original,  constitute  but  one  instrument. 

In  Witness  Whereof,  the  said  ,  party  of  the  first  part,  has  caused  these 

presents  to  be  executed  on  its  behalf  by  its  President,  and  its  corporate  seal 
attached  by  its  Assistant  Secretary,  to  be  hereto  affixed,  and  the  said  , 

party  of  the  second  part,  in  evidence  of  its  acceptance  of  the  trust  hereby  created, 
has  likewise  caused  these  presents  to  be  executed  on  its  behalf  by  its  Vice-Pres- 

864 


FORMS   AXD    PRECEDENTS. 


ident,  and  its   corporate  seal,  attested  by    its  Assistant   Secretary,  to   be  hereto 
affixed,  the  day  and  year  lirst  above  written. 


Company. 

By  ,  President. 


(Seal) 

Attest : 


(Seal) 
Attest : 


,  Assistant  Secretary. 


Company. 
By  ,  Vice-President. 


,  Assistant  Secretary. 


SPECIAL  CLAUSE  FOR    INSERTION  IN    TRUST  DEED  TO  SECURE 
ISSUE  OF  BONDS. 

The  trustees  shall  hold  the  moneys  to  arise  from  any  sale  calling  in  collection  or 
conversion  into  money  under  the  primary  trust  for  conversion  upon  trust  that  they 
shall  thereout  in  the  first  place  pay  or  retain  the  costs  or  expenses  incurred  in  or 
about  the  execution  of  the  primary  trust  for  conversion  or  otherwise  in  relation  to 
this  deed,  including  their  own  remuneration,  and  shall  apply  the  residue  of  such 
moneys,  first,  in  or  toward  payment  to  the  note  holders  {pari  passu  in  proportion 
to  the  respective  nominal  amounts  due  therefor)  of  all  arrears  or  interesl  ana  inter- 
est on  interest  remaining  unpaid  on  the  notes  held  by  them  respectively  .  secondly, 
in  or  toward  payments  to  the  note  holders  pari  passu  in  proportion  to  the  respective 
nominal  amounts  of  the  notes  held  by  them  respectively  and  without  any  preference 
or  priority  either  on  account  of  priority  of  issue  or  of  any  notes  having  been  drawn 
for  redemption  or  otherwise  howsoever,  of  all  principal  moneys  due  in  respeel  of  the 
notes  held  by  them  respectively,  and  that  whether  the  said  principal  moneys  shall 
or  shall  not  then  be  payable  ;  and,  thirdly,  shall  pay  the  surplus  if  any  of  such 
moneys  to  the  company  or  its  assigns. 

Provided  always  that  if  the  amount  of  the  moneys  at  any  time  applicable  cinder 
the  preceding  provisions  of  this  clause  to  payment  of  the  principal  moneys  of  the 
notes  shall  be  less  than  10  per  cent  on  the  notes,  the  trustees  may  at  their  discre- 
tion invest  such  moneys  upon  some  or  one  of  the  investments  hereinafter  authorized, 
with  power  from  time  to  time  at  the  like  discretion  to  vary  such  invest  incuts,  and 
such  investments,  with  the  resulting  income  thereof,  may  he  accumulated  until  the 
accumulations  together  with  any  other  funds  tor  the  time  being  under  the  cunt  ml 
of  the  trustees  and  applicable  for  the  purpose  shall  amount  in  a  sum  sufficient  to 
pay  10  per  cent  upon  the  notes  and  that  such  accumulations  and  funds  shall  lie 
applied  in  manner  aforesaid. 

COPY  OF    RESOLUTION    PASSED    AT    STOCKHOLDERS'    MEETING, 
TAKING  OVER  ASSETS  OF  A  COPARTNERSHIP. 

Upon  motion  duly  made  and  seconded,  and  by  the  affirmative  vote  of  all  present, 
the  following  preambles  and  resolution  were  unanimously  adopted  : 

Whereas,  ,  copartners  doing  business  under  the  name  and  style 
of  ,  in  the  City  of  ,  have  offered  to  assign  to  this  Company 
the  good  will  and  personal  property  belonging  to  said  copartnership  (which  ■  lia 
personal  property  is  more  particularly  described  in  a  proposed  Hill  of  Sale  therefor, 
a  copy  thereof  being  inserted  in  the  Minute  Book  of  this  Corporation)  in  con  [dera- 
tion of  the  issue  of  stock  of  this  Company   to  them  in  the  a lint  of 

dollars  par  value  ;  and 

Whereas,  it  appears  to  the  stockholders  of  this  Company  that  such  property  is 
necessary  for  the  business  of  this  Company,  and  that  the  same  is  of  the  value  of 

dollars;    Now,  therefore,  he  it 


INCORPORATION  AND   ORGANIZATION   OF  CORPORATIONS. 

Resolved,  that  the  Board  of  Directors  of  this  Company  be  and  they  hereby  are 
authorized  and  directed  to  purchase  the  said  property  above  mentioned  for  the  said 
price  and  to  issue  said  stock  hi  payment  tbereof. 


COPY  OF  RESOLUTION  PASSED   AT  DIRECTORS'  MEETING. 

Upon  motion  duly  made  and  seconded,  it  was 

Resolved,  that   this   Company   accept   the   offer  of  and  ,  co- 

partners" doing  business  as  ,  to  sell  to  this  Company  the  property  described 

in  the  resolution  passed  at  the  first  meeting  of  the  Corporation,  authorizing  such 
purchase,  and  the  Board  of  Directors  do  hereby  adjudge  and  declare  that  said 
property  is  of  the  fair  value  of  thousand  dollars  ($  );  and  that 

the  same  is  necessary  for  the  business  of  this  Company;  and  be  it  further 

Resolved,  that  the  proposed  agreement  for  the  sale  of  said  property  presented 
at  this  meeting  be  and  the  same  hereby  is  approved  as  to  form,  and  the  President 
and  Secretary  of  the  Company  are  hereby  authorized  and  directed  to  execute  said 
agreement  in  the  name  ana  on  the  behalf  of  tins  company  and  to  affix,  the  corporate 
seal  thereto  ;  and  be  it  further 

Resolved,  that  the  President  and  Secretary  be  and  they  hereby  are  authorized 
and  directed  to  issue  to  the  order  of  said  certificates  of  full  paid  stock 

of  this  Company  to  the  amount  of  thousand  dollars. 


BILL   OF  SALE. 

Know  all  Men  by  these  Presents  :  That  I,  ,  doing  business  in 

,  State  of  ,  under  the  name  and  style  of  ,  party 

of  the  first  part,  in  consideration  of  the  sum  of  one  dollar  and  other  valuable  con- 
siderations, to  me  in  hand  paid  by  the  Company,  a  Corporation  organized 
and  existing  under  the  laws  of  the  State  of  ,  party  of  the  second  part, 
the  receipt  whereof  I  do  hereby  acknowledge,  have  bargained,  sold,  granted,  and 
conveyed,  and  by  these  presents  do  bargain,  sell,  grant,  and  convey  unto  the  said 
party  of  the  second  part,  its  successors  and  assigns,  all  the  personal  property, 
good  will,  and  assets  of  whatsoever  nature,  of  the  business  conducted  by  me  under 
the  name  and  style  of  ,  at  No.  ,  County,  State 
0f  f  of  which  personal  property  and  assets  a  schedule  is  hereto  annexed 
marked  "Exhibit  A,"  and  is  hereby  made  a  part  of  this  Bill  of  Sale. 

To  Have  and  to  Hold  the  same  unto  the  said  party  of  the  second  part,  its  suc- 
cessors and  assigns,  forever. 

hi  Witness  Whereof,  I  have  hereunto  set  my  hand  and  seal  this  day 

of  May,  1906.  (L-  S0 

Signed,  sealed,  and  delivered  in  the  presence  of 


BOND   SECURING  A  CORPORATION  FROM  LOSS   ON  ACCOUNT 
OF  ISSUANCE   OF  DUPLICATE   CERTIFICATE   OF  STOCK. 

Know  all  Men  by  these  Presents  :  That  we,  ,  of  the  City  of 

,  State  of  ,  and  ,  of  the  City  of  ,  State  of 

,  and  ,  of  the  City  of  ,  State  of  ,  are 

held  and   firmly   bound  unto  the  Company,  a  Corporation   organized 

and  existing  under  the  laws  of  the  State  of  ,  in  the  sum  of  twenty 

thousand  dollars  ($20,000),  good  and  lawful  money  of  the  United  States,  to  be 
paid  to  the  said  Company,  its  successors  and  assies  ;  for  which  pay- 

866 


FORMS    AND    IM;r.(  EDENTS. 

incut  well  and  truly  to  be  made  we  do  bind  ourselves,  our  heirs,  executors,  and 
administrators,  jointly  and  severally,  firmly  by  these  presents:  and 

Whereas,  the  Company(i  ion  organized  and  existing  uuder 

the  laws  oftlie  State  of  ),  did  on  the  daj  ,190     . 

issue  a  certificate  of  stock  (numbered       )  lo  ,  of  the  City  of 

State  of  ,  for  ten  thousand  (10,000)  shares  of  the  capital  stuck  of  said 

Company,  of  the  par  value  of  dollars  (f  )  each  ; 

and 

Whereas,  said  stock  certificate  is  alleged  to  be  lost  so  that  the  same  eann.it  be 
found  ;  and 

Whereas,  the  said  has    requested   the   said  Company    to 

issue  a  new  certificate  to  him  in  place  of  said  Inst   certificate;  and 

Whereas,  the  said  Company  is  willing  to  issue  a  new  certifii 

place  of  the  one  alleged  to  he  lost,  provided  it  be  properly  indemnified  in  the 
premises.  Now,  the  condition  of  this  obligation  is  such  that  it'  the  said  above 
bounden  ,  and  ,  and  ,  their  executors  or  adminis- 

trators, or  any  of  them,  shall  indemnify  and  save    harmless  the  said 
Company  from  and  against  any  and  all  suits,  actions,  damages,  costs,  charges 
expenses  in  any  suit  arising  out  of  or  connected  with  the  loss  of  said  certificate 
of  stock  above  referred  to,  then  this  obligation  is  to  be  void,  otherwise  to  remain  in 
full  force  and  effect. 


State  of  |gs 

County  of  \ 

On  this  day  of  ,  in  the  year  1906,  before  me  personally 

came  and  ,  to  me  known  and   known  to   me  to   be  the  indi- 

viduals described  in  and  who  executed  the  foregoing  instrument,  and  they  severally 
acknowledged  to  me  that  they  executed  the  same. 

Notary  Public. 


CERTIFICATE  OF  CLERK  CERTIFYING  TO   HIS  APPOINTMENT. 

(Maine.) 

L,  ,  a  resident  of  the  Stale  of  Maine,  residing  at  , 

in  the  City  of  ,  State  of  Maine,  hereby  certify  that  on  the 

day  of  ,  190  .     1  was  duly  elected  Clerk   of  the  Com- 

pany, a  Corporation  duly  organized   and   existing  under   the  laws  of  the   State  of 
Maine,  and  that  I  have  accepted  and  qualified  for  said  office,  and  that  m 
residence  is  as  above  stated. 

Dated  •  _,    , 

,   Clerk. 


FORM  FOR  CORPORATE  SIGNATURE. 

In  Witness  Whereof,  the  said  Company   Ins  hereunto  caused  its  cor- 

porate name  to  be  signed  and  its  corporate  seal  hereunto  affixed  DJ 
us  President,  and  by  ,  its  Secretary,  at  the  <  lity  o  » 

State  of  ,  this  day  of  ,  190  • 

( iompany. 
By  ,  President. 

Attest: 

,  Secretary. 

SOT 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 


FORM  FOR  INSERTION  IN  BY-LAWS  AS  TO  POWERS  OF 
GENERAL  MANAGER. 

The  duties  of  the  General  Manager  shall  be  to  exercise  general  supervision  and 
direction  of  all  the  business  interests  of  the  Company,  and  in  connection  therewith 
to  control,  direct,  and  superintend  all  the  business  of  the  Company  wherever  con- 
ducted or  carried  on,  and  in  connection  therewith  to  employ  all  clerical  help  and 
such  labor  as  may  be  necessary  to  properly  conduct  the  business  of  the  Company. 


FORM  FOR  APPOINTMENT  OF  MANAGING  DIRECTORS. 

That  be  and  they  hereby  are  appointed  Managing  Directors  of 

Company,  with  general  supervision  and  direction  of  the  business  in- 
terests of  the  Company,  and  with  such  additional  powers  as  the 
Board  of  Directors  or  the  stockholders  of  this  Company  may  from  time  to  time 
confer  upon  them. 

AFFIDAVIT  OF  MAILING  NOTICE  OF  STOCKHOLDERS'  MEETING. 

State  of 
County  of 

,  having  first  been  duly  sworn,  on  oath  says,  that  he  is  the  Secretary  of 
the  Company,  a  Corporation  organized  and  existing  under  the  laws 

of  the  State  of  ;   that  on  the  day  of  , 

190  ,  he  caused  a  notice  of  the  annual  (or  special)  meeting  of  the  stockholders  of 
said  Company,  a  true  copy  of  which  is  hereto  annexed  and  is  hereby  made  a  part  of 
this  affidavit,  to  be  mailed  in  a  sealed  envelope,  postage  prepaid,  addressed  to  each 
stockholder  of  record  of  said  Company  at  his  last  known  address  as  the  same 
appears  on  the  books  of  the  Company. 

Sworn  and  subscribed  to  before  me  this  day  of  ,  190     . 

,  Notary  Public, 

County. 


FORM  FOR  ACKNOWLEDGMENT  BY  ATTORNEY  IN  FACT. 

State  of 
County  of 

I  hereby  certify  that  on  this  day  of  in  the  year  of  our 

Lord  before  me,  the  subscriber  (title  of  officer  taking  acknowledgment), 

personally  appeared  (name  of  attorney),  the  attorney  of  (name  of  principal)  named 
in  the  foregoing  (name  of  instrument),  and  by  virtue  and  in  pursuance  of  the  au- 
thority heretofore  conferred  upon  him  acknowledged  that  he  executed  the  said 
(name  of  instrument)  as  the  act  of  said  (principal's  name). 

ACCEPTANCE  OF  CONSTITUTION. 

Whereas,   the  Company,  a  Corporation   organized  and  existing 

under  the  laws  of  the  State  of  ,  having  duly  filed  in  the  office  of  the 

Secretary  of  State  of  the  State  of  a  duly  authenticated  copy  of  its 

articles  of  incorporation,  and  having  formally  made  application  for  a  permit  to  do 
business  in  said  State  of  as  a  foreign  Corporation; 

Now,  therefore,  the  said  Company,  desiring  and  intending  to 

conform  in  all  respects  to  the  Constitution  and  Laws  of  said  State  and  to  avail  itself 
868 


FORMS   AND    PRECEDENTS. 

of  the  rights,  privileges,  and  immunities  granted  by  said  Constitution  and  Laws, 
does  hereby  accept  the  provisions  of  tbe  Constitution  of  the  State  of 
for  all  intents  and  purposes  contemplated  by  the  provisions  thereof  relating  to  such 
acceptance  by  all  private  business  corporations. 

In  Witness  Whereof^  the  said  Company  has  caused  this  certificate 

and  acceptance  to  be  executed,  acknowledged,  and  delivered  in  its  name  and  on  its 
behalf  by  its  President  and  to  be  attested  by  its  Secretary,  and  hath  caused  its  cor- 
porate seal  to  be  hereunto  affixed  at  ,  in  the  County  of  , 
State  of                         ,  this                           day  of 

Company. 
By  ,  President. 

Attest :  ,  Secretary. 

State  of  > 

County  of  \     ' 

Ou  this  day   of  ,  in  the  year  190     ,   before    inc. 

,  a  Notary  Public  in  and  for  said  County  and  in  tbe  State  aforesaid, 
personally  appeared  ,  known  to  me  to  be  the  President  of  th 

poration  that  executed  the  within  aud  foregoing  certificate,  and  acknowledged  to  me 
that  said  Corporation  executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  baud  and  affixed  my  notaris 
this  day  of  ,  190  * . 


My  commission  expires  on  the  day  of  ,  190     . 

CERTIFICATE  OF  INCORPORATION 

OF 

Auditing  Company   (New  Jersey  Charter). 

Article  1.   The  corporate  name  is  : 

Article  2.    The  objects  of  the  corporation  are  : 

To  open,  take  charge  of,  maintain,  keep,  institute,  examine,  audit,  certify  to,  and 
guarantee  the  correctness  of  the  books  and  accounts  of  all  persons,  firms,  part- 
nerships, corporations,  banks,  trust  estates,  trust  companies,  Building  and  Loan 
Associations,  beneficial  associatious,  and  all  other  natural  or  corporate  beings 
whatsoever. 

To  furnish  all  persons,  firms,  partnerships,  and  corporations  with  complete  and 
modern  system  or  systems  of  auditing  and  accounting,  and  to  act  as  controller  or 
auditor  thereof,  and  to  issue  certificates  of  efficiency  to  accountants. 

To  act  as  a  collecting  agency  for  its  patrons,  take  assignments  of  claims  against 
debtors  of  its  patrons  and  others,  and  sue  thereon  in  its  own  name,  if  not  pro- 
hibited, to  act  as  mercantile  agency,  to  investigate  and  recommend  persons  desirous 
of  doing  business  with  its  patrons  and  others,  and  to  issue  certificates  as  to  the 
responsibility  of  persons,  firms,  partnerships,  and  corporations. 

To  make  and  keep,  by  means  of  photograph]  or  otherwise,  complete  and  accu- 
rate copies  or  records  of  the  books  and  accounts  of  all  persons,  firms,  partnerships, 
corporations,  trust  estates,  Building  and  Loan  Associations,  beneficial  associations, 
municipalities,  and  the  records  of  all  other  natural  or  corporate  beings  whatsoever- 
Said  corporation  shall   indemnify  and   save  harmless   its  patrons  from  an\  and  all 

costs  or  expenses,  loss  or  damage,  arising  oul  of  any  error  committed  bj  Baid  eor 

poration  or  its  agents  in  the  duties  aforesaid,  and  said  corporation  herebs  expn 
waives  all  rights  to  any  benefits  of  any  statute  of  limitation  now  in  force  or  herein- 
after to  be  enacted. 

As  subsidiary  objects  and  powers  the  corporation  may 

Manufacture,  purchase,  or  otherwise  acquire,  goods,  wares,  merchandise,  and 

personal    property  of  every  class  and  descripli and    hold,  own,  mortgage,  Bell,  or 

Otherwise  dispose  of.  trade,  deal  in,  and  deal  with  the  same. 

800 


INCORPORATION   AND    ORGANIZATION   OF   CORPORATIONS. 

Acquire  and  undertake  the  good  will,  property,  rights,  franchises,  and  assets  of 
every  kind  and  the  liabilities  of  any  person,  firm,  partnership,  or  corporation,  either 
partly  or  wholly,  and  pay  for  the  same  in  cash,  stock,  or  bonds  of  the  corporation 
or  otherwise. 

Enter  into,  make,  perform,  and  carry  out  contracts  of  every  kind  and  for  any 
lawful  purpose  with  any  person,  firm,  association,  or   corporation. 

Borrow  or  raise  money  without  limit  as  to  amount  by  the  issue  of,  or  upon  war- 
rants, bonds,  debentures,  and  other  negotiable  or  transferable  instruments  or 
otherwise. 

Hold,  purchase,  or  otherwise  acquire,  sell,  assign,  transfer,  mortgage,  pledge,  or 
otherwise  dispose  of  shares  of  the  capital  stock,  bonds,  debentures,  or  other  evi- 
dences of  indebtedness  created  by  any  other  corporation  or  corporations,  and  while 
the  owner  thereof  exercise  all  the  rights  and  privileges  of  ownership,  including  the 
right  to  vote  thereon. 

To  apply  for,  purchase,  or  otherwise  acquire,  and  to  hold,  own,  use,  operate, 
and  to  sell,  assign,  or  to  otherwise  dispose  of;  to  grant  licenses  in  respect  of,  or  to 
otherwise  turn  to  account  any  and  all  inventions,  improvements,  processes,  and 
trade  marks  used  in  connection  with,  or  secured  under,  letters  patent  or  copyright 
of  the  United  States  of  America,  or  elsewhere  or  otherwise,  and  with  a  view  to  the 
working  and  development  of  the  same,  to  carry  on  any  business,  whether  manufac- 
turing  or  otherwise,  which  the  corporation  may  think  calculated  directly  or  indi- 
rectly to  effectuate  these  objects. 

Conduct  business  in  any  of  the  States,  Territories,  colonies,  or  dependencies  of 
the  United  States,  in  the  District  of  Columbia,  and  in  any  and  all  foreign  countries ; 
to  have  one  or  more  offices  therein,  and  to  hold,  purchase,  and  convey  and  mortgage 
real  and  personal  property  without  limit  as  to  amount  therein,  but  always  subject  to 
the  laws  thereof. 

Remunerate  any  person  or  corporation  for  services  rendered,  or  to  be  rendered 
in  placing  or  assist'iug  to  place  or  guaranteeing  the  placing  of  any  of  the  shares  of 
the  capital  stock  of  the  corporation,  or  any  debentures  or  other  securities  of  the 
corporation,  or  in,  or  about  the  formation  or  promotion  of  the  corporation,  or  in 
the  conduct  of  its  bus  ness. 

Subject  to  the  provisions  of  law,  purchase,  hold,  and  reissue  the  shares  of  its 
capital  stock. 

Do  any  and  all  the  things  herein  set  forth  to  the  same  extent  as  natural  persons 
might  or  could  do,  and  in  any  part  of  the  world. 

In  general,  the  corporation  may  carry  on  any  other  business  in  connection  with 
the  foregoing,  whether  manufacturing  or  otherwise,  and  have  and  exercise  all  the 
powers  conferred  by  the  laws  of  New  Jersey  upon  corporations  formed  under  the 
act  hereinafter  referred  to ;  it  being  hereby  expressly  provided  that  the  foregoing 
enumeration  of  specific  powers  shall  not  be  held  to  limit  or  restrict  in  any  manner 
the  general  powers  of  the  corporation. 

Article  3.  The  corporation  shall  be  authorized  to  issue  capital  stock  to  the 
extent  of  two  hundred  thousand  dollars  ($200,000),  divided  into  two  thousand 
shares  of  the  par  value  of  one  hundred  dollars  ($100)  each. 

Article  4.  In  furtherance  and  not  in  limitation  of  the  powers  conferred  by 
statute,  the  Board  of  Directors  are  expressly  authorized : 

To  hold  their  meetings,  to  have  one  or  more  offices,  and  to  keep  the  books  of 
the  Company  within  or  without  the  State  of  New  Jersey,  at  such  places  as  may  be 
from  time  to  time  designated  by  them;  but  the  Company  shall  always  keep  at  its 
principal  and  registered  office  in  New  Jersey,  a  transfer  book  hi  which  the  transfers 
of  stock  can  be  made,  entered,  and  registered,  and  also  a  book  containing  the  names 
and  addresses  of  the  stockholders,  and  the  number  of  shares  held  by  them  respec- 
tively, which  shall  be  at  all  times  during  the  business  hours  open  to  the  inspection 
of  the  stockholders  in  person. 

To  determine  from  time  to  time  whether,  and,  if  allowed,  under  what  conditions 
and  regulations  the  accounts  and  books  of  the  Company  (other  than  the  stock  and 
transfer  books)  or  any  of  them  shall  be  open  to  the  inspection  of  the  stockholders, 
and  the  stockholders'  rights  in  this  respect  are,  and  shall  be  restricted  or  limited 
accordingly. 

870 


FORMS   AXD    PRECEDENT-. 

To  make,  alter,  amend,  rescind  the  by-laws  of  the  Company,  to  fix  the  amount 
to  be  reserved  as  workiug  capital,  to  tix  the  times  for  the  declaration  and  payment 
of  dividends,  to  authorize  and  cause  to  be  executed  mortgages  and  liens  upon  i  lie 
real  and  personal  property  of  the  Company,  provided  always  that  the  majority  of 
th  •  whole  Board  concur  therein. 

Bv  a  resolution  passed  by  a  majority  vote  of  the  whole  Board,  under  suitable 
provision  of  the  by-laws,  to  designate  two  or  more  of  their  number  to  constitute  an 
Executive  Committee,  which  Committee  shall  for  the  time  being,  as  provided  in 
said  resolution,  or  in  the  by-laws,  have  and  exercise  any  and  all  the  powers  of  the 
Board  of  Directors  which  may  he  lawfully  delegated  in  the  management  of  the  h 
ness  and  affairs  of  the  Company,  and  shall  have  power  to  authorize  the  seal  of  the 
Company  to  he  affixed  to  all  papers  which  may  require  it. 

Willi  the  consent  in  writing  and  pursuant  also  to  the  affirmative  vote  of  the 
holders  of  the  majority  of  the  stock  isstied  and  outstanding,  at  a  stockholders1 
meeting  duly  called  for  that  purpose,  to  sell,  assign,  transfer,  or  otherwise  dispose 
of  the  property  of  the  Company  as  an  entirety,  provided,  always,  that  the  majority 
of  the  whole  Board  concur  therein. 

The  Company  may  apply  and  use  its  surplus  earnings  or  accumulated  pn 
the  purchase  or* acquisition  of  property,  and  to  the  acquisition  and  purchase  of  its 
own  capital  stock  from  time  to  time,  t>  such  extent  and  in  such  manner,  and  upon 
such  terms  as  its  Board  of  Directors  may  determine  ;  and  neither  the  property  nor 
capital  stock  so  purchased  or  acquired  shall  be  regarded  as  profits  for  the  purpose 
of  declaration  or  payment  of  dividends,  unless  otherwise  determined  by  a  majority 
of  the  Board  of  Directors. 

The  corporation  reserves  the  right  to  amend,  alter,  or  repeal  any  provision  con- 
tained in  this  certificate  of  incorporation,  in  the  manner  now  or  hereafter  prescribed 
by  statute,  and  all  rights  conferred  to  stockholders  are  granted  subject  to  this 
reservation. 

All  disputes  between  members  of  the  corporation,  or  between  it  and  its  patrons, 
shall  be  settled  by  arbitration;  the  party  claimant  delivering  personally  or  by 
United  States  mail' to  the  party  defendant  at  his  home  or  place  of  business,  the  claim 
verified  by  affidavit,  to  which  claim  the  party  defendant  shall  have  sixty  days  to 
reply.  The  partv  claimant  may  then  appoint  an  arbitrator,  giving  written  notice 
thereof  to  the  party  defendant,  who  shall  within  ten  days  appoint  the  second  arbitra- 
tor, or  the  first  arbitrator  shall  then  make  such  appointment,  both  of  said  arbitrators 
to  be  versed  in  the  subject  matter  of  dispute  ;  said  two  arbitrators  shall  then  appoint 
the  third  who  shall  be  learned  in  the  law  and  shall  preside  over  the  Board,  whose 
hearings  shall  be  held  at  such  time  and  place  as  may  he  fixed  by  the  Board.  Upon 
due  notice,  the  parties  shall  submit  in  writing  to  said  arbitrators  all  the  facts  verified 
by  affidavit,  and  may  be  heard  by  counsel.  The  decision  of  said  arbitrators,  or  a 
majority  of  them,  shall  be  final  aiid  conclusive  and  without  appeal.  If  the  award  is 
not  settled  or  complied  with  within  twenty  days,  the  successful  party,  if  the  award 
is  for  money,  may  file  the  same  in  the  Court  having  jurisdiction  and  proceed  to  ex- 
ecution and" sale  in  the  usual  course  for  the  enforcement  of  said  award  ;  or.  in  ease 
the  award  is  in  equity,  the  successful  party  may  file  a  bill  reciting  only  these  pro- 
ceedings and  the  award,  and  praying  for  the  aid  of  said  Court  to  enforce  compliance 
therewith. 

Article  5.    (Clause  designating  office  and  agent  in  New  Jersey  ) 

In  accordance  with  an  Act  of  the  Legislature  of  the  State  of  New  Jersey  entitled 
"  An  Act  Concerning  Corporations "  (Revision  of  1896)  and  the  Acts  amendatorj 
thereof  and  supplemental  thereto,  for  the  purpose  of  forming  a  corporation  of  un- 
limited duration  to  do  business  within  and  without  the  State  of  New  Jersey,  the 
undersigned  do  respectively  subscribe  for  the  capital  stuck  with  which  the  corp 
tion  will  begin  business,  and  do  agree  to  take  the  number  of  shares  set  opposite 
our  names,  and  have  accordingly  Bigned  tins  certificate  and  affixed  ourseala  thereto. 

No.  of  Shares 
Name.  taken  bj  each  Subscriber.  Amount 


871 


INCORPORATION    AND   ORGANIZATION   OP   CORPORATIONS. 


ARTICLES    OF    INCORPORATION    OF   A    MINING    AND   SMELTING 
COMPANY.     (SOUTH  DAKOTA  CHARTER.) 

Know  all  Men  by  these  Presents,    that  we,  the  undersigned, 
and  ,  for  ourselves,  our  associates  and  successors,  have  associated  ourselves 

together  for  the  purpose  of  forming  a  corporation  under  and  by  virtue  of  the  stat- 
utes and  laws  of  the  State  of  South  Dakota,  and  we  do  hereby  certify  and  declare 
as  follows,  to  wit : 

First. 

The  name  of  this  Corporation  shall  be  Company. 

Second. 

The  purposes  for  which  this  Corporation  is  formed  are :  To  acquire  by  purchase, 
lease,  location,  or  otherwise  all  classes  of  mines  and  mining  properties  containing 
copper,  nickel,  gold,  silver,  or  other  precious  or  base  metals.  To  acquire  by  pur- 
chase, lease,  location,  or  otherwise  properties  contaiuing  deposits  of  clays,  stones, 
coal,  oil,  and  other  substances. 

To  develop  and  operate  mining  properties  and  mines  ;  to  carry  on  the  business 
of  mining,  converting,  milling,  reducing,  smelting,  treating,  preparing  for  market, 
manufacturing,  buying,  selling,  and  otherwise  producing  and  dealing  iu  ores  of  gold, 
silver,  copper,  iron,  zinc,  nickel,  and  lead.  To  acquire  by  purchase,  lease,  location, 
or  otherwise  mineral  claims,  metalliferous  lands,  mining  and  water  rights  and 
privileges,  mill  sites,  timber  lands,  lime  and  stone  quarries,  lumber  yards,  brick 
yards,  and  coal  lands  of  every  class  and  description.  To  build,  equip,  and  operate 
mills  and  other  plants  for  the  smelting,  reduction,  and  treatment  of  ores  of  all  kinds 
and  descriptions.  To  buy,  sell,  manufacture,  and  deal  in  machinery,  blasting  powder 
of  all  descriptions,  dynamite,  fuses,  caps,  candles,  implements  and  conveniences 
suitable  to  or  convenient  for  use  in  connection  with  the  business  of  the  Company. 

To  purchase,  construct,  erect,  lease,  own,  and  operate  pumping  plants,  pipe 
lines,  reservoirs,  canals,  water  ways,  and  ditches  for  the  transmission  of  power, 
sewerage,  and  conveyance  of  water  for  the  use  of  the  Company  in  conducting  its 
business,  and  for  the  sale  and  delivery  of  such  water  to  others. 

To  build,  purchase,  sell,  and  operate  electric,  steam,  or  other  plants  for  the  pro- 
duction of  power  and  light,  together  with  the  necessary  wire  lines  and  other  means 
of  transmission  of  light  and  power,  the  same  to  be  generated  for  the  use  of  the 
Company,  or  for  the  sale  of  such  light  and  power  to  others. 

To  construct,  build,  purchase,  lease,  operate  and  own  electric,  aerial,  and  sur- 
face tramways  for  the  purpose  of  transporting  ores  and  supplies  and  other  materials 
to  and  from  the  Company's  properties,  and  to  operate  the  same  by  electricity,  steam, 
or  other  motive  power. 

To  construct,  purchase,  build,  lease,  own,  and  operate,  private  railways,  steam- 
boats, and  other  vessels  for  the  transportation  of  its  ores  and  other  properties  ;  to  own 
and  operate  wagon  trains  and  pack  trains ;  to  own  and  operate  commercial  stores 
for  the  sale  of  merchandise  to  its  employees  and  others ;  to  build,  maintain,  and 
operate  boarding-houses  for  the  use  of  the  Company's  employees  and  others ;  to 
purchase,  lease,  rent,  and  acquire  real  estate  and  own  the  same,  and  to  sell  or  lease 
all  or  any  part  or  portion  thereof,  to  plat  and  lay  out  town  sites  and  sell  or  dispose 
of  properties  therein  and  to  improve  the  same. 

To  carry  on  the  business  of  producing,  refining,  storing,  or  supplying  and  dis- 
tributing petroleum  products  in  all  its  branches ;  also  to  refine  and  store  vegetable 
and  animal  oils  ;  to  construct,  purchase,  lease,  operate,  and  maintain  pipe  lines  and 
tanks  for  the  distribution  and  storage  of  oil. 

To  acquire  shares  of  the  capital  stock  and  securities  of  any  incorporated  com- 
pany or  otherwise,  and  to  hold,  sell,  or  otherwise  deal  in  and  with  the  same.  To 
enter  into  any  agreements,  arrangements,  or  contracts  with  any  person  or  persons 
for  the  purchase,  either  conditionally  or  otherwise,  and  to  hold,  sell,  or  otherwise 
deal  in  and   with  any  mines,  mining  claims,  mills,  plants,  machinery,  shares   of 

872 


FORMS   AND    PRECEDENTS. 

capital  stock  or  securities  of  any  company,  and  to  sell,  assign,  and  transfer  and  Bel 
over  the  same  upon  such  terms  and  for  such  consideration  as  may  be  deemed  advis- 
able.   To  sell  the  undertakings  and  contracts  of  the  Company  or  any  part  thereof 

of  any  of  its  contracts  or  part  thereof  or  any  of  its  property  or  rights  for  such  con- 
sideration as  may  be  proper,  and  to  accept  payment  for  any  property  or  rights  sold 
or  otherwise  disposed  of  by  the  Company,  cither  in  cash  or  otherwise,  or  in  any 
shares  of  stock  of  any  company  or  by  means  of  a  mortgage  or  by  debenture  stock 

or  debenture  bonds  of  any  corporation,  or  partly  in  one  mode  and  partlv  in  another. 

To  establish  or  promote  or  assist  in  promoting  or  establishing  any  company,  and 
to  guaran'ee  or  underwrite  or  cause  to  be  guaranteed  or  underwritten  subscrip- 
tions for  the  shares  or  securities  of  any  such  company,  or  to  subscribe  for  the  88 

or  any  pari  thereof.  To  distribute  among  the  stockholders  of  the  Company  an\ 
shares  of  stock  or  securities  of  any  corporation  acquired  by  the  Company,  so  long 
as  the  capital  stock  is  not  impaired  thereby.     To  act  as  the  general  fiscal  agent  or 

strar  of  any  corporation,  association,  or  person.  To  do  all  and  every  thing 
necessary,  suitable,  or  proper  for  the  accomplishment  of  any  of  the  purposes  or  the 
attainment  of  any  of  the  objects  hereinbefore  enumerated,  either  alone  or  in  asso- 
ciation with  other  corporations  or  individuals,  as  principals,  agents,  contractors, 
trustees,  or  otherwise,  and  by  or  through  trustees,  agents,  or  otherwise,  and  in 
general  to  engage  in  any  and  all  lawful  business  whatever  necessary  or  convenient 
in  connection  with  the  business  of  the  Company  and  for  the  purposes  appertaining 
thereto. 

To  manufacture,  import,  export,  and  generally  deal  iu  goods,  wares,  merchandise, 
and  property  of  every  class  and  description. 

To  purchase,  lease,  or  otherwise  acquire  all  kinds  of  personal  property  which 
the  Corporation  may  deem  necessary  for  the  purposes  of  its  business.  To  purchase, 
lease,  or  otherwise  acquire  real  estate  —  improved  or  unimproved  —  without  limit 
as  to  amount  in  any  State  or  Territory  of  the  United  States  or  foreign  country. 

The  Corporation  shall  have  power  to  own,  bold,  and  manage  property  and  eon- 
duct  its  business  or  any  part  thereof  in  the  various  States  and  Territories  of  the 
United  States  of  America  and  its  territorial  acquisitions  and  possessions,  the 
District  of  Columbia,  and  in  any  foreign  country  or  countries,  and  may  have  one 
or  more  offices  outside  of  the  State  of  South  Dakota. 

Third. 

The  place  where  the  principal  business  of  this  Corporation  shall  be  transacted  is 
in  the  City  of  ,  State  of  South  Dakota;  but  it  may  have  a  business  office 

without  this  State,  at  the  City  of  ,  State  of  ,  and  any   huh  tings  of 

the  incorporators,  stockholders,  or  directors  of  this  Company  may  be  held  at  either 
of  said  offices  or  places  of  business;  and  the  books  of  this  Corporation  may  be 
kept  at  either  of  said  offices  or  places  of  business;  and  any  incorporator  or  stock- 
holder entitled  to  be  present  and  to  vote  at  any  such  meeting  may  be  represented 
and  vote  thereat  by  proxy. 

The  domiciliary  office  of  this  Corporation  shall  be  at  the  office  of  the 
Company  in  said  City  of  ,  South  Dakota. 

This  Corporation  hereby  appoints  as  its  resident  agent  in  South  Dakota,  and 
upon  whom  legal  process  against  this  Corporation  may  be  served,  ,  of  the 

City  of  ,  South  Dakota. 

Fourth. 

The  term  for  which  this  Corporation  shall  exist  shall  be  twenty-five  years, 
with  such  right  of  renewal  for  other  and  similar  periods  as  ma\  now  or  hereafter 
be  permitted  under  the  laws  of  South  Dakota. 

Fifth. 

The  number  of  directors  of  this  Corporation  shall  be  seven,  anil  each  direr- 
tor  shall    hold  at    hast    one    share   of    stock.      The   names   and    residences  of    the 

878 


INCOEPORATION   AND    ORGANIZATION    OP    CORPORATIONS. 

directors  who  are  to  serve  for  the  first  year  or  until  the  election  of  their  successors 
are  as  follows  : 

Names.  Residences. 

An  Executive  Committee  composed  of  three  directors  may  be  appointed  by  the 
Board  of  Directors  of  this  Corporation,  in  which  event  such  committee  shall  be 
provided  for  in  its  by-laws,  and  said  Executive  Committee  shall  have  the  same 
powers  as  the  Board  of  Directors ;  but  this  provision  shall  not  apply  to  the  election 
of  the  Company's  officers. 

Sixth. 

The  amount  of  the  capital  stock  of  this  Corporation  shall  be  and  is 
dollars  ($  ),  divided  into  (  )  shares  of  the  par  value  of 

dollar  (S  )  per  share. 

When  and  in  the  event  that  property  is  taken  by  this  Corporation  in  considera- 
tion for  capital  stock  of  the  Corporation,  the  judgment  of  the  Board  of  Directors 
of  the  Company,  made  in  good  faith  and  entered  in  the  minutes  of  the  Corporation, 
shall  be  conclusive  as  to  the  value  of  such  property. 

In  Testimony  Whereof,  we  have  hereunto  set  our  hands  this  day  of 

November,  1907. 


CERTIFICATE   OF  INCORPORATION  OF  TRANSPORTATION 
COMPANY. 

(Arizona  Charter.) 

This  is  to  Certify  that  we,  ,  have  this  day  associated  ourselves 

together  for  the  purpose  of  forming  a  corporation  under  the  laws  of  Arizona,  and 
for  that  purpose  do  adopt  the  following  charter  : 

First.    The  name  of  this  corporation  is  the  Company. 

Second.    This  Company  shall  keep  their  principal  office  at  ,  Arizona, 

at  which  place  all  incorporators'"  and  stockholders'  meetings  shall  be  held. 

Third.   The  amount  of  the  capital  stock  of  this  corporation  shall  be  $  , 

divided  into  shares  of  the  par  value  of  $  each,  and  said  capital 

stock  shall  be  paid  at  such  time  as  the  Board  of  Directors  may  designate,  in  money, 
property,  labor,  good  will,  or  any  other  valuable  right  or  thing. 

Fourth.  The  objects  for  which  this  corporation  is  formed  are,  as  principals, 
agents,  or  otherwise,  to  do  in  any  part  of  the  world  any  and  every  of  the  things 
herein  set  forth  to  the  same  extent  as  natural  persons  might  or  could  do,  and  in 
furtherance  and  not  in  limitation  of  the  general  powers  conferred  by  laws  of 
Arizona,  it  is  hereby  expressly  provided  that  the  corporation  shall  have  the  follow- 
ing powers  •. 

(«)  That  the  objects  for  which  this  Company  is  formed  are  the  transportation 
for  hire  of  passengers  and  mails,  goods,  wares,  merchandise,  animals,  and  other 
property  and  materials  of  all  kinds  and  nature  whatsoever  to,  from,  and  between 
the  various  cities,  towns,  and  ports  of  the  world,  by  means  of  steam  or  sailing 
vessels ;  the  purchase,  owning,  chartering,  and  employment  of  steam  and  other 
vessels,  and  the  purchase,  owning,  and  holding  of  shares  or  portions  of  such  steam 
or  other  vessels,  and  of  the  stock,  bonds,  and  other  securities  of  corporations  of  this 
and  other  States  and  countries  ;  to  purchase,  lease,  acquire,  and  bold  such  real  estate, 
buildings,  warehouses,  wharves,  piers,  and  easements  situate  in  either  the  United 
States  or  abroad  as  may  be  advantageous  for  carrying  on  its  business  ;  to  acquire, 
hold,  and  employ  such  lighters,  steam  tugs,  and  shares  of  incorporated  companies 
owning  the  same  as  may  be  necessary  in  the  said  business  in  the  ports  of  the  United 

874 


FORMS    AND    PRECEDENTS. 


States  and  in  foreign  ports  ;  to  issue  bonds  or  other  evidences  of  indebtedness;  to 
mortgage  the  corporate  franchises,  the  real  and  personal  property  of  the  Conip 

the  vessels  and  steamships  owned  by  it,  the  incomes  and  profits  accruing  to  it,  and 
the  stock,  bonds,  and  other  securities  of  other  corporations  or  companies  owned  by 
it,  to  secure  the  payment  of  any  or  all  of  its  bonds  or  other  evidences  of  indebted] 
in  whole  or  in  part,  by  such  mortgage  or  mortgages,  and  to  sell  and  dispose  of  any 
property,  real  or  personal,  acquired  by  the  said  Company.  The  portion  of  the  busi- 
ness of  the  Company  which  is  to  be  carried  on  out  of  this  State  is  the  transaction 
of  a  general  transportation  business,  in  the  carrying  for  hire  of  passengers  and  mails, 
"■oods,  wares,  merchandise,  animals,  and  other  property  and  materials  of  all  kinds  and 
nature  whatsoever,  upon  steamships  and  other  vessels  to,  from,  ami  between  the 
various  ports  of  the  world,  particularly  between  the  ports  of  New  York  and 
Philadelphia,  and  the  ports  of  Southampton,  Liverpool,  Antwerp,  ami  other  ports 
of  Europe,  and  the  procuring  of  contracts  for,  and  the  making  of  contracts  for  tin- 
employment  and  freighting  of  the  same,  and  to  carry  on  ail  the  business,  and  to 
posses"s  and  exercise  any  and  all  of  the  rights,  powers,  and  privileges  above  specified. 
(6)  To  apply  for,  purchase,  or  otherwise  acquire,  and  to  bold,  own.  use, 
operate,  and  to  sell,  assign,  or  otherwise  dispose  of.  to  grant  licenses  in  respect  of. 
or  otherwise  turn  to  account  any  or  all  inventions,  improvements,  formula,  and 
processes  used  in  connection  with  or  secured  under  Letters  Patent,  Copy  Kiuli 
Trade  Marks  of  the  United  States,  or  elsewhere,  or  otherwise,  and  with  a  view  to 
developing  the  same,  to  carry  on  any  other  business,  whether  manufacturing  or 
otherwise!  which  the  corporation  may  think  calculated  directly  or  indirectly  to 
effectuate  these  objects.  . 

(r)  To  purchase  or  otherwise  acquire,  and  to  hold,  sell,  assign,  transfer,  mort- 
gage, pledge,  or  otherwise  dispose  of,  the  shares  of  capital  stock  or  other  evi- 
dence of  indebtedness  created  by  other  corporation  or  corporations,  and  while  the 
holders  of  such  stock,  to  exercise  all  the  rights  and  privileges  of  ownership,  includ- 
ing the  right  to  vote  thereon. 

(V)  Generally  to  purchase,  take  on  lease  or  in  exchange,  lure,  or  otherwise 
acquire,  any  real  and  personal  property,  and  any  rights,  privileges,  or  franchises 
which  the  corporation  may  think  necessary  or  convenient  for  the  purpose  ot  its 
business, 'and,  in  full,  to  do  any  or  all  things  in  any  part  of  the  world  not  pro- 
hibited by  the  laws  of  Arizona. 

(«?)  To  construct,  lure,  purchase,  and  operate  steamboats  and  other  vessels  o 
tiny  class,  and  especially  the  construction  of  steamboat  hulls  and  barges  alter  and 
upon  the  plans  of  the  new  method  of  composite  construction;  to 

establish  and  maintain  lines  or  regular  services  of  steamboats  or  other  vessels  on 
the  River  and  its  tributaries;  and  generally  to  carry  on  the  husim 

shipowners,  and  to  enter  into  contracts  for  the  carriage  of  mails,  passengers,  goods, 
and  merchandise  by  any  means,  either  by  its  own  vessels,  railways,  and  conveyances, 
or  by  or  over  the  vessels,  conveyances,  and  railways  of  others  ;  to  insure  against  loss 
by  fire,  flood,  or  other  calamity,  the  cargo  carried  or  transported  upon  the  Com- 
pany's  steamboats  or  other  vessels;  to  construct,  purchase,  take  on  lease,  or 
otherwise  acquire  and  work  any  railway  wharf,  pier,  dock,  budding,  or  works 
capable  of  being  advantageously  used  in  connection  with  the  business  ol  the 
Company  as  a  shipping  company,  and  in  connection  with  any  ot  the  objects  aforesaid, 
to  carry  on  the  business  of  a  "railway  company,  railwaj  contractors,  ship  builders, 
engineers,  manufacturers  of  machinery  and  ear  builders;  to  acquire  concessions  or 
licenses  for  I  lie  establishment  and  working  of  lines  of  steamboats  and  other  vessels 
between  any  ports  of  the  world,  or  for  the  formation  or  working  o!  any  railway, 
wharf,  pier,' dock,  or  other  works,  or  for  the  working  of  an\  public  conveyance. 

(/•)  To  build,  make,  operate,  maintain,  buy.  sell,  deal  m  and  with,  own,  lease, 
pledge,  and  otherwise   dispose  of  steamboats   and  vessels  of  every  nature  and   kind 

whatsoever,  together  with  all  materials,  articles,  tools,  machinery,  and  appliances 

entering  into,  or  suitable  and  convenienl  lor  the  construe or  equipment  thereof, 

and  together  with  engines,  boilers,  machinery  and  appurtenances  ol  all  kind-,  ami 

tackle,  apparel,  and    furniture  of  all    kinds;    the    transportation  ..I    goods,  merclian- 

(I,   •  and  passengers  upon  land  or  water,  building,  repairing  and  designing  ho 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

structures,  vessels,  ships,  boats,  wharves,  docks,  dry  docks,  railroads,  engines,  cars, 
machinery,  and  all  other  equipment ;  constructing,  maintaining,  and  operating  rail- 
roads ;  to  build,  construct,  repair,  maintain,  and  operate  water,  gas,  and  electrical 
works,  tunnels,  bridges,  viaducts,  canals,  wharves,  piers,  and  like  works  of  internal 
improvement  or  public  use  or  utility ;  to  own,  operate,  and  maintain  steamboat 
lines,  vessel  lines,  or  other  lines  of  transportation. 

(g)  To  carry  on  the  business  of  cold  storage  and  warehousing  and  all  the 
business  necessarily  or  impliedly  incidental  thereto ;  and  to  further  carry  on  the 
business  of  general  warehousing  in  all  its  several  branches;  to  construct,  hire, 
purchase,  operate,  and  maintain  any  conveyances  for  the  transportation  in  cold 
storage  or  otherwise,  by  land  or  by  water,  of  any  and  all  products,  goods,  or  manu- 
factured articles  ;  to  issue  certificates  and  warrants,  negotiable  or  otherwise,  to 
persons  warehousing  goods  with  the  Company,  and  to  make  advarces  or  loans  upon 
the  security  of  such  goods  or  otherwise ;  to  manufacture,  sell,  and  trade  in  all 
goods  usually  dealt  in  by  warehousemen ;  to  construct,  purchase,  take  on  lease  or 
otherwise  acquire  any  wharf,  pier,  dock,  or  works  capable  of  being  advantageously 
used  in  connection  with  the  shipping  and  carrying  on  of  other  business  of  the  Com- 
pany ;  and  generally  to  carry  on  and  undertake  any  business  undertaking,  transac- 
tion, or  operation  commonly  carried  on  or  undertaken  by  warehousemen,  and  any 
other  business  which  may  from  time  to  time  seem  to  the  Directors  capable  of  being 
conveniently  carried  on  in  connection  with  the  above,  or  calculated  directly  or 
indirectly  to  enhance  the  value  of,  or  render  profitable  any  of  the  Company's  prop- 
erties or  rights. 

(/i)  To  own,  operate,  and  maintain  sugar  plantations,  and  to  grow,  purchase, 
manufacture,  refine,  and  dispose  of  sugar,  molasses,  and  melada,  and  all  lawful  business 
incidental  thereto. 

(i)  To  carry  on  the  business  of  mining,  milling,  concentrating,  converting, 
smelting,  treating,  preparing  for  market,  manufacturing,  buying,  selling,  exchang- 
ing, and  otherwise  producing  and  dealing  in  coal,  gold,  silver,  copper,  lead,  zinc, 
brass,  iron,  steel,  and  in  all  kinds  of  ores,  metals,  and  minerals,  and  in  the  products 
and  by-products  thereof  of  every  kind  and  description,  and  by  whatsoever  process 
the  same  can  be  or  may  hereafter  be  produced ;  and  generally  and  without  limit  as 
to  amount,  to  buy,  sell,  exchange,  lease,  acquire,  and  deal  in  lands,  mines,  and  min- 
eral rights  and  claims,  and  in  the  above  specified  products,  and  to  conduct  all 
business  appurtenant  thereto. 

(?)  The  corporation  shall  also  have  power  to  conduct  its  business  in  all  its 
branches,  and  unlimitedly  to  hold,  purchase,  mortgage,  and  convey  real  and  personal 
property  in  any  State,  Territory,  or  colony  of  the  United  States  and  in  any  foreign 
country  or  place. 

Fifth.  The  affairs  of  this  corporation  shall  be  conducted  by  a  President  and 
Board  of  Directors,  who  shall  be  elected  annually,  as  the  by-laws  shall  provide,  and  a 
voting  power  of  at  least  51  per  cent  of  the  capital  stock  shall  be  pooled,  aud  that  right 
vested  in  the  incorporators  hereof,  and  that  said  right  to  endure  for  the  lifetime  of  the 
Company,  and  the  Board  of  Directors  can  without  further  authorization  make,  alter, 
amend,  and  rescind  the  by-laws,  aud  amend  the  articles  in  any  of  the  particulars 
herein  of  this  Company,  and  to  fix  the  amount  to  be  reserved  as  working  capital. 

Sixth.  This  corporation  is  formed  to  endure  for  twenty-five  years  after  its  art- 
icles are  duly  executed,  but  its  charter  rights  may  be  renewed  before  its  charter 
expires,  from  time  to  time,  for  periods  not  exceeding  twenty-five  years  at  a  time, 
perpetually. 

Seventh.  The  private  property  of  the  stockholders  of  this  corporation  shall  be 
and  is  hereby  made  forever  exempt  from  all  liability  for  its  debts  or  obligations,  and 
there  shall  be  no  individual  liability  on  the  part  of  either  Directors  or  stockholders. 
Eighth.  The  capital  stock  of  this  corporation  shall  be  and  is  hereby  made  full 
paid,  and  forever  non-assessable  by  this  corporation  for  any  purpose.  In  accepting 
property  in  exchange  for  stock  the  judgment  and  appraisal  of  the  Directors  shall  be 
final  and  conclusive. 

Ninth.   The  Board  of  Directors  shall,  as  soon  as  practicable  after  the  organiza- 
tion of  the  Company,  instruct  the  Treasurer  to  set  apart  a  certain  sum  of  money, 
876 


FORMS    AM)    PRECEDES 

at  such  times  as  will  jointly  be  agreed  upon,  which  sum  of  money  shall  be  held  l>v 
the  Treasurer,  as  aud  for  a  Sinking  Fund  to  be  utilized  for  the  replacing  of  any  of  the 
Company's  boats  or  properties  of  anv  description  that  may  meet  with  disaster,  or 
for  general  repairs  in  any  way  upon  the  Company's  holdings  ;  to  anticipate  the 

meutof  any  obligations  which  may  not  be  classed  as  regular  expenses  ;  to  meet  any 
contingency  of  any  kind  and  thus  make  absolutely  certain  at  all  times  the  solvency 

of  the  Company  ;  to  insure  against  loss  the  cargo  transported  upon  the  C pany's 

steamboats  or  other  vessels;  to  apply  to  any  and  all  of  the  things  which  the  Hoard 
of  Directors  may  in  their  right  determine. 

Tenth.    All  stockholders  of  this  Company  shall  have  the  righl  to  inspect  thi 
and  transfer  books  of  this  corporation  in  the  presence  of  the  President   and  Board 
of  Directors,  after  proper  reasons  have  been  given  for  the  requesl  to  so  examine. 

Eleventh.  Should  a  stockholder  so  desire,  a  proxy  can  be  given  to  the  Presi- 
dent or  any  member  of  the  Board  of  Directors,  and  such  person  will  act  for  him  the 
same  as  if  lie  himself  were  present. 

Twelfth.  It  will  not  be  lawful  for  this  Company  to  join  with,  or  pool  its  inter- 
ests with  any  other  corporation  of  any  kind  or  nature  whatsoever,  or  have  as  a 
member  of  its  Board  of  Directors  any  officer  of  any  other  company  ;  thns  stringently 
excluding  a  representative  of  any  shareholder  or  shareholders  of 'a  competing  com- 
pany, or  any  company,  whether  on  laud  or  water,  from  having  any  voice  whatever 
in  the  management  or  direction  of  this  Company. 

Thirteenth.  This  Company  will  not  permit  the  listing  of  the  stock  of  this  cor- 
poration on  any  exchange  created  for  the  sole  purpose  of  the  bartering  and  selling 
of  the  securities  of  corporations. 

Fourteenth.  There  shall  be  no  greater  amount  of  indebtedness  incurred, 
either  directly  or  indirectly,  by  the  Board  of  Directors  of  this  Company,  at  anj  time, 
than  shall  exceed  in  amount  or  be  equal  to  two-thirds  of  the  capital  sfe 

Fifteenth.  Without,  in  any  particular  limiting  any  of  the  objects  and  powers 
of  this  corporation  it  is  hereby  expressly  declared  and  provided,  thai  should  it  be- 
come necessary  and  decided  by  those  in  control,  this  corporation  shall  have  power 
to  issue  bonds  in  payment  for  property  purchased  or  acquired  by  it,  or  lor  anv 
•other  object  in  aud  about  its  business  ;  and  said  bonds  after  issue  and  before  their 
maturity,  can  be  retired  by  the  decision  and  vote  of  a  majority  of  the  holdings  of 
stock,  and  new  certificates  of  stock  can  be  issued  to  the  stockholders  at  par. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals  this  day  of 

,  A.  D.  190  .  ' 
Signed,  scaled,  and  delivered 
in  the  presence  of 


CERTIFICATE   OF  INCORPORATION 

OP 

Coal  Company  (West  Virginia  Charter), 

I.  We,  the  undersigned,  agree  to  become  a  corporation  by  the  name  of 
Company. 

II.  The  principal  place  of  business  and  chief  works  of  said  corporation  shall  be 
located  in  the  county  of  ,  State  of 

III.  The  objects  and  purposes  for  which  said  corporation  is  formed  are  as 
follows : 

To  purchase,  lease,  or  otherwise  acquire,  ami  to  own,  develop,  ami  mine, 
cannel,  bituminous,  and  other  coal  in  the  State  of  and  elsewhere,  ami  to  pur- 

chase, lease,  hold,  and  sell  surface  lands  ami  other  real  estate  necrssarv  in,  or  inci- 
dent to,  said  business,  and  to  buy,  sell,  import,  export,  and  generally  deal  in  eainiel, 
bituminous,  and  other  coal  in  said'Statc  of  and  elsewhere  in  tin-  United  States 

tjr  in  any  foreign  count  rv. 

To  purchase,  lease,  or  otherwise  acquire,  construct,  maintain,  ami  operate  all  nec- 
essary private  railroads,  sidings,  and  tramways,  ami  to  manufacture,  buy,  sell,  import, 
export,  and  generally  deal  in  coke,  wood,  lumber, and  anyand  all  bj  products  of  cannel, 

877 


INCORPORATION    AND    ORGANIZATION    OF  CORPORATIONS. 

bituminous,  and  other  coal,  and  to  purchase,  lease,  build,  sell,  maintain,  and  operate' 
stores,  shops,  warehouses,  dwellings,  and  all  other  buildings  and  structures,  and  to 
buy,  sell,  and  generally  deal,  at  wholesale  or  retail,  in  merchandise  of  all  kinds  and 
descriptions  necessary  or  convenient  for  carrying  on  its  said  business. 

To  purchase  or  otherwise  acquire,  and  to  hold,  sell,  assign,  transfer,  mortgage, 
pledge,  or  otherwise  dispose  of  shares  of  the  capital  stock  and  bonds,  debentures,  or 
other  evidences  of  indebtedness  created  by  other  corporation  or  corporations,  and 
while  the  holder  thereof,  to  exercise  all  the  rights  and  privileges  of  ownership, 
including  the  right  to  vote  thereon. 

To  conduct  its  said  business  and  have  one  or  more  offices,  and  unhmitedly  and 
without  restriction  to  purchase,  hold,  lease,  mortgage,  and  convey  real  and  personal 
property  in  or  out  of  said  State  of  ,  and  in  such  place  and  places  in  the  sev- 

eral States  and  Territories  of  the  United  States,  its  colonial  possessions  or  territorial 
acquisitions,  and  in  foreign  countries,  as  shall  from  time  to  time  be  found  necessary 
and  convenient  for  the  purposes  of  the  business  of  said  corporation. 

IV.  The  amount  of  the  total  authorized  capital  stock  of  said  corporation  shall 
be  dollars  (S  ),  which  shall  be  divided  into  shares  of 
the  par  value  of  dollars  each ;  of  which  authorized  capital  stock  the 
amount  of  dollars  has  been  subscribed,  and  the  amount  of  dollars 
has  been  paid. 

V.  The  names  and  post-office  addresses  of  all  the  incorporators  and  the  number 
of  shares  of  stock  subscribed  for  by  each  are  as  follows  : 

Names.  Post-Office  Addresses.  No.  of  Shares. 

"VI.    Said  corporation  is  to  expire  on  the  day  of 

Given  under  our  hands  this  day  of  ,  A.  D.  190  . 


SUGGESTIONS  RELATIVE  TO  THE  DRAFTING  OF  CHARTERS  AND 
THE  PREPARATION  OF  MINUTES  FOR  THE  ORGANIZATION 
MEETINGS    OF   CORPORATIONS. 

In  presenting  a  few  suggestions  relative  to  the  incorporation  and  organization  of 
corporations  it  is  assumed  that  a  choice  has  been  made  of  some  particular  State  from 
which  a  charter  is  to  be  obtained,  and  that  a  duty  has  been  imposed  upon  the  attor- 
ney of  drafting  the  charter  under  the  laws  of  such  State  and  organizing  the  corpora- 
tion ready  for  the  transaction  of  business  thereunder.  The  suggestions  that  follow 
are  made  more  with  a  view  to  utilizing  to  the  best  advantage  the  forms  and  prece- 
dents to  be  found  in  the  present  work  rather  than  with  the  hope  of  presenting  any- 
thing particularly  new  or  original  along  this  hue. 


THE  DRAFTING  OF  THE  CHARTER. 

First,  ascertain  whether  all  the  purposes  the  insertion  of  which  in  the  charter 
is  desired  by  the  client  may  be  embodied  in  one  charter.  By  reference  to  the 
"  Synopsis  Digest  "  contained  in  Part  II.  of  this  work,  this  question  can  be  readily 
answered.  Next,  turn  to  the  forms  for  charters  of  the  various  States  and  Territories 
found  in  Part  III.  of  the  present  work,  and  make  use  of  the  skeleton  form  therein 
found,  for  drafting  a  charter  under  the  laws  of  the  particular  States  in  which  this 
particular  charter  is  sought.  The  only  clauses  of  the  charter  to  which  particular 
reference  need  be  made  here  are  what  are  known  as  the  "Object  Clause,"  the 
"  Preferred  Stock  Clause,"  and  the  "  Clause  for  the  Regulation  of  the  Internal 
Affairs  of  the  Corporation." 

In  drafting  the  first  of  these,  the  "  Object  Clause,"  reference  should  be  first 
had  to  the  "  Specific  Object  Clauses"  found  in  Part  III.  pp.  613-652, of  this  work. 
Forms  for  drafting  the  more  common  of  such  specific  "Object  Clauses"  will  be 
found  therein.     Next,  it  will  often  be  found  convenient  and  useful  to  add  to  the 

878 


FORMS   AND    PRECEDENTS. 

"  Specific  Object  Clauses"  certain  "General  Object  Cla  h,  for  example, 

as  thoi  a  corporation  to  purchase  and  hold  its 

other  corporations  as  well,  and  to  acquire  patents,  patent  rights,  trade  m 
and  to   hold   real  and  personal  properly  without   limit,  and   to  trausacl   bus 
in  other  States  and  Territories  ami  foreign  countries.     Sometimes,  too,  it  is  of  advan- 
tage to  insert  a  clause  authorizing  the  corporation  to  acquire  an  existing  busim 
to  engage  in  a  general  merchandise  business.     Such  forms  will  also  be  found  iu  Pail 
III.  pp.  653-654,  herein. 

Next, attention  is  called  to  the  "  Preferred  Stock  Clauses,"  forms  forwhicb  will 
be  found  on  pp.  601—662  of  Part  III.  herein.  Iu  connection  with  the  clause  for  the 
regulation  of  the  internal  affairs  of  a  corporation,  attention  should  first  be  directed 
towards  ascertaining  whether  the  insertion  of  such  a  clause  is  permuted  under  the 
e  particular  Commonwealth  from  which  the  charter  is  to  be  procured 
Cxamples  of  such  clauses  will  be  found  on  pp.  654-661  of  Part  III.  herein.  A 
stock  subscription  agreement  should  ordinarily  be  signed  bv  ail  of  the  incorpo- 
rators before  the  articles  of  incorporatiou  arc  signed.  (See  Part  111.  pp. 
835-836.) 

Fiually,  sec  thai  the  requisite  number  of  incorporators  sign  the  articles  and 
acknowledge  their  execution  (when  the  same  is  required)  before  a  notary  public  or 
other  officer  authorized  to  take  acknowledgments.  Iu  some  of  the  States,  notably 
New  Jersey,  if  the  articles  are  acknowledged  without  the  Stale,  a  certificate  must  be 
obtained  certifying  to  the  officer's  due  appointment  as  well  as  to  his  authority  to  take 
such  acknowledgments. 


THE  PROCURING  OF  THE  CHARTER. 

Ordinarily  three  copies  of  the  charier  should  be  prepared:  the  first  of  these 
should  be  signed  and  acknowledged  by  each  of  the  incorporators,  and  becomes  the 
original;  the  second  is  for  the  purpose  of  filing  (when  duly  certified)  in  local  county 
office  (when  the  same  is  required  by  statute),  and  the  third  — alter  being  properly 
certified  —  remains  the  property  of  the  corporation. 

Inmost  of  the  Commouwealths  at  the  time  the  charter  is  presented  to  State 
officials  for  filing  and  recording,  it  must  be  accompanied  by  a  sufficient  remittance 
to  cover  not  only  the  organization  tax  but  the  filing  and  recording  fees  as  well. 
(See  Part  II.  pp.  663-744.)  After  the  certificate  of  incorporation  is  issued  bv  the 
proper  State  officials,  a  certified  copy  thereof  should  (when  the  same  is  required  !>;. 
statute)  be  promptly  filed  in  the  proper  county  office. 


ORGANIZING  THE  CORPORATION. 

(See  Composite  Form  of  Minutes  and  By-Laws,  Pari  111.  pp.  512-524.) 

The  organization  meeting  of  the  corporation  must  be  held  within  the  domiciliary 
State  of  the  corporation  unless  such  meetings  arc  expressly  authorized  by  statute  to 
be  held  without  such  domiciliary  State.  The  most  convenieul  practice  is  lor  the  in- 
c  irporators  to  siumi  a  written  waiver  of  notice  fixing  the  time  and  place  of  the  meet- 
ing. (See  Part  III.  p.  836.)  If  other  stockholders  than  the  incorporators  have 
signed  the  preliminary  stock  subscription  agreement,  thej  also  must  sign  the  written 
waiver  here  referred  to.  The  meeting  organizes  by  the  election  of  a  Chairman  and 
a  temporary  Secretary.  Either  the  charter  itself  (if  one  is  issued)  or,  in  Inn  Lherof, 
a  certified  copy  of  the  certificate  of  incorporation  should  he  preseuted  ami  entered 

at  Length  in  the  minutes. 

The  By-Laws  should  next  be  adopted  section  by  section  and  entered  in  the 
minutes.  If  the  certificate  of  incorporatiou  nanus  the  first  Board  of  Directors,  it 
is  not  necessary  to  elect  anew  Board  at  the  organization  meeting.  Where  suoh 
Directors  are  not  named  in  the  certificate  of  incorporation,  the  nc\i  order  ol 
business  is  the  election  of  Directors      When  required  b    statute  (or  when  nol  re- 

879 


INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS. 

quired,  if  the  incorporators  so  desire),  Inspectors  of  Election  should  be  appointed 
and  sworn.  If  the  persons  so  chosen  as  Directors  are  not  subscribers  to  the 
capital  stock  of  the  corporation,  they  may  become  qualified  either  by  subscribing  for 
stock  or  by  having  one  of  the  incorporators  who  is  a  subscriber  to  the  capital  stock 
assign  his  stock  subscription  to  them.     (See  Part  III.  pp.  816—817.) 

If  it  is  the  intention  of  the  corporation  to  take  over  certain  property  (either  real 
or  personal)  in  exchange  for  its  capital  stock,  the  following  suggestions  may  be 
made  :  Let  some  party  who  is  not  an  officer  or  director  in  the  corporation  offer  to 
enter  into  an  agreement  with  the  latter  relative  to  the  sale  of  such  property  for 
stock.  (See  Part  III.  pp.  836-837-)  Then  draft  the  minutes  of  the  incorporators' 
meeting,  so  that  provision  is  made  for  the  acceptance  of  such  offer  in  exchange  for 
a  certain  specified  number  of  shares  in  the  corporation.  The  resolution  thus  passed 
may  be  so  framed  as  to  operate  as  a  payment  of  the  capital  stock  subscribed  for  by 
the  incorporators.  (See  Part  III.  pp.  820-821.)  Under  this  resolution  the  matter 
is  referred  to  the  Board  of  Directors  for  more  formal  action.  The  Board  may,  if 
it  sees  fit,  authorize  the  execution  of  a  formal  agreement  covering  the  transfer  of 
such  property  for  stock  in  substantially  the  form  set  forth  in  Part  III.  pp.  837-838. 
This  secures  the  issuance  of  the  capital  stock  either  in  whole  or  in  part  as  full-paid 
and  non-assessable,  providing  the  Directors  in  appraising  the  property  are  not  guilty 
of  fraud  or  gross  overvaluation  in  appraising  the  same.  Next,  if  it  is  desired  to  place 
some  of  this  stock  so  that  it  may  be  sold  to  procure  working  capital  for  the  corpora- 
tion, the  party  to  whom  it  is  issued  may  transfer  the  same  in  trust  to  the  corporation 
for  that  purpose.  (See  Part  III.  p.  838.)  This  stock,  when  so  transferred,  can  be 
sold  under  the  order  of  the  Board  of  Directors  of  the  Corporation,  at  such  times 
and  for  such  prices  as  they  may  deem  proper ;  and  parties  purchasing  such  stock 
will  then  receive  the  same  free  from  any  future  liability  for  unpaid  instalments 
thereon,  even  though  they  have  purchased  such  stock  at  considerably  less  than  par. 

The  seal  of  the  Company  should  be  adopted  at  this  meeting.  It  is  not  neces- 
sary for  the  incorporators  to  be  present  in  person  at  the  meeting.  They  may  all  be 
represented  by  proxy  if  desired.  Immediately  after  adjournment  of  the  incorpora- 
tors' organization  meeting,  or  later  if  more  convenient,  the  Directors  should  meet 
pursuant  to  a  written  waiver  of  notice  signed  by  all  of  them  fixing  the  time  and  place 
of  such  meeting.  (See  Part  III.  p.  822.)  The  Board  then  proceeds  to  elect  such 
officers  of  the  Company  as  are  provided  for  in  the  By-Laws  adopted  at  the  incor- 
porators' meeting.  If  the  By-Laws  provide  for  an  Executive  Committee,  they  should 
be  appointed  at  the  same  time  the  officers  are  elected.  A  form  of  stock  certificate 
should  also  be  passed  upon  and  approved,  and  the  Secretary  given  authority  to  pro- 
cure necessary  stock  certificates,  corpoi'ate  books,  seal,  etc.  It  will  be  found  con- 
venient at  this  meeting  to  pass  a  resolution  authorizing  the  opening  of  a  bank  account 
designating  the  bank  therein  and  the  officers  of  the  corporation  by  whom  checks 
and  drafts  shall  be  signed.  (See  Part  III.  pp.  818-819.)  Where  it  is  necessary  to 
provide  for  the  maintaining  of  the  domiciliary  office  for  the  corporation  or  the 
appointment  of  a  registered  asrent,  this  should  be  attended  to  at  the  first  meeting 
of  the  incorporators  and  Directors.  The  form  for  the  proper  resolutions  relative  to 
this  matter  to  be  passed  at  the  incorporators'  meeting,  will  be  found  on  page  775, 
ante.  Such  resolutions  should  properly  be  followed  by  action  taken  at  the  directors' 
meeting,  to  the  following  effect.  The  Board  of  Directors  at  their  organization 
meeting;  should  pass  the  following  resolutions  : 

"RESOLVED,  that  in  compliance  with  the  laws  of  and  the  certificate 

of  incorporation  of  the  Company,  the  principal  (or  registered)  office  of  the  Company 
be  established  aud  maintained  at  the  office  of  ,  in  the  city  of  , 

and  that  a  sign  with  the  Company's  name  thereon  be  conspicuously  displayed  at  the 
entrance  of  said  office ;  and  be  it  further  (to  be  passed  only  wThere  the  incorpora- 
tion act  specificallv  requires  it). 

"  RESOLVED,  that  the  President  of  the  Company  be  and  he  hereby  is  authorized 
and  directed  to  execute  in  the  name  of  and  on  behalf  of  said  corporation  the  state- 
ment required  to  be  filed  by  domestic  corporations  under  the  provisions  of  the 
statutes  of  the  State  of  in  such  case  made  and  provided  and  attach  the  seal 

of  the  corporation  thereto,  and  in  such  statement  to  designate  ,  a  resident 

880 


FORMS   AXD    PRECEDENTS. 

of  the  State  of  ,  residing  and  having  his  office  at  No.  ,  Street 

in  the  City  of  ,  State  of  ,  as  the  person  upon  whom  process  against 

the  corporation  may  be  served  within  the  State  of  .  and  further  to  do  all 

acts  and  things  necessary  to  comply  with  the  statutes  of  said  State  in  such  case 
made  and  provided." 

The  issuance  of  stock  in  exchange  for  property  should  be  provided  for  bj  reso- 
lution in  accordance  with  the  terms  of  a  similar  resolution  passed  by  the  incorpo- 
rators at  their  organization  meeting.  If  the  stock,  is  to  be  paid  for  in  cash,  a 
resolution  substantially  in  the  following  form  should  be  passed  by  the  Board,  to  wit  : 

"RESOLVED,  that  an  assessment  be,  and  the  same  hereby  is.  made  of 
dollars  per  share  from  the  amount  unpaid  upon  the  shares  of  the  capital  stock  of  the 
Company,  and  that  the  same  be  paid  to  the  Treasurer  of  the  Company  on  or  before 
the  day  of  ,  190  ." 


881 


ORGANIZATION*   TAXES. 


TABLE   I. 


TABLE   OF  ORGANIZATION   TAXES    PAYABLE    CJPON 
INCORPORATION. 

Capitalization. 


"8* 


m 

Alabama 
Alaska 

Arizona 

Arkansas 
rnia 

Colorado 

Connecticut 

Delaware 

Dist.  of  Col. 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

-Montana 

Nebraska 

Nevada 

N.  Hampshire  1 
(Non-resident  > 
corporations    ) 

New  Jersey 

New  Mexico 

New  York 

N.  Carolina 

North  Dakota 

Ohio 

(  iklahoma 

Oregon 

Pennsylvania 

Philippines 

Porto  Rico 

Rhode  Island 

South  Carolina 

South  Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

\V<  -i   \  ir^inia  \ 

Resident        [ 

Non-resident ) 

insin 

Wyoming 


S5.00        5.00      25.00 

Merely  filing  fees. 

Merely  filing  fees. 

25.00      25.00      40.00 

15.00 

20.00 


50.00  100.00  200.00   500.00  1,000.00  5,000.00 


15.00 

20.00 


15.00 
20.00 
25.00 
10.00 
25.00 
5.00 

No  organization  tax 
25.00      25.00      25.00 

10.00 

50.00 

10.00 


25.00  25.00 

10.00  10.00 

25.00  25.00 

10.00  50.00 


10.00 
30.00 
10.00 
25,00 
10.00 

2.00 
25.00 
10.00 

2.50 
25.00 

5.00 
50.00      50.00 
20.00      20.00 
50.00      50.00 


10.00 
70.00 
25.00 


25.00      40.00 
10.00      25.00 


5.00 
25.00 
10.00 

6.25 


25.00 
25.00 
50.00 
31.25 


20.00      20.00 


10.00 
10.00 


25.00  25.00 
5.00  12.50 
50.00 
40.00 
50.00 
20.00 


10.00      20.00 
10.00      10.00 


65.00 
25.00 
20.00 
25.00 
10.00 
25.00 
100.00 

25.00 
20.00 
95.00 
50.00 
65.00 
50.00 
50.00 
25.00 
50.00 
62.50 
25.00 
25.00 
50.00 
60.00 
50.00 
25.00 
50.00 
10.00 


115.00  215.00 

50.00  50.00 

30.00  50.00 

50.00  100.00 

10.00  20.00 

40.00  80.00 

200.00  250.00 


515.00  1,015.00 
75.00   100.00 


110.00 

250.00 

50.00 


210.00 
500.00 
100.00 


200.00   400.00 
250.00   250.00 


25.00 

40.00 

145.00 

100.00 

115.00 

100.00 

loo.oo 

25.00 

50.00 

125.00 

50.00 

50.00 

75.00 

100.00 

75.00 

50.00 

50.00 

10.00 


40.00 

60.00 

245.00 

200.00 

215.00 

150.00 

200.00 

25.00 

50.00 

250.00 

100.00 

100.00 

125.00 

200.00 

125.00 

90.00 

100.00 

20.00 


100.00 

60.00 

545.00 

500.00 

515.00 

300.00 

500.00 

25.00 

50.00 

625.00 

250.00 

250.00 

275.00 

250.00 

275.00 

185.00 

250.00 

50.00 


200.00 

100.00 
1,045.00 
1,000.00 
1,015.00 

550.00 

1,000.00 

25.00 

100.00 
1,250.00 

500. oo 
500.00 

5  25.  OO 
250.00 

525.00 
285.00 
500.00 

100.00 


500.00 
1,010.00 
2,500.00 

350.00 
2,000.00 

250.00 

1,000.00 

150.00 

5,045.00 

5,000.00 
5,015.00 

2.550.00 
5,000.00 

500.00 
6,250.00 
2,500.00 
2,500.00 
2,525.00 

250.00 
2,525.00 

685.00 
2,500.00 

500.00 


25.00 

25.00 

25.00 

25.00 

25.00 

25.00 

1.00 

2.50 

12.50 

25.00 

25.00 

25.00 

25.00 

25.00 

25.00 

10.00 

10.00 

25.00 

3.00 

5.00 

25.00 

10.00 

10.00 

20.00 

6.66 

16.66 

83.33 

The  organization  tax  is 

25.00 

25.00 

25.00 

100.00 

100.00 

100.01) 

5.00 

5.00 

25. 00 

10.00 

10.00 

10.00 

2.00 

5.00 

25.00 

50.00 

50.00 

70.00 

.50 

1.25 

6.25 

10.00 

10.00 

50.00 

10.00 

10.00 

IO0O 

25.00 

25.00 

25.00 

25.00 
25.00 
25.00 
25.00 

50.00 


25.00 
25.00 
50.00 
25.00 

75. oo 


50.00  100.00 

50.00  loo  on 

25.00  35.00 

166.66  333.33 

25  pesos.   \n\ 

25.00  25.00 

100.00  100.00 

50.00  loooo 

15.00  16.00 

50.00  loooo 

120  00  170. oo 

12.50  26.00 

50110  loooo 


10.00 
25.00 


20  oo 

25.00 


40.00 
25.00 

100.00 
40.00 

125.00 

200.00 
200.00 

45.00 
666.66 
capital 

30.00 

200.00 

[50.00 

20. oo 

200.00 

270.00 

51 1.00 

100.00 

40.00 

25.00 


100.00 

50.00 
250.00 

100.00 
275.00 
500.00 
500  00 

I 0 

1,666.66 
isation. 

75  00 
500.00 
30 i 

20.00 
500.00 
570.00 
125.00 
200.00 
100.00 

25.00 


200.00 
100.00 

50 i 

200.00 
525.00 

l.ooo  no 
l.(MMUM) 

75.00 
3,333.33 

150.00 

550  oo 
30.00 

1,00 

l  071 

250  110 

31 I 

600.00 
25.00 


l.ooo 

51  ii  i 

2.500 

1,000 

2,525 

5.000 
5. ooo 

875 
16,666 

5(H) 

5,000 

1 10 

5. ooo 

5 1  M  I 

600 


>~  3 
3° 

15.00 
12.00 

1 1.00 
3.00 

25.00 

27.50 

5.00 
7.00 

21.00 

i 

18.1  ) 
15.00 


10.00      10.00      10.00      25.00      25.00      50.00         50.00      100.00        200.00  6.00 


18.00 

12  00 

i      ■ 

5.00 
OON  m  inal 

oo         i     I 

OO  i 


3.00 


10.00  10.00  20.00  25.00  50.00  75.00 

15.00  15.00  20.00  -fooo  50.00  75.00 

25.00  25.00  25.00  50.00  100.00  200(H) 

5.00  5.00  10.00  10.00  looo  15.00 


120.00  170.00  410.00 

I" 0  27  i  00  72  ■  00   38.00 

500.00  l.ooo. ihi  5,000.00 

30.00  55.00  265.00       15.1  i 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 


TABLE   II. 

TABLE   OF  ANNUAL   FRANCHISE   TAX  UPON 
DOMESTIC   CORPORATIONS. 

Capitalization. 


Alabama 

$10.00 

25.00 

50.00 

75.00 

125.00 

175.00 

275.00 

525.00 

1,525.00 

Alaska 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Arizona 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Arkansas    ] 

5.00 

12.50 

25.00 

50.00 

100.00 

150.00 

250.00 

500.00 

2,500.00 

California 

10.00 

20.00 

20.00 

25.00 

50.00 

75.00 

75.00 

100.00 

200.00 

Colorado 

0.20 

0.50 

1.00 

2.00 

4.00 

6.00 

10.00 

20.00 

100.00 

Connecticut 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Delaware 

5.00 

5.00 

10.00 

10.00 

20.00 

20.00 

25.00 

50.00 

150.00 

Dis.  of  Col. 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Florida 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Georgia 

5.00 

10.00 

15.00 

15.00 

25.00 

25.00 

50.00 

75.00 

100.00 

Hawaii 

2%  upon  net  income  of  the  corporation. 

Idaho 

12.50 

15.00 

22.50 

37.50 

52.50 

75.00 

75.00 

90.00 

150.00 

Illinois 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Indiana 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Iowa 

1.00 

1.00 

1.00 

1.00 

1.00 

1.00 

1.00 

1.00 

1.00 

Kansas 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Kentucky 

10.00 

10.00 

15.00 

30.00 

60.00 

90.00 

150.00 

300.00 

1,500.00 

Louisiana 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Maine 

5.00 

5.00 

5.00 

10.00 

10.00 

50.00 

50.00 

75.00 

275.00 

Maryland 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Massachusetts 

10.00 

25.00 

50.00 

100.00 

200.00 

300.00 

500.00 

1,000.00 

5,000.00 

Michigan 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Minnesota 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Missisippi 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Missouri 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Montana 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Nebraska 

5.00 

10.00 

20.00 

30.00 

50.00 

75.00 

75.00 

100.00 

200.00 

Nevada 

none 

.none 

none 

none 

none 

none 

none 

none 

none 

N.  Hampshire 

none 

none 

none 

none 

none 

none 

none 

none 

none 

New  Jersey 

10.00 

25.00 

50.00 

100.00 

200.00 

300.00 

500.00 

1,000.00 

4,000.00 

New  Mexico 

none 

none 

none 

none 

none 

none 

none 

none 

none 

New  York       \ 

(On  basis  of  ( 

6  per  cent      ( 

15.00 

37.50 

75.00 

150.00 

300.00 

450.00 

750.00 

1,500.00 

7,500.00 

dividend)       ' 

North  Carolina 

5.00 

5.00 

5.00 

10.00 

25.00 

50.00 

100.00 

200.00 

500.00 

North  Dakota 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Ohio 

10.00 

25.00 

50.00 

100.00 

200.00 

300.00 

500.00 

1.000.00 

5,000.00 

Oklahoma 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Oregon 

15.00 

20.00 

30.00 

50.00 

70.00 

100.00 

100.00 

125.00 

200.00 

Pennsylvania 

50.00 

125.00 

250.00 

500.00 

1,000.00 

1,500.00 

2,500.00 

5,000.00 

25,000.00 

Philippines 

No  annual  license  tax. 

Porto  Rico 

No  annual  license  tax. 

Rhode  Island  (A) 

4.00 

10.00 

20.00 

40.00 

80.00 

120.00 

200.00 

400.00 

2,000.00 

South  Carolina 

5.00 

12.50 

25.00 

50.00 

100.00 

150.00 

250.00 

500.00 

2,500.00 

South  Dakota 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Tennessee 

5.00 

5.00 

10.00 

20.00 

30.00 

50.00 

100.00 

150.00 

150.00 

Texas 

10.00 

12.50 

25.00 

50.00 

100.00 

150.00 

250.00 

500.00 

1,500.00 

Utah 

5.00 

10.00 

15.00 

25.00 

40.00 

50.00 

50.00 

50.00 

50.00 

Vermont 

10.00 

10.00 

10.00 

15.00 

25.00 

35.00 

50.00 

50.00 

50.00 

Virginia 

15.00 

20.00 

30.00 

55.00 

80.00 

80.00 

125.00 

225.00 

625.00 

Washington 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

W.  Virginia      1 

Resident          > 

15.00 

20.00 

25.00 

50.00 

75.00 

90.00 

120.00 

170.00 

410.00 

Non-resident ) 

15.00 

20.00 

30.00 

50.00 

75.00 

100.00 

150.00 

275.00 

725.00 

Wisconsin 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Wyoming 

none 

none 

none 

none 

none 

none 

none 

none 

none 

Note  A     In  Rhode  Island  the  annual  license  tax  is  known  as  an  excess  tax.     (See  pages  530-533.) 

884 


>NS. 


$1,000,000 

$5,000,000 

APPROXI- 

M  \  1 1: 

ORIG 

AL 

ORIGINAL 

IWUAL 

ORIGINAL 

ANNUAL 

SINDKT 

LICE 

8E 

LICENSE 

LIl  1 

HI  , 

LIi   1 

ma 

TA 

TAX 

T.AX 

i  a 

1  A\ 

Alabama  

$71 

DO 

$1009.00 

$525.00 

$5069.00 

1 1 525.00 

Nominal 

Alaska  

N.. 

Nominal 

Arizona   

N-  • 

$40.00 

Arkansas  

25P0 

1015.00 

500.00 

5015.00 

2500.00 

1.00 

California 

15 

)0 

100.00 

100.00 

500.00 

200.00 

10.00 

Colorado  

30 

X) 

315.00 

20.00 

1515.00 

100.00 

12.00 

Connecticut  . . . 

N 

Delaware   

T 

N 

Florida 

5 

250.00 

250.66 

5.00 

Georgia 

W 

75.00 

100.00 

1.00 

Hawaii 

50 

X) 

50.00 

250.00 

50.00 

1250.00 

Nominal 

Idaho  

10 

X) 

100.00 
1045.00 

90.00 

150.00 
5045.00 

150.00 

10.00 

Illinois 

30  ■ 

7.00 

Indiana 

25 

1015.00 

5015.00 

5.00 

Iowa 

25p0 

10,. 
10)0 

1015.00 
550.00 
300.00 

1.00 
300.00 

5015.00 
2550.00 
1500.00 

1.00 
1500.00 

5.00 

Kansas    . . . 

27.50 

Kentucky  

5.00 

Louisiana 

No  rati 

ons 

Maine  

10)0 
25)0 

20.00 
25.00 

20,00 
375.00 

20.00 
25.00 

10.00 
1375.00 

None 

Maryland 

Nominal 

Massachusetts  . 

25)0 

500.00 

1000.00 

2.500.00 

5000.00 

Nominal 

Michigan 

25,- 

500.00 

2500.00 

5.00 

Minnesota 

50,. 

525.00 

2525.00 

5.00 

Mississippi 

20,- 

250.00 

250.00 

15.00 

Missouri 

60  • 

535.00 

2535.00 

3.00 

20te  A 
10)0 

285.00 

See  Note  A 

685.00 

See  Note  A 

5.00 

Nebraska  

100.00 

100.00 

500.00 

200.00 

5.00 

Nevada 

10,. 

100.00 

500.00 

10.00 

N.  Hampshire  . . 

No  li  ■ 

The  ,  • 

N.  Mexico 

25  • 

100.00 

500.00 

22.00 

N.  York   

L'.e  B 

1250.00 

See  Note  B 

6250.00 

Sec  Note  B 

11.00 

N.  Carolina   . .  . 

10)0 

100.00 

200.00 

100.00 

500.00 

5.00 

No  li  • 

25.00 

Ohio 

See  N  • 
3,. 

1000.00 

5000.00 

Nomina] 

Oregon  

50)0 

50.00 

125.66 

50.00 

200.00 

5.00 

Pennsylvania  . . 

6)0 

3000.00 

5000.00 

15000.00 

25000.00 

1(175 

Philippines   

50  po  • 

NllllllIKll 

Porto  Rico  

25JK> 

25.00 

25.00 

25.00 

25.00 

Nominal 

Rhode  Island  . . 

SeeNW 

400.00 

2000.00 

1.50 

S.  Carolina  .... 

....»<) 

500.00 

2500.00 

15.00 

No  li  • 

Tennessee 

50P0 

750.00 

150.00 

1500.00 

1 50.00 

40.00 

Texas 

511.)') 

L040.00 

460.00 

5040.00 

860.00 

Nominal 

Utah         

()») 

250.00 

50.00 
50.00 

125.00 

50.00 
50.00 

11.00 

1 .01) 

VlKI.I.NIA     

30P0 

600.00 

225.00 

LOOO.OO 

625.00 

Nominal 

Washington  . . . . 

25P0 

25.00 

L5.00 

25.00 

15(10 

5.1)0 

W.  Virginia 

See  V 

Wisconsin 

25,  • 

LOOO.OO 

5001 

Nominal 

Wyoming 

5  • 

55.00 

255.00 

3  50 

\'nl 

\,,|i.s. 

See  ante,  \ 

16  ;. 

64. 

N  i .  i 

Noi 

No 

• 


TABLE  III. 

STATEMENT   OF   ORGANIZATION   TAXES   IMPOSED  UPON  FOREIGN    CORPORATIONS. 

Capitalization. 


$2,000 

$5,000 

$25,000 

$50,000 

$100,000 

$200,000 

$500,000 
omonui.       omui 

$1,000,000 

$5,000,000 

"ES* 

871.00     1       $2.00 

$74.00 

85.00 

S94.O0 

$25.00 

S119.00 

(5 1 

S69.O0 

$75.00 

$261.00 

8125.00 

$569.00 

$275.00 

S10G9.00 

$525.00 

85069.00 

*  1.52.5 .00 

Nominal 

No  license  tax  imposed 

Nominal 
$40.00 

1  IK) 

Arizona  

No  license  tax  imposed 

12.50 

65.00 

.'.-.on 

115.00 

;,li  no 

215.00 

100.00 

515.00 

250.00 

1015.00 

500.00 

.501.-,  on 

2511111111 

California 

20.00 

25,00 

20.1111 

.-,o.i»i 

25.00 

50.00 

511.00 

75.00 

30.00      |        0.04     |     30.00 

0.10 

30.00 

0.50 

30.00 

1.00 

45.00 

2.00 

4.00 

165.00 

10.00 

Connecticut  . . . 

No  license  lax  imposed 

The  retaliatory  6ystem  of  taxation  is  in 

force  in  Delaware 

No  license  tax  imposed 

100.00 

200.66 

250.00 

250.00 

250.00 

250.00 

5.00 

fi.OO 
150.00 
10.00 

1.00 

15.00 

25.00 

50.00 

S0.00 
10.00 
30.00 
25.00 
25.00 
10.00 

50.00 

l 

50.00 
25.00 
25.00 
10.00 

150.00 
10.00 

1.00 

50.00 
10.00 
70.00 
40.00 
40.00 
25.00 
10.00 

150.00 
15.00 

1.00 

io.oo 

50.00 
20.110 
95.00 
65.00 
65.00 
50.00 
15.00 

150.00 
22.50 

1.00 
15.00 

50.00 
40.00 
145.00 
115.00 
115.00 
100.00 
30.00 

150.00 
37.50 

1.00 
30.00 

50.00 
60.00 
245.1X1 
215.00 
215.00 
150.00 
00.00 

50.00 
52.50 

1.00 
60.00 

50.00 
60.00 
545.00 

575.00 
515.00 
300.00 
150.00 

150.00 

75.00 

1.00 
150.00 

50  00 
100.00 

nil.-,  on 
1015.00 
1015.00 
550.00 
300.00 

90.00 

1.00 
300.00 

1.50.00 

5iil." 

.•,01.5  Illl 

5015.00 
2660.00 

1500.00 

1.511  00 
1.00 

1.- I 

Nomina] 
10.00 

7.00 
5.00 
5.00 
27.50 
5.00 

Indiana 

No  lice 
10.00 
2.5.1 10 
25.00 
25.00 
50.00 
20.00 
60.00 
20.00 
10.00 
10.00 

ise  tax  imp 
10.00 
25.00 
2.00 

See  Note  A 
5.00 

sed.    A  1 
20.00 
25.00 
25.00 
25.00 
50.00 
20.00 
00.00 
20.00 
10.00 
10.00 

cense  tax  i 
10.00 
25.00 
5.00 

See  Note  A 
5.00 

imposed  L 
20.00 
25.00 
25.00 
25.00 
50.00 
40.00 
60.00 
20.00 
10.00 
10.00 

pon  gross 
10.00 
25.00 
25.00 

See  Not,. A 
10.00 

eceipts  of  r 
20.00 
25.00 
25.00 
25.00 
50.00 
60.00 
60.00 
25.00 
10.00 
10.00 

lanutactui 
10.00 
25.00 
50.00 

SeeNoteA 
20.00 

ng  corpor; 
20.00 
25.00 
50.00 
50.00 
75.00 
110.00 
S5.00 
50.00 
10.00 
10.00 

tions  and  the  gn»s  annual  >:ilcs  ot  mercant 
10.00          20.00           10.00         20.00 
50.00          25.00         100.00         25.00 
100.00        100.00        200.00       250.00 

100.00         250.00 

125.00         275.00 

210.00         250.00 

135.00         2S5.00 

■ie,     Nntc   A         ' 0     S,.„   .\„t,.  .\      1^500 

30.00          20.00          50.00         50.00 
20.00         50.00 

le  corporations 

10.00           20.00 

250.00           25.00 

500.00         500.00 

500.00 

525.00 

250.00 

53.5.00 

See  Note  A       2S.5.O0 

75.00          10000 

100.00 

20,00 
375.00 
1000.00 

100.00 

20.00 
25  011 
2.500.OO 
251 II  inn 
2.525,00 
2.50.00 

2.5:;.-.  iiii 
685.00 
500.00 
500.00 

in  no 

175.00 

5000.00 

3ee  \ \ 

200.00 

None 
Nomina] 

.5.00 
.5.00 

15.00 
3.00 
5.00 
5.00 

10.00 

Maryland 

Massachusetts 

Michigan 

Minnesota    , 

Mississippi 

Missouri 

Montana   

No  license  taxes  imposed 

N.York  

The  retaliatory  system  of  taxat 
25.00      |                    1    25.00 
2. :.n      jSeeNoteB       6.25 
10.00      1         5.00     1     10.00 

on  is  in  for 

SecNulelt 
5.00 

■e  in  New ., 
25.00 
31. 25 
10.00 

ersey 

SeeNoteB 
5.00 

25.00 
62.50 
10.00 

SeeNoteB 
10.00 

25.00 
125.00 
10.00 

25.00 
50.00 
2000 

See  Note  D 
50.00 

50.00 
025.00 
50.00 

- 

10O.IIII 

100.00 
12.50.00 
100.00 

BeeNote  1' 
200.00 

500.00 

62,50  no 
100.00 

s,,,.  Note  11 
500.00 

22.00 
11.00 
5.00 

N.  Dakota 

No  license  taxes  imposed 

See  Note  CI              .      1  

3.00                                5.00 
50.00            10.00          50.00 
6.00     1       10.00     1     15.110 

10.00 
50.00 

'  25.00 
50.00 

75.011 

20.00 
125.00 

'  50.00 
.-.imiii 
150.00 

30.00 
250.00 

100.00 

50.00 
500.00 

200.00 
50.00 
600.00 

70.00 

1000.00 

500.00 
60.00 

1.5 II 

100.00 
2500.00 

1000.00 

.5111111 
3000.00 

125.00 

5000.00 

5000.00 

50.00 

15000  00 

200.00 

25000.00 

Nomina] 
5.00 

10.75 

Philippines   . . . 
Porto  Rico  . . . 
Rhode  Island  . 
S.  Carolina  . . 

50  pesos  original  tax.    No  annu 
25.00      1       25.00     1     25.UO 
Sec  Note  E         0.80          ... 
|         5.00      | 

ll  license  t: 
25.00 
2.00 
5.00 

X 

25.00 

25.00 
10.00 
12.50 

25.00 

25.00 
20.00 
25.00 

25.00 
40.00 
50.00 

2.5  .(X) 

25.00 
80.00 

loo.oo 

25.00 

25.00 

200  00 
250.00 

25.00 

25.00 
400.00 
500.00 

25.00 

25.00 
2000.00 
2500.00 

Nomina] 

1.50 
15.00 

S.  Dakota 

Tennessee  .... 

No  license 

6 1 

50.00 
0.50 

30.00 
25.00 

taxes  imp. 

5.00 
25.00 

5.00 

1 1 

15.00 
15.00 

sed 

50.00 
50.00 
1.25 

30.00 

25.00 

5.00 
25.00 
10.00 
10.00 
15.00 
15.00 

'  50.66 

70.00 
6.25 

30.00 
25.00 

5.00 

25.00 
10.00 
10.00 
20.00 
15.00 

'  50.66 



12.50 

30.00 
25.00 

10.00 

50. 

15.00 

10.00 
30  00 
15.00 

100.00 

11 

25.00 

60.00 

25.00 

20.00 

100.00 
25.00 
15.110 
55.00 
15.00 

200.00 
210.00 
50.00 

120.00 

25.00 

30.00 

1 

lHIIII 

25.00 
80.00 

15.00 

400.00 

-.liiiiii 
125.00 

301 

25.00 

100.00 
280.00 

.50.00 
50.00 

12-5  011 
1.5.00 

750.00 

11 10 

250.00 

66 

2.5.00 

150.00 
160.00 

50.00 
50,00 
22.5.00 
15.00 

1500.00 

511111, HI 

125.00 

1000.00 

25  no 

150.00 
800.00 
50  0(1 
50.00 
625.00 
15.00 

40.00 

Nominal 
11  IK) 

4.00 
Nominal 

5.00 

Utah    

Vermont  

Virginia   

Washington  . . . 

W.  Virginia  . . . 
Wisconsin  , ... 
Wyoming    , 

See  Note  D 
26.00 
5.00 

25.00 
5.00 

25.00 
10.00 

50.00 
10.00 

1 i 

10.00 



200.00 
1.5.00 

500.00 
30.00 

1000.00 

55.00 



5i«ii 

2.55110 

Nominal 

3.50 

Note  A.  —  Five  dollars  must  be  paid  annually  for  filing  annual  reports. 

Note  B.  —  In  New  York  foreign  corporations  pay  an  annual  license  tax  imposed  at  the  s 

Note  C.  — For  Ohio  tax  on  forei-n  corporations  see  p'ages  189-491. 

Note  D.  —  For  West  Virginia  tax  on  foreign  corporations  see  pages  597-599. 

Note  E.  —  In  Rhode  Island  the  annual  license  tax  is  known  as  au  excess  tax. 


i  basis  as  domestic  corporations.    See  ante,  pages  I'M.  !M 


GENERAL  INDEX. 


[The  references  are  to  pages.] 


A. 

ABANDONMENT, 

non-user  of  corporate  franchise  as  a  ground  for  forfeiture  .     .  158-159 

of  corporate  powers 158-159 

suspending  ordinary  business 159 

ABSENT   STOCKHOLDERS, 

may  vote  by  proxy 49,  1 ;  1 1 

ACCEPTANCE, 

by  State  of  surrender  of  charter .155 

necessity  of  acceptance  of  resignation  of  directors      ...  .     101 

ACCEPTING   BENEFIT, 

in  its  relation  to  doctrine  of  estoppel .     .       03 

ACCOUNT   BOOKS.     (See  Books  of  Account.) 

ACKNOWLEDGMENT, 

of  certificate  of  incorporation .     .      79-80 

ACQUIESCENCE, 

effect  of 64 

ACTIONS, 

by  creditors 142-148 

by  State  to  enforce  forfeiture  of  charter 157-158 

by  stockholders 156   L57 

for  assessments 149 

ADOPTION.     (See  Ratification.) 

ADOPTION   OF   BY-LAWS 99-100 

by  directors 75 

ADVANTAGES, 

of  corporate  organization 4-5 

AFFIDAVIT, 

anti-trust M 

as  to  amount  of  stock  paid  in 7 L'  7  ; 

subscribed Bl 

as  to  payment  of  stock 

as  to  publication 80 

AGENT, 

appointment  of 180 

certificate  of  appointment  of L80 

service  of  process  upon L8Q 


GENERAL   INDEX. 

AGREEMENTS, 

to  consolidate 77 

voting  trust 103 

ALIENATION, 

of  franchise  of  being  a  corporation  not  permitted 51-52 

power  of,  by  corporations 51-52 

ALIENS, 

may  be  directors 101 

may  become  incorporators 13 

ALTERATION, 

of  by-laws 100 

of  charter 46,  145-152 

of  name 41 

of  number  of  directors 46 

of  par  value  of  shares 57 

AMBIGUITIES, 

in  corporate  grant  is  resolved  in  favor  of  public 77-7S 

AMENDMENT, 

change  of  capitalization 41 

corporate  agent 47 

domiciliary  office 42 

duration  of  corporate  existence 40-41 

name 41 

number  of  directors 46 

par  value  of  shares 57 

place  of  business 47 

powers 56-57 

purposes  46,  145-152 

decrease  of  capital  stock 41 

increase  of  capital  stock 41 

of  charter  by  directors 146 

stockholders 145-152 

of  charters 145-152 

before  organization 58 

AMOTION, 

of  directors 60-61 

of  officers •      60-61 

AMOUNT, 

limitations  upon  amount  of  capital  stock 69-70 

of  stock  paid  in 72 

subscriptions 70-71 

with  which  a  corporation  may  begin  business     ....       73 
ANNUAL   LICENSE    TAX, 

upon  foreign  corporations 199-20- 

ANNUAL    MEETING, 

date  of 74 

place  for  holding 4(J 

ANNUAL   REPORTS.     (See  Reports.) 

ANTI-TRUST    AFFIDAVIT 81 

ANTI-TRUST    LEGISLATION 167-168 

890 


GENERAL    INDEX. 

APPLICATION    FOR   CHARTERS, 

form  of 80 

refusal  of gfl 

APPOINTMENT, 

of  executive  committee 107-108 

of  resident  agent [QO 

APPRAISAL   OF   PROPERTY, 

by  directors L87-I38 

by  Stute  officials 139-141 

taken  by  a  corporation  in  exchange  for  capital  sluck       .      .      .  137-13S 
ARTICLES  OF   AGREEMENT, 

purpose  of 10 

ARTICLES   OF   ASSOCIATION, 

synonymous  with  charter \\ 

ARTICLES   OR   CERTIFICATE   OF   INCORPORATION, 

acknowledgment  of 79 

amendment  of 145-152 

contents  of 11 

defects  in -u 

evidentiary  effect  of 26 

riling,  publishing,  and  recording  of 

miscellaneous  provisions  relative  to  contents  of 76-77 

publishing 

recording 86   -7 

remarks  on '.i 

signing 7!' 

synonymous  with  charter 11 

ASSENT   OF   STOCKHOLDERS, 

to  by-laws 100 

to  preferred  stock 45 

ASSESSMENTS, 

forfeiture  of  shares  for  non-payment  of  stock 10S— 1  < ►:> 

power  to  levy 48-49 

ASSETS, 

of  corporations  liable  for  their  debts Ill 

power  of  corporation  to  dispose  of  its  entire 51-52 

ATTORNEY-GENERAL, 

approval  of  articles  by 77 

bringing  of  quo  warranto  proceedings  by 

B. 

BENEFITS, 

doctrine  that  the  reception  of  benefits  under  an  ultra  virtB contract 

cute  off  the  right  to  set  up  its  illegality 

BEQUESTS, 

power  of  corporation  to  accept    .     .         83 

BOARD  OF    DIRECTORS.     (See  Directors.) 

BOARD  OF   MANAGEMENT 

BONA    FIDE    PURCHASERS  OF   SHARES, 

liability  of,  to  creditors 171-172 

39] 


GENERAL   INDEX. 

BONDED   INDEBTEDNESS, 

limitations  upon (See  Part  II.) 

BONDHOLDERS, 

right  to  participate  in  election  of  directors 57 

BONDS, 

power  to  issue 60 

BONUS, 

to  be  paid  to  the  State  upon  creation  of  corporations       .     .     .      84-85 
BONUS   STOCK,  143 

BOOKS, 

inspection  of  corporate 165-167 

open  to  inspection  of  creditors 165-167 

stockholders        165-167 

■what  books  corporations  required  to  keep (See  Part  II.) 

where  kept .      65-66 

BOOKS  OF  ACCOUNT.  (See  Books.) 

BORROW, 

incidental  power  of  corporations  to 60 

BREACHES   of   TRUST, 

by  directors 174-170 

BURDEN   OF   PROOF, 

when  thrown  upon  creditors  in  attacking  valuation  of  property 

taken  in  exchange  for  stock 125-137 

when  thrown  upon  stockholders  in  attacking  valuation  of  property 
taken  in  exchange  for  stock 125-137 

BUSINESS, 

entire,  may  be  transacted  outside  of  domiciliary  State    ....       40 

power  to  transact,  outside  of  domiciliary  State 38-40 

principal  place  of      .... 60 

BUSINESS   CORPORATION, 

meaning  of  term 9 

BY-LAWS, 

adoption  of 99-100 

by  directors 75 

alteration  of 99-100 

book  of 100 

definition  of 99 

inherent  power  to  make 33 

mode  of  enacting 33 

power  of  directors  to  adopt 55-56 

of  stockholders  to  adopt 99 

to  enact 33 

to  inflict  penalties  for  violation  of (See  Part  II.) 

statutory  provisions  relative  to  .... 100 

c. 

CAPITAL, 

liability  of  directors  for  declaring  dividends  out  of 174 

what  is,  when  applied  to  corporations 67-68 


GENERAL    INDEX. 

CAPITAL   STOCK, 

decrease  of 41 

definition  of 67-0!) 

increase  of 41 

issuance  of 112-113 

limitation  upon  amount  of (See  Part  III.  Table  V.) 

manner  of  payment  of 69,  112-113 

payment  of ,  in  cash 11;} 

property 120-122 

services lL'ti 

CERTIFICATE   OF    CAPITAL   STOCK, 

when  must  issue 110-111 

who  entitled  to 110-111 

who  must  sign 110-111 

CERTIFICATE  OF  INCORPORATION.     (See  Articles  of  Incor- 
poration.) 

CERTIFICATE    OF   ORGANIZATION, 

synonymous  with  charter 11 

CHANGE   IN   ARTICLES.     (See  Amendment  to  Articles.) 

CHANGE  OF   CORPORATE   NAME 41 

CHARTERS, 

construction  of 77-78 

creation  of  corporations  under !' 

definition  of in 

essentials  of 11 

form  in  which  granted 86 

nature  of •. 10 

(See  also  Articles  of  Incorporation.) 

CITIZENS, 

meaning  of  term  in  federal  constitution 181 

CITIZENSHIP   OF   CORPORATIONS 60 

CLASSIFICATION, 

of  directors 57-58 

of  incorporation  acts 7-8 

COLLATERAL    ATTACK, 

upon  corporate  existence 21-28,  88-92 

upon  corporate  powers 21-28 

upon  corporate  purposes 21-28 

COMBINATIONS, 

in  restraint  of  trade,  unlawful  trusts  "for  the  control  of  corpora- 
tions and  the  prevention  of  competition  among  them  .      .     .  167-168 

COMITY, 

doctrine  of  Stat.- Is'    190 

COMMENCE   BUSINESS, 

time  witliin  which  corporation  must  organize  and       .     .     .     .109-110 
when  corporation  <'ntitl<j<l  to B2-94 

COMMENCEMENT  OF  CORPORATE    EXISTENCE  ....      92  94 

COMMENCEMENT  OF  OPERATIONS    (See  Commenoi    Bosini 

COMMERCE  CLAUSE  OF  THE  FEDERAL  CONSTITUTION    202  210 


GENERAL    INDEX. 

COMMERCIAL   PAPER.     (See  Negotiable  Instruments.) 

COMMISSIONERS, 

to  take  stock  subscriptions 99 

COMMITTEE, 

executive 56,  107-108 

COMMON   LAW  POWERS, 

definition  of 30-31 

enumeration  of 30-31 

COMPANY, 

does  not  imply  incorporation 14 

COMPETITION, 

combinations   or  trusts  among   corporations  for  the  prevention 
of 167-168 

CONCLUSIVE, 

meaning  of,  in  relation  to  evidentiary  effect  of  documents  ...      26 

CONDITIONS, 

imposed  upon  domestic  corporations  with  reference  to  transaction 
of  business  within  State 145-179 

imposed  upon  foreign  coi-porations  with  reference  to  transaction 

of  business  within  State     . 180-210 

CONDITIONS    PRECEDENT, 

to  coming  into  existence  as  a  corporation 93 

CONDITIONS    SUBSEQUENT, 

forfeiture  of  charters  on  the  happening  of 93 

CONSOLIDATION, 

meaning  of 40 

payment  of  taxes  upon 85 

regulation  of  right  of 178-179 

CONSOLIDATION   OF   CORPORATIONS, 

when  power  exists 38 

CONSTITUENT    ACTS, 

power  to  perforin  outside  of  domiciliary  State 40 

CONSTITUTIONAL   LAW 181,  202-210 

CONSTITUTIONAL   PROVISIONS, 

creating  individual  liability  of  stockholders  for  corporate  debts    169-174 
CONSTITUTIONAL   RESTRAINTS, 

relative  to  impairing  the  obligations  of  contracts 153-151 

upon  the  creation  of  corporations 9 

CONSTRUCTION   OF   CHARTER 77-78 

CONTRACTS, 

impairing  obligation  of 77-78 

power  of  corporations  to  make 60 

CONTROL   OF   CORPORATIONS, 

who  entitled  to 102 

CORPORATE  AGENTS, 

power  to  appoint      .     .     .     ." 33 

CORPORATE   BOOKS.     (See  Books  ) 
CORPORATE   ELECTIONS.     (See  Elections.) 
894 


GENERAL    INDEX. 

CORPORATE   EXISTENCE, 

collateral  attack  upon 21-28, 

duration  of 

extension  of I , 

power  to  extend 40-41 

proof  of 24-26 

right  of  State  in  direct  proceedings  to  attack 90-92 

when  commences 92-94 

CORPORATE    NAME, 

not  alienable 32 

power  to  change 41 

right  to 31 

CORPORATE   OFFICERS, 

election  of 1 

power  to  appoint 

CORPORATE   POWERS, 

at  common  law 

classification  of 

collateral  attack  upon 21-28 

consolidation  of 29 

definition  of 30,  34,  59 

enumeration  of '.1    IS 

express 30,  34,  36 

financial 60 

implied 30-31,  59 

incidental 30,  59-60 

power  of  amotion 60-6] 

to  give  and  accept  evidences  of  debt CO 

mortgage  and  pledge GO 

purchase  corporation's  own  stock 36 

purchase  stock  in  other  corporations 

CORPORATE    PURPOSES, 

collateral  attack  upon 1">   l!' 

illegal 6-28 

number  of 19-20 

CORP 'HI  ATE    SEAL, 

right  to  adopt  and  use  a 32 

CORPORATIONS, 

cannol  1"-  created  by  voluntary  agreement Ik 

cannot  become  incorporators 18 

citizenship  of 68 

c  immon  law  powers  of 

i  onsolidai  ion  of ;,,s.  1 1 

created  by  special  act 9-10 

dp  facto  corporations 

definition  of 

domicile  of 68 

express  powers  of      .     .        

extension  of  corporate  existence 10—41 

for  what  purposes  may  be  formed .19 


GENERAL   INDEX. 

CORPORATION'S  —  continued. 

incidental  powers  of      . 59-60 

name  of 14 

power  of  minority  stockholders  to  compel  purchase  of  holdings     .       47 

to  amend  articles  before  organization 58 

appoint  executive  committee 56 

authorize  directors  to  adopt  by-laws 55-56 

authorize  voting  by  proxy 49 

bestow  upon   bondholder's   right  to  vote  at  corporate 

elections 57 

borrow  money 60 

change  corporate  domicile 47 

change  corporate  name 41 

change  corporate  purposes 46 

change  number  of  directors 46 

change  par  value  of  shares 57 

change  principal  place  of  business 47 

classify  directors 57-58 

diminish  corporate  powers 57 

dispose  of  corporate  assets  as  an  entirety     ....       51-52 
enforce  a  lien  upon  stock  to  secure  payment  of  corporate 

debts 47-48 

enlarge  corporate  powers 56 

forfeit  stock 48-49 

increase  or  decrease  capital  stock 41 

insert  provision  for  regulation  of  internal  affairs  .     .       53-55 

issue  preferred  stock 41-45 

issue  stock  in  exchange  for  services  or  property     .     .      49-50 

levy  assessments 48-49 

make  contracts 60 

perform  constituent  acts 40 

permit  cumulative  voting 49 

purchase  its  own  stock 36-37 

purchase  stock  in  other  corporations 37-38 

surrender  charter  before  organization 58 

transact  business  outside  of  domiciliary  State  .     .     .      38-40 

voluntarily  dissolve  the  corporation 52-53 

steps  necessary  to  creation  of 12 

time  within  which  corporation  must  organize 109-110 

where  can  be  created  by  special  act 9 

CORPORATOR 12 

COUNTY   OFFICES, 

filing  and  recording  in 86 

CREDITORS, 

directors'  liability  to 174—176 

right  of,  to  enforce  stockholders'  liability  for  corporate  debts  .  169-174r 

inspect  corporate  books 165-167 

stockholders'  liability  to 169-174 

CUMULATIVE   VOTING, 

at  corporate  elections 49> 

896 


GENERAL    INDEX. 


I). 


DARTMOUTH    COLLEGE   DECISION 158 

DATE    OE    ANNUAL    MEETING 74 

DEBTS, 

limitation  upon  account  of  corporate 71   75 

power  of  corporations  to  incur 60,71-70 

DECREASE   OF  CAPITAL   STOCK 11 

DE   FACTO   CORPORATIONS, 87-U0 

DEFAULT, 

in  payment  of  annual  tax,  effect  of 1G0 

DEFINITIONS, 

business  corporation      .     , 9 

capital  stock 68 

incorporation 9 

incorporator 12 

shares  of  stock 68 

DE  JURE   CORPORATIONS 86-90 

DELEGATION, 

of  powers  of  board  of  directors  to  executive  committee    .     .     .  107-108 

DEVISES, 

power  of  corporations  to  accept 33 

DIMINISHMENT, 

of  corporate  powers 53 

DIRECTORS, 

adoption  of  by-laws  by 75 

appraisal  of  property  by 137-138 

classification  of 57-58 

election  of 100  104 

first  meeting  of 105   107 

named  in  certificate  are  directors  de  jure 67 

power  to  adopt  by-laws 55,  96 

appoint  executive  committee 56 

change  number  of 48 

vote  by  proxy K'6 

qualification  of ■ 101-102 

(See  Board  of  Managkmknt.) 
statutory  liability  of 171    L78 

DIRECTORY   PROVISIONS, 

what  are 91 

DISQUALIFICATION, 

for  the  ofhee  of  director 101 

DISSENTING  DD3ECT0RS, 

provisions  for  the  exoneration  of,  from  statutory  liability    .     .   154    157 

DISSOLUTION, 

involuntary ' 

voluntary    

DISSOLUTION  OF   CORPORATIONS B2  58,  L54   157 


GENERAL   INDEX. 

DISTINCTION, 

between  de  jure  and  de  facto  corporations      .......      87-88 

DIVIDENDS 174 

DOCTRINE   OF   ESTOPPEL        63-65 

DOCTRINE   OF   STATE   COMITY 184-190 

DOCTRINE    OF    ULTRA    VIRES 61-65 

DOING   BUSINESS, 

what  constitutes  doing  business  by  a  foreign  corporation     .     .  190-195 

DOMESTICATION, 

of  foreign  corporations .198 

DOMESTIC    CORPORATIONS 145-179 

DOMICILE, 

corporate 65-66 

DOMICILE   OF   CORPORATIONS, 

power  to  change  corporate 47 

DOMICILIARY   OFFICE 65-66 

DOUBLE   LIABILITY, 

of  stockholders  to  creditors 173 

DUMMY, 

directors 1"* 

incorporators *       14 

DURATION, 

of  corporate  existence 73-74 

limitations  upon 154-155 

of  office  for  directors 102 


E. 

EFFECT, 

of  appraisal  of  property  by  directors 137-138 

state  officials 139-141 

ELECTION, 

of  corporate  officers 10' 

ELECTIONS, 

corporate 100-101 

of  directors 100-104 

ELEEMOSYNARY   CORPORATIONS 9 

ELIGIBILITY, 

as  an  incorporator 14 

to  office  of  director 100-104 

ENLARGEMENT, 

of  corporate  powers 56 

EQUAL   PROTECTION   OF   LAWS 181 

ERROR   OF   JUDGMENT I36 

ESTOPPEL, 

doctrine  of,  in  pais 63-00 

in  case  of  ultra  vires  contracts 63-64 

to  deny  corporate  existence .     .       -so 

898 


GENERAL    INDEX. 

EVIDENCE, 

meaning  of  conclusive og 

prima  facie 26 

of  corporate  existence 24  26.  87   38 

EXCESSIVE   DEBTS 71  7, 

EXECUTION, 

of  articles  of  incorporation 79-80 

EXECUTIVE    COMMITTEE, 

appointment  of ...        107-108 

power  of  directors  to  appoint 56 

powers  of  executive  committee  of  directors 56 

EXEMPTION, 

of  stockholders  from  personal  liability 75 

EXISTENCE  OF  CORPORATION.     (See  Corporatk  Existence.) 

EXPIRATION  OF   CHARTER 176 

EXPRESS    POWERS, 

definition  of 34-37 

enumeration  of 34-37 

EXTENSION, 

of  corporate  existence 176-177 

payment  of  tax  upon 85 

EXTRA-TERRITORIAL   POWERS 38-40,  184-190 

F. 

FALSE    REPORT, 

liability  for  directors  making 174 

FEDERAL   COURTS, 

right  of  foreign  corporations  to  remove  cases  to 198 

FEES, 

organization 84-85,  177-1 7* 

FICTITIOUS    INCREASE, 

of  stock 128 

FICTITIOUS   STOCK 72,148 

FILING   CHARTER, 

in  local  county  offices 86-87 

with  State  officials 82-84 

FINANCIAL    POWERS   OF   CORPORATIONS 60 

FINES, 

power  to  enforce  by-laws  by  pecuniary  fines 88 

FIRST    DIRECTORS'    MEETING 105  l< '7 

FIRST   GENERAL    INCORPORATION    ACT, 

reference  to 1 

FOREIGN   CORPORATIONS, 

annual  license  tax  on 1: 

license  tax  on ';,s   '  i;l 

penalty  for  transacting  business  without  .permit 196   1 

power  to  exclude 

what  constitutes  doing  business  on  the  part  of I'1'1   19 ■• 

899 


GENERAL   INDEX. 

FOREIGN   LAWS, 

extra-territorial  force  of  statutes  enforcing  liability  upon  direc- 
tors and  stockholders 169-176 

FORFEITURE  OF   CHARTERS, 

for  insolvency .....'.     160 

for  misuse  or  abuse  of  corporate  powers 159 

for  non-payment  of  taxes 160 

for  non-performance  of  conditions  precedent 160 

subsequent 160 

for  non-user  of  corporate  franchises 158-159 

for  violation  of  express  statute 160 

FORFEITURE   OF    SHARES 48-49 

FORM, 

in  which  charter  is  granted 86 

FRANCHISES, 

corporation 11 

FRANCHISE  TAX, 

distinction  between  franchise  tax  and  property  tax     ....  177-178 

distinguished  from  organization  tax 84-85 

right  to  impose 178 

FRAUD .  127-128 

FRAUDULENT  ISSUE   OF   SHARES 33 

FULL   LIABILITY   CORPORATIONS 174 

FULL-PAID   STOCK 142-143 

FUNDAMENTAL  CHANGES   IN   CHARTER 145-152 

a 

GIFT   OF  SHARES, 

effect  of,  on  liability  of  stockholders 143-144 

"GOOD   FAITH   RULE," 

for  payment  of  shares  in  property  other  than  money  ....  123-125 
statement  of 123-125 

GRADUATED  ORGANIZATION  TAX, 

right  to  impose 178 

validity  of 85 

GRANT, 

power  to 32-33 

H. 
HOLDING  OVER  BY  DIRECTORS 102 

I. 

ILLEGAL   PURPOSES 28-29 

IMMUNITY, 

from  personal  liability  by  publication  of  articles 80 

IMPLIED    POWERS 59 

INCIDENTAL   POWERS 59-61 

INCORPORATION, 

definition  of 9 

purposes  for  which  corporations  may  be  formed 17-19 

900 


GENERAL    INDEX. 

INCORPORATION    ACTS, 

classification  of 7_S 

INCORPORATORS, 

aliens  may  be 18 

corporations  cannot  be |3 

definition  of !•_> 

dummy \  \ 

infants  cannot  be l:; 

married  women  may  be 13 

may  sign  articles  by  mark 79 

must  be  known  persons 13 

organization  meeting 95-96 

privileges  of 11 

qualifications  of 12 

synonymous  with  corporators 12 

INCREASE, 

in  par  value  of  shares 57 

of  capital  stock « 41 

INDEBTEDNESS, 

limitation  upon  corporate       71-7.") 

INDIVIDUAL   LIABILITY   OF   STOCKHOLDERS       .     .     .     .169   17  1 

INFANTS 13 

INSOLVENCY, 

forfeiture  of  charter  for 100 

INSPECTION    OF   BOOKS   AND   RECORDS, 

by  creditors 165-107 

by  stockholders 165   lti7 

INSPECTION    OF   CORPORATE   BOOKS 165-167 

INSPECTORS   OF   ELECTION 103-104 

INTERNAL   AFFAIRS, 

provisions  for  the  regulation  of 53-55,  76,  168-169 

INTERPRETATION    OF   CHARTER 77  78 

INTER-STATE    COMMERCE, 

clause  of  the  Federal  Constitution 202-210 

INTRODUCTION 1 

INVOLUNTARY   DISSOLUTION 156-157 

IPSO  FACTO  DISSOLUTION 154-157 

IPSO  FACTO   FORFEITURE 157-160 

ISSUANCE   AND   PAYMENT   OF   CAPITAL   STOCK      .     .     .  112-118 


L. 

LABOR   DEBTS, 

liability  of  stockholders  for 17:>  171 

LAND, 

power  of  corporations  to  take  and  hold 82  88 

LAW   AND   FACT. 

questions  of 125 

90] 


GENERAL   INDEX. 

LEADING  INCORPORATING   STATES, 

enumeration  of 3,  7 

LEASES, 

power  of  corporations  to  accept  leases  in  exchange  for  stock    .    50,  121 
LEGISLATIVE    AUTHORITY, 

essential  to  creation  of  corporations 10 

LEGISLATIVE    CONTROL, 

over  domestic  corporations 145-179 

over  foreign  corporations 180-210 

LEGISLATIVE    INVESTIGATION, 

into  corporate  affairs 164 

LEGISLATIVE   REGULATION, 

of  internal  affairs 167-168 

LEGISLATIVE    REQUIREMENT, 

of  annual  report 164-165 

LEGISLATURE 145 

LETTERS    PATENT, 

when  conclusive  as  to  fact  of  incorporation        24-28 

LIABILITY, 

of  directors.     (See  Directors.) 

of  stockholders.     (See  Stockholders.) 
LIABILITY    OF   STOCKHOLDERS, 

exemption  from » 74-75 

LICENSE   TAX, 

upon  foreign  corporations 198-199 

LIEN, 

corporation's  lien  upon   stock  of   its    members  to   secure   debts 

due  it 47-48 

LIMITATIONS, 

upon  amount  of  capital  stock 69-70 

upon  corporate  existence 74-75,  154-155 

upon  power  to  hold  real  property 32-33 

LIST   OF   SHAREHOLDERS, 

failure  to  keep  alphabetical  list  of  stockholders  not  an  ipso  facto 

dissolution 176 


MAJORITY, 

of  directors  rule  in  private  corporations 102 

of  stockholders  entitled  to  control  in  private  corporations  .  .  .  102 
MANDAMUS, 

right  of 8* 

MANDATORY  PROVISIONS 91 

MANNER   OF   PAYMENT   OF   CAPITAL   STOCK      .     .     69,  113,  120 

MANUFACTURING   CORPORATIONS 173 

MARRIED   WOMEN, 

may  be  incorporators 13 

MAXIMUM    AMOUNT, 

of  indebtedness -     •       82 

902 


GENERAL  INDEX. 

MEETING, 

date  of  annual 74 

organization 

MEETINGS, 

of  directors 105-107 

for  election  of  directors,  where  held 104 

of  stockholders 40,96-88,104 

MERGER.     See  Consolidation'. 

MINING  COMPANIES       131-132 

MINISTERIAL  DUTIES 34 

MINORITY   STOCKHOLDERS, 

power  to  compel  purchase  of  their  stock  upon  consolidation    58-59.  102 

MISCELLANEOUS  PROVISIONS, 

relative  to  contents  of  articles  of  incorporation 76  77 

MISCONDUCT   OF    DIRECTORS.     (See  Amotion.) 

MISTAKES   OF  JUDGMENT, 

in  appraisal  of  property  taken  in  exchange  for  stock       ....     136 

MISUSER, 

a  ground  for  forfeiting  corporate  charter 159 

MONEY, 

payment  for  stock  in 11:5 

"MONEY  OR  MONEY'S  WORTH"  RULE 113 

MORTGAGE, 

corporate 60 

power  to 60 

MORTGAGE   BONDS 60 


N. 

NAMES   OF   CORPORATIONS, 

corporate  name  not  alienable 81 

purpose  of 11.  31 

power  to  change 11 

protection  of  corporate 31 

right  to  a  corporate  name 11,31 

similarity  in  corporate  name  forbidden 11.  31 

NEGLIGENCE, 

liability  of  directors  for 176 

NEGOTIABLE   INSTRUMENTS, 

corporate  powers  relating  to 60 

NON-ASSESSABLE    STOCK Ill    1  111 

NONPAYMENT   OF   TAXES, 

forfeiture  of  charter  for 160 

NON  PERFORMANCE  OP  CONDITION'S   PRECEDENT, 

forfeiture  of  charter  for 160 

NON-PERFORMANCE  OF  CONDITIONS  SUBSEQUENT, 

forfeiture  of  charter  for 180 

903 


GENERAL   INDEX. 

NON-USER, 

dissolution  of  corporations  for 158-159 

NOTICE, 

of  directors'  meetings , „     106 

of  incorporators'  meetings 96 

0. 

OATH, 

of  inspectors  of  election 103 

of  office 101 

OFFICE 66 

OFFICERS, 

of  corporations 107 

ONE-MAN    CORPORATIONS 13-14 

ONUS    PROBANDI.     (See  Burden  of  Proof.) 

ORGANIZATION   MEETING   OF   INCORPORATORS, 

how  called 96 

where  held 96-98 

ORGANIZATION   OF   CORPORATIONS, 

certificate  of 109 

steps  necessary  to  complete 98-99 

ORGANIZATION   TAX 84-85 

distinguished  from  franchise  tax 85 

graduated 85 

right  to  impose 178 

ORGANIZE, 

time  within  which  corporations  must 109-110 

OUSTER, 

judgment  of,  in  quo  warranto  proceedings      .     .     .       112-113,  157,  198 

OVERVALUATION, 

of  property  delivered  in  exchange  for  stock 122-137 

P. 

PAID   UP   STOCK, 

meaning  of 142-144 

PARTNERS, 

liability  of  incorporators  as 80,  173 

PAR   VALUE, 

change  in 57 

of  capital  stock 70 

PATENT    RIGHTS 50,  121 

PAYMENT    OF   CAPITAL   STOCK 112-120 

certificate  of 109 

in  property 120-122 

in  services  . 120 

PENALTIES, 

for  violation  of  by-laws 33 

904 


GENERAL    INDEX. 

PENALTY. 

for  failure  to  organize  and  commence  business 110 

upon    foreign    corporations    for    transacting    business    without 
permit 1H5-198 

PERPETUAL   SUCCESSION, 

right  of 

PERSONAL  PROPERTY, 

power  to  hold 82-89 

PETITION    FOR   INCORPORATION, 

synonymous  with  charter 11 

PLACE   OF   BUSINESS 60 

power  to  change 17 

PLEDGE, 

power  to ill) 

PLEDGEES, 

liability  of,  for  unpaid  stock  subscriptions 172 

POLICE   POWER 100-164 

POWER, 

to  impose  organization  taxes 85 

POWER   OF   ATTORNEY, 

signing  articles  by 79 

POWER   OF   STATE   LEGISLATURES, 

over  foreign  corporations 180-184 

POWERS   OF   CORPORATIONS. 

cannot  be  created  by  by-law 29 

classification  of 29-80 

collateral  attack  upon 21,28 

common  law 80-3] 

consolidation 33 

express 80,  84,  88 

incidental 80, 

to  acquire  and  hold  property  in  trust 88 

to  acquire,  hold,  and  dispose  of  real  and  personal  property  .     .      82  8  I 

to  amend  articles  before  organization 58 

to  appoint  corporate  officers  and  agents :>3 

to  appoint  executive  committee 88 

to  authorize  directors  to  adopt  by-laws 86-56 

to  authorize  voting  by  proxy 

to  bestow  upon  bondholders  right  to  vote  at  corporate  elections    ■       57 

to  borrow  money 50 

to  change  corporate  domicile *i 

to  change  corporate  Dame 

to  change  corporate  purposes 46,  145   L52 

to  change  number  of  directors 

to  change  par  value  <>f  shares 6? 

to  change  principal  place  of  business 

to  classify  directors 57-68 

to  diminish  corporate  powers 

to  dispose  of  corporate  assets  as  an  entirety 

905 


GENERAL   INDEX. 

POWERS    OF    CORPORATIONS  —  continued. 

to   enforce   a  lien   upon   stock  to  secure  payment  of  corporate 

debts 47-48 

to  enlarge  corporate  powers 56 

to  establish  by-laws 33 

to  extend  corporate  existence 40-41 

to  forfeit  stock     .     : 48-49 

to  hold  meetings  for  election  of  directors  without  domiciliary  State  .    104 

to  increase  or  decrease  capital  stock 41 

to  insert  provision  for  regulation  of  internal  affairs     ....      53-55 

to  issue  preferred  stock 41-45 

to  issue  stock  in  exchange  for  services  or  property 49-50 

to  levy  assessments 48-49 

to  make  contracts 60 

to  organize  subsidiary  companies 37 

to  perform  constituent  acts 40 

outside  of  domiciliary  State  ....       40 

to  permit  cumulative  voting 49 

to  purchase  its  own  stock 36-37 

to  purchase  stock  in  other  corporations 37-38 

to  sue  and  be  sued 34 

to  surrender  charter  before  organization 58 

to  take  property  by  devise 33 

to  transact  business  outside  of  domiciliary  State 38-40 

to  voluntarily  dissolve  the  corporation 52-53 

PREFERRED   STOCK, 

included  in  amount  of  authorized  capital 68 

power  to  issue 41-45 

PRINCIPAL   PLACE   OF   BUSINESS 66,  82 

PROMOTERS 120 

PROMOTION   STOCK .120 

PROOF   OF   CORPORATE   EXISTENCE 24-26,  87-88 

PROPERTY 49,  50,  120-122 

(See  Payment  for  Shares.) 
PROPORTIONATE   LIABILITY 169-174 

PROXY, 

right  to  vote  by 49,  104-105 

directors  cannot  vote  by,  at  board  meetings 106 

PUBLICATION, 

of  annual  reports 164-165,  175 

of  articles  of  incorporation 80 

purpose  of 80 

PUBLIC   POLICY, 

corporate  purposes  opposed  to 29 

PURPOSES, 

collateral  attack  upon  corporate 16-28 

corporate 15-19 

for  which  corporations  may  be  formed 15-19 

illegal 28-29 

906 


GENEKAL    INDEX. 

PURPOSES  —  continued. 

more  than  one  purpose 19-20 

number  of 19-20 

power  to  change  corporate 46,  145-152 

Q. 

QUALIFICATION   SHARES 101 

QUALIFICATIONS   OF   DIRECTORS 101 

QUESTIONS    OF   LAW   AND   FACT 125 

QUORUM, 

at  corporate  elections 102 

at  stockholders'  meetings 102 

of  directors 106 

of  incorporators   .     .     , 96 

QUO    WARRANTO 157 

R. 

RATIFICATION 64 

REAL   ESTATE, 

power  to  hold .      32-33 

REASONABLENESS, 

of  corporate  by-laws 100 

RECORDATION, 

of  articles  of  incorporation 86-87 

RECORDS, 

corporate     165-167 

REDUCTION    OF   CAPITAL, 

corporate  powers  relative  to 41 

REGULATION, 

of  internal  affairs 53-55,  168-169 

provision  for 76 

of  right  of  consolidation 178-179 

REMOVAL   OF   DIRECTORS 60-61 

RENEWAL   OF    CHARTER 153-154 

REPEAL 99-100 

of  by-laws 153-154 

of  charters 153-154 

REPORTS, 

annual 164—1  <>."> 

legislative  requirement  of  annual 164-165 

statutory  liability  of  directors  relative  to 174—175 

RESIDENCE    OF   CORPORATIONS 66 

RESTRAINT   OF   TRADE, 

combinations  in 167-168 

RETALIATORY    TAXATION, 

of  foreign  corporations 1!'!> 

907 


GENERAL    INDEX. 

RIGHT, 

of  perpetual  succession 31-32 

to  impeach  corporate  existence 88-92 

RULE, 

good  faith 123-125 

speculative  value 125-137 

true  value 122-123 

RULES, 

for  construction  of  charter . 77-78 


S. 

SEAL, 

affixed  to  certificate  of  incorporation 86 

power  to  adopt  and  alter 32 

use  of,  by  incorporators 79 

SECRETARY   OF    STATE, 

effect  of  certificate  of  due  incorporation 21-28,  88-92 

mandamus  against 84 

SERVICE   OF    PROCESS, 

appointment  of  agent  upon  whom  process  may  be  served     .     .     .     180 

SERVICES, 

payment  of  stock  in 49,  120 

SIGNING   ARTICLES    OF   INCORPORATION 79 

SIMILARITY, 

of  corporate  name  forbidden 14,  31 

SOLE    STOCKHOLDERS 13-14 

SPECIAL    ACT, 

incorporation  by,  forbidden 9-10 

SPECIAL   LIABILITY 173-174 

SPECIAL   REQUIREMENTS, 

as  to  articles  of  incorporation 81-82 

SPECULATIVE   VALUE   RULE 125-137 

STATE, 

police  power  of 160-164 

powers  of,  in  creation  of  corporations 10,  85 

right  of,  to  attack  corporate  existence 90-92 

repeal  charters 153-154 

STATEMENT, 

of  good  faith  rule 123-125 

of  true  value  rule 122-123 

of  speculative  value  rule 125-137 

STATE   OFFICERS, 

mandamus  against S4 

STATE   OFFICIALS, 

appraisal  of  property  by 139-141 

power  to  accept  or  reject  articles 82-84 

STATUTES   OF   MORTMAIN 32 

908 


GENERAL   INDEX. 

STATUTORY   LIABILITY, 

of  directors 174-176 

of  stockholders 169-174 

STATUTORY    LIMIT, 

of  indebtedness 74-75 

STOCK, 

amount  paid  in 72-73 

with  which  corporation  may  begin  business 7:'. 

assessments 108-109 

capital 67-69 

extinguishment  of 37 

full  paid 142-143 

issuance  of,  in  exchange  for  services  or  property    .     .      49-50,  112-137 

legislative  authority  necessary  to  issuance  of 68 

non-assessable 141-142 

par  value  of 70 

power  of  corporation  to  purchase  its  own 36-37 

stock  in  other  corporations  .      37-3^ 

power  to  decrease 41 

forfeit 48-49 

increase 41 

statement  in  articles  as  to  manner  in  which  same  shall  be  paid  for       69 

STOCK   CERTIFICATES 110-111 

STOCKHOLDERS, 

double  liability 173 

exemption  in  articles  from  personal  liability 75 

liability  for  debts  of  the  corporation 169-174 

labor  claims 173-174 

unpaid  stock  subscriptions 169-172 

liability  of  pledgees 172 

transferees 172 

transferors 172 

trustees 172 

special  liability 173-174 

STOCK   NOTES 121 

STOCK   SUBSCRIPTIONS, 

affidavit  as  to 81 

amount  of 70-71 

SUBORDINATE   OFFICERS   AND   AGENTS, 

appointment  of 107 

SUBSCRIPTIONS    FOR   STOCK, 

affidavit  as  to 80 

SUBSEQUENT   CONDITIONS 93,  160 

SUBSIDIARY   COMPANIES, 

power  to  organize 37 

SUE, 

power  to 34 

SURPLUSAGE, 65 

909 


GENERAL   INDEX. 

SURRENDER  OF    CHARTER, 

before  organization        58,  155 

SUSPENSION   OF   BUSINESS 156,  158-159 

T. 

TAX, 

organization 84-85 

TAXATION, 

of  domestic  corporations 177-178 

TAXING    POWER, 

of  the  State  as  limited  by  the  inter-state  commerce  clause  of  the 
Federal  Constitution 202-210 

TENDENCY, 

in  favor  of  incorporation 9 

TENURE    OF    OFFICE 102,  107 

TERMINATION   OF   CHARTER 151-155 

TIME, 

of  corporate  existence 73-71 

within  which  corporations  must  organize   and   commence  busi- 
ness      109-110 

TRADE   MARK, 

name  of  corporatfon  protected  as  a 15 

TRADE    NAME, 

corporation  protected  in  equity  in  use  of  its  name 15 

TRAMP   CORPORATIONS 185 

TRANSFER, 

of  entire  corporate  assets 51-52 

of  shares 171-172 

TRANSFEREES, 

liability  of,  for  unpaid  stock  subscriptions 171-172 

TRANSFERORS, 

liability  of,  for  unpaid  stock  subscriptions 171-172 

TREASURY   STOCK 121-122 

TRUE   VALUE   RULE, 

statement  of 122-123 

TRUST, 

power  to  acquire  and  hold  property  in 33 

voting 103, 105 

TRUSTEE, 

power  of  corporation  to  act  as 33 

TRUSTEES, 

liability  of,  for  unpaid  stock  subscriptions 172 

TRUST   FUND   DOCTRINE Ill 

TRUST   LEGISLATION 167-168 

910 


GENERAL    INDEX. 


u. 


ULTRA    VIRES, 

doctrine  of « 61-65 

UNIFORM   TAXATION 85 

UNLAWFUL   CORPORATIONS 10 

UNPAID   STOCK 142-145 

USER 88 


V. 

VACANCIES, 

in  board  of  directors,  power  to  fill  ....     e 102 

VALUATION, 

of  property  taken  in  exchange  for  stock 137-141 

VALUE,  PAR .      70,  110-111 

VERIFIED   REPORTS 174 

VIOLATION   OF   EXPRESS   STATUTES, 

forfeiture  of  charter  for 160 

VISITORIAL   POWERS, 

of  State  legislatures  relative  to  corporations 164 

VOLUNTARY   DISSOLUTION 52-53,  155-156 

VOLUNTARY   SURRENDER  OF   CHARTER     58 

VOTING, 

cumulative 49 

by  proxy «     .     .     .     .     .      49,  104-105 

trusts 103,  105 

w. 

WHAT  CONSTITUTES  DOING   BUSINESS, 

on  the  part  of  foreign  corporations 190-195 

WINDING   UP.     (See  Dissolution  and  Forfeiture.) 

WORDS   AND   PHRASES (See passim.) 


911 


INDEX  TO  SYNOPSIS-DIGEST  OF  THE  INCOR- 
PORATION ACTS  OF  THE  SEVERAL  STATES, 
TERRITORIES,   ETC. 


[The  references  are  to  pages.] 


Alabama 211-220 

Alaska 221-225 

Arizona 226-232 

Arkansas 233-241 

California 242-252 

Colorado 253-259 

Connecticut 260-266 

Delaware 267-274 

District  of  Columbia    .  275-279 

Florida      280-285 

Georgia 286-290 

Hawaii 291-294 

Idaho 295-301 

Illinois 302-308 

Indiana.     ......  309-321 

Iowa 322-329 

Kansas 330-336 

Kentucky 337-342 

Louisiana 343-347 

Maine 348-354 

Maryland 355-368 

Massachusetts  ....  369-376 

Michigan 377-384 

Minnesota 385-391 

Mississippi 392-396 

Missouri 397-403 

Montana 404-410 


Nebraska  .     . 
Nevada       .     . 
New  Hampshire 
New  Jersey   . 
New  Mexico  . 
New  York 
North  Carolina 
North  Dakota 
Ohio  .... 
Oklahoma  .     . 
Oregon .     .     . 
Pennsylvania 
Philippines     . 
Porto  Rico 
Rhode  Island 
South  Carolina 
South  Dakota 
Tennessee 
Texas     . 
Utah 
Vermont 
Virginia 
Washington  . 
West  Virginia 
Wisconsin  .     . 
Wyoming    .     . 


411-416 
417-125 
42(5-429 
430-438 
439-446 
447-469 
470-475 
476-483 
484-491 
492-497 
498-503 
504-513 
514-519 
520-524 
525-533 
534-538 
539-545 
546-550 
551-559 
560-565 
566-570 
571-582 
5S3-5S8 
589-599 
600-606 
607-612 


913 


INDEX   TO   FORMS   AND   PRECEDENTS. 


[The  references  are  to  pages.) 


A. 

ACCEPTANCE, 

of  constitution      868-869 

ACKNOWLEDGMENTS, 

by  attorney  in  fact 868 

corporate  form  for — in  the  several  States  and  Territories. 

(See  same  indexed  under  name  of  State.) 
of  articles  of  incorporation  for  the  several  States  and  Terri- 
tories           663-744 

AFFIDAVIT, 

as  to  mailing  notices  of  stockholders'  meeting 868 

AGENT, 

appointment  of 746-747 

AGREEMENT, 

for  sale  of  real  or  personal  property  in  exchange  for  capital 

stock 837-838 

placing  shares  of  stock  in  trust  for  corporation      838 

to  take  stock  in  corporation  to  be  formed 835-836 

voting  trust 847-848 

underwriting 843-847 

ALABAMA, 

acknowledgment  by  corporations  in 750 

form  for  certificate  of  incorporation  in 663-664 

form  for  permit  for  foreign  corporation  in 749-750 

ALASKA, 

form  for  articles  of  incorporation  in     .    .    : 664-665 

AMENDMENT  OF   CHARTER, 

certificates  relative  to      802-810 

notices  of  meeting  relative  to 802 

AMENDMENTS, 

resolution  calling  for  meeting  to  vote  upon 802 

to  charters,  forms  for 802-813 

APPOINTMENT, 

of  agent 746-747 

ARIZONA, 

acknowledgment  by  corporations  in 751 

form  for  amendments  of  charter  in 803-804 

form  for  articles  of  ineorporat ion  in  (skeleton  form)      ....     665-666 

form  for  permit  for  foreign  corporation  in 750 

steamboat  and  transportation  charter  complete 874-877 

915 


INDEX   TO    FORMS   AND    PRECEDENTS. 

ARKANSAS, 

acknowledgment  by  corporations  in 751 

form  for  articles  of  agreement  and  incorporation 666-668 

form  for  permit  for  foreign  corporation  in 751-752 

ARTICLES     OF     INCORPORATION.       (See   Certificates   of 

Incorporation.) 
ASSESSMENT, 

of  stock      881 

ASSIGNMENT, 

of  subscription      817 

ATTORNEY, 

power  of 840-842 

ATTORNEY   IN  FACT, 

acknowledgment  by 868 

AUDITING   COMPANY, 

charter  of  (under  New  Jersey  laws)      869-871 


B. 

BANK, 

certificate  to  be  filed  with,  on  opening  account 840 

BILL  OF   SALE 866 

BOND, 

form  of 854-855 

relative  to  lost  stock  certificates 866-867 

special  clause  for  insertion  in  issue  of 865 

trust  deed  and  bond 851-865 

BONDS, 

directors  authorized  to  issue 654,  815-816,  849-850 

underwriters'  agreement  for       843-847 

BROKERAGE   COMPANY, 

charter  of  (under  New  York  laws) 718-720 

BUSINESS, 

appointing  additional  officers 659 

borrow 658 

classification  of  directors 654 

clauses  regulating  business 654-661 

common-law  powers 660-661 

contracts 660 

cumulative  voting 655 

examination  of  books  by  stockholders 655 

first  meeting  of  incorporators 655 

general  business  clause 659-660 

guarantee  dividends 659 

holding  stockholders'  meeting  without  domiciliary  State      ....     655 
issuing  stock  and  bonds  in  exchange  for  real  and  personal  property     655 

lend  money 659 

limitation  on  dividends 656-657 

limitation  on  liability  of  original  subscribers 657 

limitation  on  the  right  to  mortgage  and  pledge 655 

non-assessable  stock 660 

916 


INDEX    TO    FORMS    AND    PRECEDENTS. 

BUSINESS  —  continued. 

partnership 659 

placing  stock  in  voting  trust      656 

placing  titles  in  individuals 656 

power  of  directors  to  appoint  executive  committee 655-656 

power  of  directors  to  issue  bonds 654 

power  of  directors  to  make,  alter,  amend,  or  repeal  by-laws    .    .    .     654 

powers  of  Board  of  Directors 659-660 

preferred  stock  clause,  long  form 662 

short  form 667 

special  clause  for  cumulative  dividends  .    .     662 

removal  of  directors  and  officers 658 

right  of  shareholders   to  participate  in  purchase  of  new  stock 

issue 657 

safety  clause 656 

security  for  persons  or  corporations      659 

transaction  of  business  without  domiciliary  State 653 

working  capital 657 

BY-LAWS, 

directors  authorized  to  make,  alter,  and  repeal      654 

form  of 822-828 

Maine  form 693-697 

of  United  States  Steel  Company 828-835 

c. 

CALIFORNIA, 

acknowledgment  by  corporations  in 752 

form  for  articles  of  incorporation  in 668-669 

form  for  permit  for  foreign  corporations  in 752 

CAPITAL  CLAUSES, 
from  charters  of 

Auditing  Co 869-871 

Brokerage  Co 718-720 

Coal  Co 877-878 

Mining  Co 872-873 

Steamboat  and  Transportation  Co 874-878 

Trust  and  Investment  Co 672-674 

United  States  Steel  Corporation 713-717 

preferred  stock 661-662 

CAPITAL  STOCK, 

decrease  of,  resolution  relative  to      802 

CERTIFICATE, 

interim 657-658 

relative  to  amendment  of  charter 802-810 

CERTIFICATE   OF   AUTHORIZATION, 

to  countersign  certificates  of  stock 842-843 

CERTIFICATES  OF   INCORPORATION, 

of  Auditing  Co 869-871 

of  Brokerage  Co 718  720 

of  Coal  Co 871-878 

917 


INDEX   TO    FORMS   AND    PRECEDENTS. 

CERTIFICATES    OF    INCORPORATION  —  continued. 

of  Mining  Co 872-879 

of  Steamboat  and  Transportation  Co 874-878 

of  Trust  and  Investment  Co 672-674 

of  United  States  Steel  Corporation 713-717 

skeleton  forms  for  use  in  all  States  and  Territories 663-744 

CERTIFICATE   OF   INSPECTORS, 

of  election 817,839 

CHARTER.     (See  Certificates  of  Incorporation.) 

CLERK, 

certificate  of,  certifying  to  his  appointment 867 

COAL   COMPANY, 

form  for  charter  of  (under  West  Virginia  laws)      871-879 

COLORADO, 

acknowledgment  by  corporations  in 753 

form  for  certificate  of  incorporation 669-670 

form  for  permit  for  foreign  corporations  in 753 

COMPANIES, 

objects  for  specific.     (See  Special  Index,  pages  613-615.) 

CONNECTICUT, 

acknowledgment  by  foreign  corporation  in 754 

form  for  certificate  of  incorporation  (skeleton  form)     ....     670-671 

form  for  permit  for  foreign  corporations  in 754 

form  for  voluntary  dissolution  in 811 

CONSTITUTION, 

acceptance  of 868-869 

CORPORATE   SIGNATURE, 

form  for 867 

COUNTERSIGNING  OF   STOCK 

form  for 842-843 

CUMULATIVE  VOTING 655 


D. 

DEED   OF  TRUST, 

securing  issue  of  bonds 851-865 

special  clause  for  insertion  in 865 

DELAWARE, 

acknowledgment  by  corporation  in 755 

form  for  amendments  of  charter  in  .    . 804-807 

form  for  certificate  of  incorporation  (skeleton  form)      ....     672-675 

form  for  permit  for  foreign  corporations  in 755 

form  for  voluntary  dissolution  in      812-813 

Trust  and  Investment  Co.  charter  complete 672-674 

DIRECTORS, 

classification  of 654 

election,  resolution  relative  to 814 

minutes  of  first  meeting  of 818-822 

power  to  adopt  and  alter  by-laws 654 

power  to  appoint  executive  committee 655-656 

power  to  contract  specific  debt,  resolution  granting  power  to     .    .     839 

918 


IXDEX    TO    FORMS    AND    PRECEDENTS. 

DIRECTORS  —  continued. 

power  to  dispose  of  all  corporate  property      653-654 

power  to  issue  bonds 655 

powers  of 659-660 

removal  of 658 

waiver  of  notice  of  first  meeting  of 822 

DISSOLUTION   OF   CORPORATIONS, 

forms  for 811-S13 

DISTRICT   OF   COLUMBIA, 

acknowledgment  by  corporations  in 755 

certificate  of  payment  of  capital  stock 851 

form  for  certificate  of  incorporation  (skeleton  form) 675 

form  for  permit  for  foreign  corporation  in 7.").") 

DIVIDEND, 

resolution  declaring 840 

E. 

EXECUTIVE   COMMITTEE, 

directors  authorized  to  appoint 655-656 

F. 

FLORIDA, 

acknowledgment  by  corporations  in 756 

form  for  notice  of  incorporation  and  charter  of  corporation  in     676-677 
form  for  permit  for  foreign  corporation  in 746-747,  756 

FOREIGN   CORPORATIONS, 

appointment  of  agent  by 746-7 17 

general  forms  for  securing  permit  to  transact  business  by    .    .     745-749 

G. 

GENERAL   MANAGER, 

form  for  insertion  in  by-laws 868 

power  of  attorney  relative  to  acting  as 840-842 

GENERAL  OBJECT   CLAUSES 653-654 

acquiring  an  established  business      653 

bond  clause 653 

conducting  business  in  other  States      (i;,  I 

disposal  of  all  corporate  property 653-65  1 

general  merchandise  clause (I.",;! 

general  object  clause 653  654 

general  purpose  clause 654 

holding  stock  in  other  corporations 653 

patent  and  trademark  clause (if,.; 

real  estate  clause      654 

GEORGIA, 

acknowledgment  by  corporation  in 7;,i; 

form  of  application  for  charier 677-li7S 

form  for  permit  for  foreign  corporation 7.~><» 

919 


INDEX   TO    FORMS   AND    PRECEDENTS. 


H. 

HAWAII, 

form  for  permit  for  foreign  corporation 756 


I. 

IDAHO, 

acknowledgment  by  corporation  in 758 

form  for  articles  of  incorporation 67S-679 

form  for  permit  for  foreign  corporation  in 757 

ILLINOIS, 

acknowledgment  by  corporation  in 759 

anti-trust  affidavit 759 

form  for  permit  for  foreign  corporation  in 758-759 

form  for  statement  of  incorporation 679-680 

INCORPORATORS'    MEETING, 

minutes  of 813-817 

proxy  for 816-817 

waiver  of  notice  of 836 

INDEX, 

specific  object  clauses      613-615 

INDIANA, 

acknowledgment  by  corporation  in 761 

form  for  articles  of  incorporation 681 

form  for  permit  for  foreign  corporations  in 760 

INSPECTORS', 

oaths  and  report 817 

INTERIM   CERTIFICATES, 

clauses  in  charter  relative  to 607-608 

IOWA, 

acknowledgment  by  corporation  in 761 

form  for  articles  of  incorporation 682-685 

form  for  permit  for  foreign  corporations  in 761 


K. 

KANSAS, 

acknowledgment  by  corporations  in 763-764 

form  for  application  for  charter  and  form  of  charter     ....     685-686 
form  for  permit  for  foreign  corporations  in 761-763 

KENTUCKY, 

acknowledgment  by  corporations  in 764 

form  for  articles  of  incorporation 687 

form  for  permit  for  foreign  corporations  in 764 


LETTER, 

offering  to  transfer  property  in  exchange  for  stock 836-837 

920 


INDEX    TO    FORMS    AND    PRECEDENTS. 

LOUISIANA, 

acknowledgment  by  corporations  in 766 

form  for  certificate  of  incorporation 687-689 

form  for  permit  for  foreign  corporations  in 764-766 

M. 
MAINE, 

acknowledgment  by  corporation  in 766 

Finance  &  Construction  Co.  charter  complete 690-698 

form  for  amendment  of  charters  in 807-809 

form  for  articles  of  association  and  certificate  of  organization      690-698 
form  of  by-laws  for      693-697 

MANAGING  AGENT, 

power  of  attorney  to  act  as 840-842 

MANAGING   DIRECTORS, 

appointment  of 868 

MARYLAND, 

acknowledgment  by  corporation  in 766-767 

form  for  certificate  of  incorporation 699 

form  for  permit  for  foreign  corporation  in 766,  747 

MASSACHUSETTS, 

acknowledgment  by  corporation  in 706 

form  for  articles  of  association  and  certificate  of  organization     699-704 

form  for  permit  for  foreign  corporation  in 767-769 

Investment  Co.,  charter  complete 699-704 

MEETINGS, 

minutes  of  first  directors' 818-822 

minutes  of  incorporators'  meeting 813-817 

proxy  for  incorporators'  meeting 816-817 

waiver  of  notice  of  first  directors'  meeting 822 

waiver  of  notice  of  incorporators'  meeting 836 

waiver  of  notice  of  stockholders'  meeting 836 

MICHIGAN, 

acknowledgment  by  corporation  in 770 

form  for  articles  of  association 704-706 

form  for  permit  for  foreign  corporations  in 769-770 

MINING  COMPANY, 

form  for  charter  of  (under  South  Dakota  laws) S72-873 

MINNESOTA, 

acknowledgment  by  corporation  in 771-772 

form  for  articles  of  incorporation      70(5-707 

form  for  permit  for  foreign  corporation 770-771 

MINUTES, 

of  first  meeting  of  directors 818  822 

of  incorporators'  meeting 813  817 

of  meetings  authorizing  bond  issue 849  850 

MISSISSIPPI, 

acknowledgment  by  corporation  in 772 

form  for  charter 707-70S 

form  for  permit  for  foreign  corporation  in 77'J,  7  17 

921 


INDEX   TO    FORMS   AND    PRECEDENTS. 

MISSOURI, 

acknowledgment  by  corporation  in 774 

form  for  agreement  of  incorporation 708-709 

form  for  permit  for  foreign  corporation  in 772,  747 

MONTANA, 

acknowledgment  by  corporation  in 774 

form  for  articles  of  incorporation 709-710 

form  for  permit  for  foreign  corporation  in 774-747 

MORTGAGE, 

directors  authorized  to  create 654 

securing  issue  of  bonds 851-S65 

N. 

NEBRASKA, 

acknowledgment  by  corporation  in 775 

form  for  articles  of  incorporation      710-712 

form  for  permit  for  foreign  corporation 774-775 

NEVADA, 

acknowledgment  by  corporation  in 776 

form  for  articles  of  incorporation 712 

form  for  permit  for  foreign  corporation 775 

NEW  HAMPSHIRE, 

acknowledgment  by  corporation  in 776 

form  for  articles  of  agreement 712-713 

form  for  permit  for  foreign  corporation 776 

NEW  JERSEY, 

acknowledgment  by  corporation  in .     775 

Auditing  Co.  charter  complete      869-871 

form  for  permit  for  foreign  corporations  in 776-775 

NEW   MEXICO, 

acknowledgment  by  corporation  in 779 

form  for  articles  of  incorporation      717-718 

form  for  permit  for  foreign  corporation  in 779,  747 

NEW  YORK, 

Brokerage  Co.  charter  complete 718-720 

NORTH   CAROLINA,      .    . 

acknowledgment  by  corporation  in 778-779 

form  for  certificate  of  incorporation 721 

form  for  permit  for  foreign  corporation  in 778 

NORTH  DAKOTA, 

acknowledgment  by  corporation  in 7S0 

form  for  articles  of  incorporation      721-722 

form  for  permit  for  foreign  corporation  in 779 

NOTICE, 

meeting  to  amend  charter 802-803 

waiver  of  notice  of  directors'  meeting 822 

of  incorporators'  meeting 836 

o. 

OATH, 

of  inspectors 813 

922 


IXDEX   TO    FORMS    AND    PRECEDENTS. 

OBJECT   CLAUSES.     (See  General  Object  Clauses) 653-65  \ 

(See  Specific  Object  Clauses) 613-652 

OFFICERS, 

removal  of 658 

OHIO, 

acknowledgment  by  corporation  in 783 

form  for  articles  of  incorporation      722   723 

form  for  permit  for  foreign  corporation  in 780-783 

OKLAHOMA, 

form  for  articles  of  incorporation      723-724 

OREGON, 

acknowledgment  by  corporation  in 786 

form  for  articles  of  incorporation      724 

form  for  permit  for  foreign  corporation  in 784-786 

ORGANIZATION,     .... 

subscription  agreement  before 835-836 

ORGANIZATION   MEETING, 

minutes  of 813-817 

ORGANIZING, 

the  corporation 878-883 


P. 

PATENT   RIGHTS 653 

PENNSYLVANIA, 

acknowledgment  by  corporation  in 787-7S9 

form  for  notice  of  application  for  charter,  etc 725-726 

form  for  permit  for  foreign  corporation  in 786-788 

PHILIPPINES, 

form  for  certificate  of  incorporation  in 726-728 

form  for  permit  for  foreign  corporation  in '88 

PORTO  RICO, 

form  for  certificate  of  incorporation  in '28 

form  for  permit  for  foreign  corporation  in 728 

POWER  OF  ATTORNEY, 788,747 

PREFERRED  STOCK  CLAUSE, 

long  form °o_# 

short  clause 661 

special  clause  for  cumulative  dividends 662 

PRINCIPAL  OFFICE, 

without  the  State 654 

PROMOTERS, 

safety  clause  for 606 

PROPERTY, 

directors  empowered  to  sell 653  654 

resolution  empowering  directors  to  purchase s,,t> 

for  incorporators'  meeting       816  oli 

and  waiver  of  notice  combined     83" 

PUBLICATION    OK    NOTICE, 

waiver  of 839 

923 


INDEX   TO    FORMS    AND    PRECEDENTS. 


R. 

REGISTRATION   OF   STOCK, 

form  for 842-843 

REGULATION   OF   BUSINESS, 

clauses  for.     (See  Business  Clauses.) 

REMOVAL, 

of  directors    .    . 658 

of  officers 658 

RESOLUTIONS, 

adopting  corporate  seal 818 

appointing  agent  in  charge  of  principal  office 815 

appointing  principal  place  of  business  in  domiciliary  State      .    .    .     815 

approving  stock  certificates 818 

authorizing  Issuance  of  capital  stock 815 

authorizing  issuance  of  capital  stock  in  exchange  for  property     819-820 

contraction  of  specific  debt 839 

decreasing  capital  stock      802 

designating  bank  as  depository  of  corporate  funds 840 

election  of  directors 814,  822 

land,  holding  of,  in  West  Virginia 802 

of  directors  taking  over  assets  of  a  copartnership      865-866 

of  stockholders  taking  over  assets  of  a  copartnership    ....     865-866 
payment  of  subscription  for  stock 820-821 

RHODE   ISLAND, 

acknowledgment  by  corporation  in 789 

form  for  articles  of  association 729 

form  for  permit  for  foreign  corporation  in 788-789 


s. 

SALE, 

bill  of ' 866 

SIGNATURE, 

corporate 867 

SOUTH   CAROLINA, 

acknowledgment  by  corporation  in 790 

form  for  amendment  to  charters  in 809-810 

form  for  declaration  and  petition  for  charter,  etc 729-730 

form  for  permit  for  foreign  corporation  in 789 

SOUTH  DAKOTA, 

acknowledgment  by  corporation  in 790 

form  for  amendment  to  charters  in 810 

form  for  articles  of  incorporation  (skeleton  form)      730-732 

form  for  permit  for  foreign  corporation  in       790 

"  mining  charter  complete     .    .    . 872—873 

SPECIAL  STOCKHOLDERS'    MEETING, 

waiver  of  notice,  etc 836 

SPECIFIC  OBJECT   CLAUSES.    (See  Special  Index,  pages  613-652.) 

924 


INDEX    TO    FORMS    AXD    PRECEDENTS. 

STOCK, 

clauses  in  charter  for  preferred      661-662 

holding  stock  in  other  corporations 653 

STOCKHOLDERS, 

organization  meeting  of,  minutes  of 813-817 

SUBSCRIPTION, 

agreement  before  organization S35-836 

transfer  of 817 

SUGGESTIONS, 

relative  to  the  preparation  of  charters,  etc 878-881 


T. 

TABLE   OF  ANNUAL  FRANCHISE   TAXES 884 

TABLE   OF   ORGANIZATION   TAXES 883 

TABLE   OF   TAXES  AND   FEES, 

imposed  upon  foreign  corporations 885-886 

TENNESSEE,     . 

acknowledgment  by  corporation  in 791 

form  for  charter  of  incorporation      732-734 

form  for  permit  for  foreign  corporation  in 790,  747 

TEXAS, 

acknowledgment  by  corporation  in 792 

form  for  charter 734 

form  for  permit  for  foreign  corporations      791-792 

TRANSFER  OF  SUBSCRIPTION      817 

TRUST  AND   INVESTMENT  CO. 

charter  of  (under  Delaware  laws)      672-674 

TRUST   DEED, 

securing  issue  of  bonds  (form  for) 851-865 

u. 

UNDERWRITERS'   AGREEMENT 843-847 

UNITED   STATES  STEEL   CORPORATION, 

by-laws  of      828-835 

charter   of 713-777 

UTAH, 

acknowledgment  by  corporation  in 79B 

form  for  articles  of  incorporation      735-737 

form  for  permit  for  foreign  corporations  in 793 


V. 

VERMONT, 

acknowledgment  by  corporation  in 795 

form  for  articles  of  association ~;{' 

form  for  permit  for  foreign  corporation  in 7(.U  795 

VIRGINIA, 

acknowledgment  by  corporation  in 794 

925 


INDEX  TO  FORMS  AND  PRECEDENTS. 

VIRGINIA  —  continued. 

form  for  certificate  of  incorporation,  etc 737-738 

form  for  permit  for  foreign  corporation  in 793-794 

VOTING  TRUST  AGREEMENT 847-848 


w. 

WAIVER, 

of  first  meeting  of  directors 822 

of  first  meeting  of  incorporators 836 

of  general  stockholders'  meeting 836 

of  organization  meeting 836 

of  special  stockholders'  meeting 836 

WASHINGTON, 

form  for  articles  of  incorporation      738-740 

form  for  permit  for  foreign  corporation  in 795-796 

WEST  VIRGINIA, 

acknowledgment  by  corporation  in 799 

coal  company,  charter  complete 871-878 

form  for  certificate  of  incorporation 740-741 

form  for  permit  for  foreign  corporation  in 796-799 

WISCONSIN, 

acknowledgment  by  corporation  in 800 

form  for  articles  of  organization 742-743 

form  for  permit  for  foreign  corporation  in 799-800 

WYOMING, 

acknowledgment  by  corporation  in 801 

form  for  certificate  of  incorporation 743-747 

form  for  permit  for  foreign  corporation  in 801,  744 


926 


LOS  ANGE^|F0BNU 


UC  SOUTHERN  RF 


AA    000  729  623 


